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How to make a movie: legal aspects

Published in: Intellectual Property
by Arlo Canella
Home > How to make a movie: legal aspects

This article explores the process of film production, highlighting the complex interplay between cinematography, intellectual property, and contracts.

 

Cinematography and intellectual property

Cinematography, defined as the seventh art by critic Ricciotto Canudo in his 1921 manifesto, is closely linked to intellectual property.

The advent of cinematographic film, invented by George Eastman in 1885, marked the beginning of a new era in visual storytelling. The short film “Man Walking Around a Corner“, created in 1887 by Louis Aimé Augustin Le Prince, holds great historical significance. Despite lasting only three seconds, it is considered the first filmic production. However, it was not until the Lumière brothers introduced their cinématographe at the Salon Indien du Grand Café in Paris on December 28, 1895, that cinema became the exciting, collective experience we know today.

The first issues of plagiarism arose with the success of “A Trip to the Moon” (1902) by Georges Méliès. A pioneer in special effects, Méliès demonstrated the magic cinema could offer while also exposing the complexities of unauthorized copies, especially in international distribution.

This article aims to provide insights into the cinematic production process, from the concept stage to screenplay development and distribution.

We will examine the risks and strategies for protecting film works in light of copyright laws and, more importantly, the legal challenges to consider at each stage of film production—not only as a creative activity but also as a commercial and profit-generating enterprise.

The “literary phase” and initial legal considerations

When discussing intellectual property in cinema, everything originates from an idea. In the context of film production, this idea takes the form of a story concept or telegram—a term used in the industry to define a brief summary that captures the essence of the film. 

For example, for E.T. the Extra-Terrestrial, the story concept might be:
A lonely boy helps a lost alien return home, defying the government and forming a deep bond that changes his life.

Ideas can stem from reinterpretations of myths, archetypes, or real-life events. Sometimes, filmmakers choose to create prequels or sequels to existing stories or explore “what if” scenarios. According to screenwriting manuals, hypothetical realities open up new critical perspectives and allow for the intellectual exploration of unexpected connections between seemingly unrelated elements.

Once the story concept is formulated, the first legal considerations arise:

  • Acquisition of rights: It is essential to verify and, if necessary, acquire the intellectual property rights of any pre-existing material used in the screenplay. This prevents copyright infringements and potential disputes over plagiarism or unauthorized exploitation of third-party works.
  • Contractual agreements with authors: Screenwriting rights must be clearly regulated through contracts with the writers involved. These agreements specify details such as confidentiality during development, financial terms, methods of exploitation, possible modifications, adaptation rights for different media, and more.
  • Legal registration and protection: Once completed, the screenplay must be protected under applicable laws and, if necessary, officially registered for precautionary purposes with copyright protection agencies (such as SIAE in Italy) to facilitate future rights management, including licensing.
  • Public order and moral considerations: Depending on the film’s themes, each story must be assessed for its societal impact, taking into account legal responsibilities and constraints that vary from country to country in production and distribution.

Once the story concept is defined and the legal foundation of the production is secured, the film’s plot is developed during the so-called “literary phase”, which includes several key elements:

  1. The subject (or fabula) outlines the complete sequence of events in chronological order, representing the entire story.
  2. The step outline organizes the scenes and key events that will guide the plot; this tool helps visualize the story’s flow and is essential for early evaluations of production timing and logistics.
  3. The treatment is a detailed narrative without dialogues, including in-depth descriptions of scenes, main actions, and character profiles.
  4. The screenplay is the final document incorporating all dialogues, directorial notes, and essential technical annotations for actors and the production team.

The literary phase is crucial not only for defining the film’s artistic aspect but also for its financial implications.

At this stage, a production budget is typically estimated based on the expected scene length, set requirements, costumes, special effects, and crew costs. This budget is fundamental for financial planning and attracting investors through a letter of intent, leading to the formalization of the actual film production contract.

Film production and related contracts

The film production contract forms the backbone of the entire film project, establishing the rights and obligations of all parties involved in production. Through a series of clauses, this contract governs every aspect of the filmmaking process, from pre-production to distribution.

Before drafting the final production contract, it is common practice to draft a letter of intent (Memorandum of Understanding – MoU). While not legally binding, this preliminary agreement outlines the initial intentions of investors, including the producer, and structures the step-by-step negotiation process for the production contract and related agreements.

At this stage, two essential attachments are typically included the detailed budget and the production schedule. These documents are critical for financial and organizational management, ensuring that schedules and budgets remain under control.

Additionally, the director’s contract is often discussed as early as the letter of intent stage (or even earlier, as directors may be involved in the literary phase). This contract defines the director’s collaboration terms, responsibilities, production timeline, and frequently includes negotiations on final cut rights.

