Creative defences

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Film or tv production can expose mammoth amounts of financial investment and collective creative input to losses through the theft of ideas and ownership. Li Jingjue, legal director at media multinational Huayi Brothers, examines the risks and challenges in film and television production under the amended copyright law

CREATIVE DEFENCES-1

CHINA’S FILM and television industry has been on a three-decade long growth spurt, with a seemingly endless string of new business models springing up one after another. It is the core duty of legal counsel to come up with legal solutions for production and promotion that live up to both commercial value and corporate expectation. Ever on the lookout for even the subtlest changes in the legal and regulatory environment, we must recalibrate corporate policies in a timely manner so as to continually provide excellent legal services.

The regulatory shifts that befell the entire entertainment industry in the past year, however, were anything but subtle. The third amendment to the Copyright Law was passed on 11 November 2020, and subsequently came into effect on 1 June 2021, attracting considerable attention from the public and legal officers alike. We found the situation very challenging indeed.

RIGHTS ALLOCATION

The allocation of rights and benefits is the first core issue to figure out in any film or television project. To ensure efficient and successful distribution of film and television products, and the subsequent allocation of benefits, we co-ordinate the rights attribution between producers, authors and performers, and clarify the ownership of copyright via thorough and precise contracts.

Li-jingjue,-legal-director,-media-multinational-huayi-brothers-S
Li Jingjue
Legal director
Huayi Brothers

The new Copyright Law introduces the concept of “audiovisual works” on top of the original clause, with article 17 stipulating that “the copyright of films and television series, which are audiovisual works, shall belong to the producer, while scriptwriters, cinematographers and other personnel are entitled to authorship and remuneration according to the contract. The copyright of audiovisual works other than films and television series shall be determined by the agreement entered into by parties concerned, or in the absence of which, go to the producer.”

Strict preparatory measures must be taken to ascertain the exact type of audiovisual works in a project, especially when it comes to the rights allocation of the above-mentioned “other audiovisual works”. We must perform complete and prudent contract reviews and be ready to deviate from the established framework designed for regular films and TV series.

AUDIOVISUAL WORKS

Any work that consists of a series of fixed related images, with or without accompanying sound, susceptible of being made visible and, where accompanied by sound, susceptible of being made audible
Source: Treaty on the International Registration of Audiovisual Works

Take for example a clip-edited music video as part of a movie’s marketing campaign. Based on the original Copyright Law (amended on 26 February 2010), it would fall under the category of a quasi-film (a product created in a similar manner as film) or a video recording, and adopt the rights allocation rules accordingly. The production company or the chief distributor would obtain the identity of, and rights from, the video or recording producer via a commission production contract, and engage or obtain license from the relevant musicians and any subjects of neighbouring rights.

Under the new Copyright Law, we must first determine what it is. The music video is obviously not a film or TV series, so we need to further work out the rights allocation among “parties concerned”, after obtaining the producer’s identity.

The extension of authorship is a common but tricky issue. If interpreted literally, “parties concerned” must include all subjects remotely involved in the production, but for obvious reasons this is not practical.

To avoid any disputes arising from ill-defined rights allocation, producers should strictly define the scope of authorship via pertinent contracts or rights statements, taking into account the nature and production cycle of a music video, and allocate the benefits in the manner agreed upon.

To sum up, the eventual rights allocation must, against all odds, be the recipe that pleases everyone. Laws and regulations, industry practice and the rules of audiovisual works must be observed, corporations must be satisfied with the room for revenue and input-output ratio, and the departments in charge of the actual allocation should not be overburdened in their often limited timeframes.

ADAPTATION

To avoid infringing on legitimate third-party rights, and any disputes over defects in licensing, we must first carefully examine the ownership of the source material that a film and television product is based on, inspired by or adapted from.

While established practice has long existed for common forms of adaptation, such as adapting a novel into a film or TV series, the introduction of “audiovisual works” in the new Copyright Law – compounded with the fact that producers of other audiovisual works don’t habitually engage legal workers to attend to rights allocation – has exponentially driven up the workload and difficulty in weaving and/or untangling the web of rights.

These legal complications will not douse the enthusiasm of film and television companies diving into the abundant and profitable pool of alternative source material, therefore the rights verification reports and allocation plans put forward by legal counsel will heavily affect the business decisions and budgets of the project.

Adapting short films into feature-length films has been the craze in recent years, whether it’s Andhadhun, an Indian film adapted from the French short film L’Accordeur, or Lights Out, an American film adapted from a short film of the same name. A similar trend is happening in China, as film and TV producers find precious inspiration in popular short videos on Douyin and Bilibili.

For short videos, we must identify authorship depending on the specific content and genre, in addition to ascertaining the producer, then figure out exactly who is entitled to what. When necessary, we may also renegotiate a contract with the copyright owner prior to obtaining the authorisation to adapt.

Other matters that may require preliminary works include: Authorisation/exemption of real people in news or documentary short videos; author of art works (in-house or outsourced) and the scope of authorisation (merchandising, distribution, etc.) of animated short videos, which may affect future marketing activities; and the increased likelihood of visual effects team members in fantasy short videos being entitled with authorship, given their larger contribution.

MELTING POT

Refers to lifting creative elements from several sources, such as character traits and story structure, and aggregating them in another work.

