The Law Offices of Mark Litwak and Associates has offered its clients high quality legal and business solutions for more than thirty years. We serve a global clientele in transactions involving financing, producing, and distributing motion picture, television, and new media projects. We represent numerous writers, directors, producers and production companies.
The firm has served as production counsel for numerous television and new media programs and series produced by independent filmmakers as well as productions made for major studios, networks, and content providers including Netflix, Warner Bros., 2oth Century Fox, Cartoon Network, HBO, IFC, Yahoo!, Disney/ABC, Hulu, Paramount, Seeso/NBC, Comedy Central, Verizon, YouTube, Facebook and MTV. See IMDB.com.
Mark is the author of six books, numerous articles and
has been cited as an authority by many scholarly publications. He has been an adjunct professor at U.S.C. law school since 2013 teaching entertainment law. He previously taught at U.C.L.A. for more than twenty years. He also has worked as an expert witness and serves as an IFTA arbitrator. The firm has won millions of dollars in damages for filmmakers who have been defrauded by distributors.
Effective September 1, 2020 our new address is:
Law Offices of Mark Litwak & Associates
201 Santa Monica Blvd., Suite 300
Santa Monica, CA 90401
Phone: (310) 859-9595
E Mail: Law3@marklitwak.com
Mark Litwak has been named to the Southern California Super Lawyers list as one of the top attorneys in Southern California for 2021. No more than 5 percent of the lawyers in the state are selected to be designated Super Lawyers. This is the 12th time Mark has been honored with this award which is based on anonymous peer evaluations by other lawyers.
Super Lawyers, a Thomson Reuters business, is a rating service of outstanding lawyers from more than 70
practice areas who have attained a high degree of peer
recognition and professional achievement. The annual selections are made using a rigorous multi‐phased process that includes a statewide survey of lawyers, an independent research evaluation of candidates, and peer reviews by practice area.
The Super Lawyers lists are published nationwide in Super Lawyers magazines and in leading city and regional magazines across the country. Super Lawyers magazines also feature editorial profiles of attorneys who embody excellence in the practice of law. For more information about Super Lawyers, go to superlawyers.com or click Here.
Mark has for more than a decade has received an AV preeminent peer review rating from Martindale-Hubbell. This is the highest rating given a lawyer and is indicator of a lawyer's high ethical standards and professional ability, generated from evaluations of lawyers by other members of the bar and the judiciary in the United States and Canada.
Podcast: FILM MAKING PITFALLS IN DEAL-MAKING AND DISTRIBUTION
Listen to Cinema of Change Podcast interview of Mark Litwak
Mark Litwak recently represented Claimant Aletheia Films (Robert Rippberger) in an arbitration against Respondent Raging Nations Films whose principal is Dale Resteghini. The parties had agreed to collaborate in the production of a pilot called “Cracka.” Claimant asserted that Raging Nations had deviated from the production plan, refused to reimburse Claimant its expenses, failed to provide a screen credit, denied Claimant its equity interest and tried to remove it from the project.
After four days of hearings, Claimant was determined to be the prevailing party. Respondent counter claim was dismissed.
The arbitrator found: “Raging Nation tried to cut Aletheia Films out of the Cracka Project after production and tried to keep Aletheia from receiving any benefits under the signed MOU contract.” The arbitrator restored all of Claimant’s rights under the agreement including its copyright interest and its profit participation.
Claimant was awarded compensatory damages of $16,742, costs of $11,257.91, and reimbursement of attorney fees of $75,579.35 for a total award of $103,579.26.
Sydon GMBH: We are pleased to have won a $43,811.94 award for our producer client Sydon GMBH against Los Angles based sales agent Spotlight Pictures, Inc. Sydon had entered into a distribution agreement with Spotlight for distribution of its feature film Falsely Accused. Mark Litwak represented Sydon. The arbitrator found that Spotlight failed to communicate with Sydon after the notice of default and once the third quarter 2016 report was issued showing a payment due, Spotlight represented that the payment would be paid but failed to do so. The award included interest and reimbursement of Claimant attorney fees.
Employing Minors and Ensuring their Contracts are Enforceable
by Diana Budninskiy, Esq.
In California, a contract with a minor (anyone under the age of 18) can generally be disaffirmed by the minor. A disaffirmed contract is not enforceable. This law is meant to prevent adults from taking advantage of minors and is based on the belief that minors are easily exploitable because they may not fully understand a contract they have signed. Needless to say, a contract invalidated by a child actor could jeopardize distribution of the motion picture in which the minor appears. Having to edit out the scenes of Macaulay Culkin from Home Alone would leave the producer with a handful of scenes and an incoherent plot that no one would pay to see. All of the producer’s rights, including ownership of the actor’s performance, the right to use his or her name and likeness to promote the picture, and options for future services, would be lost. click to read entire article
CREATIVE ACCOUNTING REVISITED
Several recent cases have provided insight into creative accounting disputes and the rights of profit participants to contest inaccurate reporting. One case concerns the Columbo television series, a show in the 1970s created by William Link and Richard Levinson. The program starred Peter Falk playing a disheveled bumbling detective who outwits the bad guys who always underestimate him. The series began in 1971 and was a hit both in the United States and abroad having been broadcast in forty-four countries. The heirs of the creators say it took 45 years for them to receive their first accounting report for the series. The statement was issued in November 2016 along with a check for $2.3 million. In 2017, they sued Universal claiming they were due much more.