Casting is another critical factor in a film’s success, as the actors’ value often attracts audiences. Actor contracts must define:

  • Compensation
  • Image rights
  • Duration of participation
  • Possible exclusivity during distribution.

Furthermore, local employment laws must be complied with for all crew members.

At the heart of the production contract is the exploitation right of the film. While moral rights primarily belong to the director (as the creative head) and the authors involved, economic exploitation rights belong solely to the producer (or multiple producers, if applicable).

Anche il criterio di riparto dei proventi della distribuzione, di prassi, viene regolato nel contratto di produzione insieme alla definizione dei canali previsti per la distribuzione stessa.

The revenue-sharing model for distribution is also regulated in the production contract, along with the definition of distribution channels.

In Italy, the General Directorate for Cinema and Audiovisual plays a central role in the film industry. This government body not only regulates and promotes the audiovisual sector but also provides financial support through incentives and grants for Italian or co-produced films. It ensures compliance with national regulations and promotes the distribution of Italian films both domestically and internationally.

Lights, camera, action!

The legendary “clapperboard” marks the beginning of filming and represents an important moment where collaboration between the director, actors, cinematographer, and the rest of the crew is essential. Precision in choosing camera angles, appropriate lighting, and the correct positioning of actors is indispensable for the film’s success. During this phase, the use of the clapperboard not only signals the start of each scene but also helps maintain the chronological order of the footage, facilitating the editing process.

A common practice during filming is product placement, the strategic inclusion of real commercial products within the film. This advertising technique must comply with transparency regulations but also provides additional revenue for production. One of the most successful examples of product placement is found in Steven Spielberg’s E.T. the Extra-Terrestrial, where the use of Reese’s Pieces candies led to a sales increase of over 65%.

Managing on-set logistics is also crucial, ensuring compliance with safety regulations and scheduled production timelines. Delays can lead to increased costs and potential legal disputes with investors or suppliers, particularly if contractual terms are not adhered to. In this regard, the production manager plays a key role in coordinating activities and ensuring that each day of filming is productive.

The movie Titanic is renowned for the immense scale of its production operations. James Cameron built a nearly life-sized replica of the Titanic in the port of Rosarito, Mexico. The original budget for Titanic was approximately $200 million, but the total production cost ultimately reached around $220 million, making it the most expensive film ever made at the time. A substantial portion of these expenses was allocated to the creation of special and visual effects, including the use of cutting-edge underwater filming technology, which Cameron personally insisted on directing.

Furthermore, monitoring intellectual property rights is essential. The unauthorized use of copyrighted materials, such as musical compositions or visual artworks, must be avoided or properly regulated through licensing agreements to prevent legal action for copyright infringement.

Post-production and distribution

Post-production transforms raw footage into a finished product. This phase includes editing, where the director and their closest collaborators determine the narrative flow and key transitions, as well as the addition of special effects and sound enhancements that enrich the film’s visual and auditory experience.

Final editing and color correction are decisive steps that influence the visual impact and overall atmosphere of the film.

Negotiating distribution rights is always a critical process and is typically predetermined. The choice between various distribution channels—such as cinema releases, online streaming platforms, and television networks—must be carefully aligned with marketing strategies aimed at attracting audiences. However, if a film performs poorly at the box office, its theatrical run may be shortened in favor of alternative distribution and exploitation channels. As mentioned earlier, distribution is a fundamental aspect that is planned alongside production, though significant adjustments may occur once the film is completed. Typically, authors and performers receive a percentage-based compensation (royalties) depending on the film’s financial performance and the terms agreed upon in their contracts.

Additionally, compliance with censorship laws and local age classification regulations is crucial during the distribution phase. A Clockwork Orange by Stanley Kubrick, for example, faced numerous legal controversies and censorship issues due to its violent scenes and disturbing themes. In the UK, the film was withdrawn from theatrical release for several years at Kubrick’s own request, following threats and concerns for his personal safety.

Moreover, film promotion must be carefully managed and is often accompanied by merchandising operations, which can be highly profitable for producers. Special attention must also be given to digital rights management and anti-piracy measures, which are essential for protecting the financial and creative interests of the film and all parties involved in its production.

© Canella Camaiora Sta. All rights reserved.
Publication date: 26 April 2024
Last update: 1 May 2024

Textual reproduction of the article is permitted, even for commercial purposes, within the limit of 15% of its entirety, provided that the source is clearly indicated. In the case of online reproduction, a link to the original article must be included. Unauthorised reproduction or paraphrasing without indication of source will be prosecuted.
Avv. Arlo Cannela

Avvocato Arlo Canella

Managing Partner of the Canella Camaiora Law Firm, member of the Milan Bar Association, passionate about Branding, Communication and Design.
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