In addition, short videos are for the most part the creation of spontaneous and voluntary groups, which could mean there is no set form of organisation, or a stable structure, or a reliable list of participators. For instance, a team sets up a company for easy co-operation, but neglects to establish a definite legal relationship between the creatively involved natural persons and the firm.

This could result in a mismatch between the subject of co-operation, such as the company receiving the licence fee, and the subject of rights. Sometimes, the relationship between the creative and marketing teams is ambiguously defined, leading the marketing team, who participated heavily in the creative process, to also claim copyright and the corresponding commercial benefits.

Legal counsel, in view of these complex scenarios, must present tailor-made solutions for each individual short video.

GREY AREAS

Should we purchase license for a source material that our project is only “inspired by”? The answer is becoming more elusive with each passing day. From fan fiction commercialisation to script laundering to melting pot, these emerging trends pose brand new challenges for us when assessing infringement risks.

From the perspective of copyright, there are two types of fan fiction:

    • An adaptation in and of itself, it substantially inherits from the source material while applying stylistic changes. It goes without saying that license should be acquired for such an “original script”;
    • New storylines or sometimes new character traits are created on top of established characters, retaining their names, personalities and relationship. The author of There They Were, a popular novel that “borrows” characters created by Jin Yong, came under a lawsuit brought by the famed wuxia novelist. The court eventually found that the author, while not quite infringing the copyright, was nonetheless guilty of unfair competition. This serves as a cautionary tale for potential adaptation of fan fiction.

Script laundering and melting pot are considered grey areas, and infringement can be difficult to prove. Film and television companies, however, must remain cautious in adapting these works as they may be the harbinger of negative public opinion.

Ultimately, the market is behind this convergence of creative content. Material widely recognised and embraced by the market is typically known to be less risky and costly to produce.

The failsafe move to prevent any content infringement is to obtain licences for everything remotely considered source material, however, such wanton disregard of cost is unacceptable to film and television companies. On the contrary, they hope the legal department can avoid infringement with a minimum licensing budget.

SCRIPT LAUNDERING

The term indicates disguised plagiarism in literature. In film and television production, some scriptwriters resort to largely “copying and pasting” a storyline, changing only the period setting, name of characters and non-essential story elements. While this undoubtedly infringes on another’s copyright, proving it may be difficult.

Infringement assessment is particularly important in the film and television business, as accusations of this nature threaten the entire investment. Overcorrection, on the other hand, might restrict creativity, add to the licensing costs, slow down production or even cause a leak of trade secrets. Hence, for legal counsel in the film and television industry, it is our never-ending mission to locate the boundary between infringement and inspiration by applying judicial experience and reverse thinking.

THREE-STEP TEST

Reproduction of literary and artistic works can be permitted:
(1) In certain special cases, provided that
(2) It does not conflict with a normal exploitation of the work, and
(3) It does not unreasonably prejudice the legitimate interests of the author
Source: Berne Convention

Behind the concept of “substantial similarity” is the principle of “dichotomy of thought and expression”. Unfortunately, time and experience have only further muddled the line between thought and expression, never truly able to separate one from the other. Some judicial attempts at overcoming the ambiguity or arbitrariness in the matter, due to categorical thinking, only served to make things more rigid.

Some of the common methods for determining substantial similarity, such as the ordinary observer test, the extrinsic and intrinsic test, and the abstraction-filtration-comparison test, suffer from varying degrees of restriction and rigidity, leaving the final judgment wrapped in a shroud of mystery.

As we continue to study established methodology, pore over precedent cases and discern why they reached their own conclusions, we must also take those “methods” with a grain of salt. After all, exploring the boundary between objectivity and subjectivity is an adventure in itself. Academics, looking for a new angle, have also proposed the idea of “creative space inspection”, aiming to circumvent the traditional approach of detecting substantial similarity when tackling new and more complicated issues.

FAIR USE ON THE RISE

We have long harboured an inflexible understanding of fair use; if it is for commercial use, it cannot be fair use. The courts, for their part, have generally adopted a modest and restrained attitude towards fair use, further contributing to its infrequency.

In the years leading up to amending the Copyright Law, we saw some bold applications of fair use in court, some even going beyond its legal definition. The three-step test and four factors were applied to verify fair use in these valuable judicial explorations that broadened the horizon for legal counsel.

Early in the movie When Larry Met Mary, the protagonist co-played (dressing up as a fictional character) the Calabash brothers, well-known cartoon characters in China, which led to a dispute over whether the imitative costumes constituted copyright infringement. After measuring the costume used in both the finished film and marketing against the four factors, the court of first instance concluded that the cosplay was a case of fair use and no infringement was committed.

FOUR FACTORS

(1) Purpose and character of the use;
(2) Nature of copyrighted work;
(3) Amount and substantiality of the portion [of material] taken; and
(4) Effect of the use upon the potential market
Source: US Copyright Act

Legal departments have historically been wary of infringement risks when it comes to fine arts or photography. The usual approach is to obtain license, or blur, block or clip the relevant elements. In view of the above case, we quickly adjusted our assessment criteria in this regard.

While uneven in its judicial applications, the awakening of fair use is without doubt a step in the right direction in terms of balancing interests between the public and the copyright owner, as well as fulfilling the very purpose of copyright legislation. We look forward to the future of fair use in China.