Madhouse Lawyer: Two Seasoned Attorneys’ Semi-Scary Overview of Indie Genre Production’s Necessary Legal Evils

While many indie moviemakers believe that they can find “anything on the Internet,” including cut-and-paste agreements, every situation is unique and demands that you have a trusted legal ally—someone who can assure that all your bases are covered.

With or without an attorney on board, however, it’s extremely useful if a moviemaker has an awareness of the many legal aspects of the production and distribution of a film. What follows is an overview of your impending legal journey as a indie genre moviemaker. 

Rights acquisition is essential for any moviemaker going the route of homage—using non-original source material (short stories, comic books, graphic novels, books, news articles, songs, plays, YouTube videos, podcasts, etc.) to tell their story. While the old saw “nobody can own history”—or historical figures—remains true, one must be aware of “right of publicity” suits.

Be aware that any “Story By” credit should be covered by a document between the moviemaker and the owner of the “story.”

Sam Goldwyn once said, “If you have one partner, that’s one partner too many!” If you choose not to follow Goldwyn’s advice, have a documented collaboration agreement stating which of the writing partners owns what, who will control the product of the collaboration, and what will happen if the collaboration comes to an end. Address these points at the beginning—not after a dispute arises.

Copyright Registration is preferred to WGA registration, since if you want to sue someone for infringement, the registration is your ticket into the court house. Also, if you’re working with any of the Guilds, they all require the registration certificate as part of their contract process.

Chain of Title is essential for distributing your genre indie. The “chain” consists of all documentation from source material to screenplay to finished film. It includes provided permission(s) to use/utilize the property of another, copyright registrations and contracts with writers, directors and producers. 

Necessary Errors and Omissions Insurance usually covers omissions in the chain of title, theft of idea claims, and defamation claims. It’s possible to get an E&O Policy if you are claiming “Fair Use” of certain materials. If that’s the case, you’ll need an Opinion Letter from an attorney. (Note: “Fair Use” is hotly litigated and often misunderstood by judges and attorneys. If you’re considering using “fair use” items in your film, consult an attorney before you lock picture, otherwise it may turn into an epic horror show of its own.)

Your budget won’t be accurate without a schedule based on the final script. When drafting your budget, account for tax incentives and credits. Some states have transferable credits, others have rebates or grants, and some have neither. Research how to monetize what different states offer. Indie horror moviemakers can strike gold, for instance, if they capitalize on an eerie, small town location in a state offering greater incentives or credits for crews working outside of their major metropolises, such as New York, where productions with budgets over $500K can receive an additional 10 percent credit on qualified labor expenses incurred in 50-plus counties.

If you’re counting on tax incentives, research the requirements of the state where you’re shooting before forming any production company as well, be it a LLC, S-Corp, or or legal entity. 

When working in genre cinema, your authorization to use likeness (or lack thereof) can make or break the visuals upon which your film rests.

When negotiating with the team behind Back to the Future Part II, for instance, Crispin Glover made hiring demands that the producers believed to be untenable. The crew ultimately opted to use a life-like facial mask from the previous film on a new actor in the sequel. Glover sued, and a large settlement was purportedly reached for “unfair use of Mr. Glover’s likeness.”

Although most moviemakers assume that what Frankenstein’s Monster looks like on screen is universally accepted, they’re most likely thinking of make-up artist Jack Pierce’s iconic designs for Boris Karloff in Universal’s 1931 Frankenstein. Be advised that that look is not available for use unless licensed. Then, decide whether your budget is better off absorbing the costs of licensing fees, or if you’re in better financial shape allocating some additional resources to produce a new monster make-up style of your own.

Some stories of how horror films were funded by family and friends—from Sam Raimi’s The Evil Dead, which was partially funded by neighbors and relatives of cast and crew members, to Eli Roth’s Cabin Fever, which was partially funded by the director’s grandparents and aunt—are now the stuff of legend. If you’re seeking money from family and friends for your feature, you’re seeking equity investors. This means that you’ll be subject to both Federal and State securities laws, and the SEC. While there are many exemptions and exceptions to these laws, the worst choice you can make is to ignore them.

Once you’ve begun your shoot, your script breakdown should list talent (including extras, child actors, and animals), location(s), and props and FX, which may range from make-up to blood, fog, smoke, rain, wind, weapons, vehicles, costumes, and pyrotechnics.

To cover you when handling these aspects of the production, there are many types of production insurance. At the very least, you’ll need a Commercial General Liability Policy and Worker’s Comp. Other types of production insurance will cover cast and equipment. There’s also insurance that covers faulty equipment (i.e. the kind that pays for you to reshoot scenes because your camera or sound equipment didn’t work properly); weather insurance for dark, stormy nights that force you off set (the kind not in your script); and “key man” insurance (i.e. the kind that covers a director, DP, etc. who exits your project).

Also important to note: If your genre film incorporates squibs, pyrotechnics, and/or stunts, all of these specialized elements must be disclosed to your insurance company. Their inclusion may result in higher premiums, but if you’re not truthful about using them and injuries arise as a result of them, the insurance company may assert fraud and refuse to cover your claim. 

Of the many post-production agreements to prepare, one of the most important is an agreement with whoever is editing your film. Never pay all up front. Payments for services should be over time and can be tied to performance milestones (i.e. assembly, first cut, fine cut, locked picture). When your film lands a distribution deal, your distributor should inform you and your producer(s) of any specific territorially-based clearance requirements/payments.

Do your due diligence before entering into any agreement with a distributor, sales rep, or agent. Ask for references and call them.  If they don’t give you references, look for the films they claim to have handled, call the producers, and ask them if they were happy with their working experience. Search online for complaints. Search court records to see if they’ve been sued. (Really, do this!)

Make sure that whoever does your key art and your trailer assigns that copyright to you as well. Due to not following copyright law in place at the time, the late George Romero made relatively limited money from his most famous and influential creation, Night of the Living Dead, and lost control when the film and title entered the realm of public domain. 

Ready to submit your horror indie to festivals? Have a strategy. Just because you’re invited to a festival doesn’t mean you should say yes. Some festivals will offer a prime spot for a premiere, while others may be better suited for taking your project that’s already made its way around the circuit to a pitch session where genre distributors will be present. And if you’re counting on selling your genre film at a festival, welcome! You’ve just entered the Bates Motel. (Arm yourself with our “30 Bloody Best Genre Fests” list.) 

This look at the legal aspects of an indie genre film’s life cycle is only the tip of the iceberg. By addressing these questions and weighing key decisions, you can begin your own balanced business considerations. Ignore them at your own peril… doing so may haunt you for an eternity. MM

Marlon Schulman, Esq. is a New York attorney who conceived of and founded Horror Equity Fund, Inc. and Bandai’s AnimeVillage. An executive producer, producer, and proud dad of a Vassar College freshman, he enjoys tap dancing (and not just for business). Daniel J. Coplan, Esq. is an entertainment attorney and award-winning writer, director, producer, and actor (sometimes in that order). Authors’ Note: This is intended as an educational article and is not a substitute for, nor should it be considered, as “legal advice.” Please consult an attorney in all cases. 

This article appears in MovieMaker’s 2019 Guide to Making Horror Movies, featured inside our Fall 2018 issue, on newsstands November 6, 2018. Featured image courtesy of Shutterstock.

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