Profit participants often complain that distributors engage in creative accounting to deny them their rightful share of profits. One of the ways that distributors may seek to avoid payouts is by including time limits that require profit participant to audit and contest a statement promptly or waive their right to contest it. If the participants do not audit and make a claim, they may be barred from contesting the accounting later. Essentially the studio is imposing a shortened statute of limitations on the participant. It is common for distribution contracts to require that participants must contest a statement within two years of it being issued or waive their right forever to challenge it. This imposes a dilemma on participants because audits can be costly, and the participant does not really know if any additional revenue will be recovered with an audit. If a participant prematurely pays for an audit that reveals no shortcoming in monies owed the participant, the participant has to bear the cost of the audit. An audit can cost thirty thousand dollars or more for a major studio film. So even if the audit exposes some irregular accounting that generates a modest return, it may not be worth the cost.
In the Colombo lawsuit, the parties’ agreement provided that the studio would provide statements twice a year except that there was no obligation to provide statements if no payments were due. By not supplying statements for 45 years, the studio represented that no profits were due. When a statement was finally issued, the plaintiffs’ attorney promptly objected and sued.
The plaintiffs alleged that they had not discovered facts indicating that they were being shortchanged until they received that first statement. Last March, a jury decided that the plaintiffs did not unduly delay their lawsuit and also found that Universal had improperly taken certain distribution fees it was not entitled to.
The court then referred the matter to referees to analyze income and expenses and determine what was due. Last July, the referees reported that the plaintiffs were shortchanged some $36 million and added another $41 million in interest for the delay in payment. The amount wasn't as much as the $100 million plus that the plaintiffs claimed they were due, but it was a significant sum nevertheless.
In another case, Wind Dancer Production Group sued Disney in 2013 for unpaid profits derived from the Tim Allen series Home Improvement.[i] The series has reportedly generated $1.5 billion for Disney.[ii] The profit participation agreement provided that, “Each statement shall be deemed conclusively correct and binding on Participant as to the transactions reflected therein for the first time on the expiration of a period . . . of 24 months after the date sent.” Since Home Improvement’s debut in 1991, the producers exercised their right to audit Disney’s books six times.
At trial, the judge dismissed the case because of an "incontestability" clause. A California appeals court, however, overruled that decision and decided that the trial court should have considered whether Disney should be prevented from asserting incontestability because it had a practice of delaying audits and only allowing one audit at a time. Appellate justice Laurie Zelon wrote in her opinion that:
“The law is clear, however, that notwithstanding a provision in a written contract that expressly precludes oral modification, the parties may, by their words or conduct, waive the enforcement of a contract provision if the evidence shows that was their intent. Accordingly, the no-oral-modification clause in the profit participation agreement did not preclude Disney from waiving other provisions in the agreement that were made for its benefit, including the time limitations in the incontestability clause. It also did not preclude Disney from orally agreeing to toll the limitations period for the Audit 4 and 5 statements that are the subject of this action while those audits were pending."
The Wild Dancer decision illustrates how a party's conduct can result in a waiver, despite the existence of a no-waiver provision in the parties’ agreement.[iii] In this case, the relevant issue was whether a contractual limitations period was waived by either: (1) oral and unsigned tolling agreements; or (2) Disney’s practice of permitting the exercise of rights that should have been "time-barred." The contract contained a no-oral-modification provision and an "anti-waiver provision" whereby "a failure to enforce a contract term in one instance shall not be deemed a waiver of that term in another instance."
Despite provisions precluding oral modification and waiver, the Wild Dancer court reiterated that "the parties may, by their words or conduct, waive the enforcement of a contract provision if the evidence shows that was their intent."
The plaintiffs were seeking more than 40 million in damages plus interest. This past January, the suit was settled by the parties for an undisclosed sum.[iv]
[i] Wind Dancer Prod. Grp. v. Walt Disney Pictures, 10 Cal. App. 5th 56 (Cal. Ct. App. 2017).
[ii] Eriq Gardner, ‘Home Improvement’ Profits Lawsuit Against Disney Revived by Appeals Court, The Hollywood Reporter (Mar. 22, 2017, 2:18 PM), available at https://www.hollywoodreporter.com/thr-esq/home-improvement-profit-participation-lawsuit-disney-revived-by-appeals-court-988108
[iii] Wild Dancer Prod. Grp., supra, 10 Cal.App.5th at 80-83.
[iv] Ryan Faughnder, Disney settles lawsuit over ‘Home Improvement’ profits, Los Angeles Times (July 24, 2019, 12:50 PM), available at https://www.latimes.com/entertainment-arts/business/story/2019-07-24/disney-settles-lawsuit-over-home-improvement-profits
Areas of Practice
□ Entertainment Law
□ Contract Law
□ Copyright and Clearances
□ Trademark and Unfair Competition
□ Business Transactions and Formation
□ Motion Picture Finance and Distribution
□ Television and Film Production
□ Book and New Media publishing
□ Defamation, Rights of Privacy and Publicity
□ Intellectual Property acquisition and licensing
□ Court confirmation of contracts with minors
Expert Witness Services
Mark Litwak has served as an expert witness for both
plaintiffs and defendants in state and federal courts, as well as in arbitration. He is an authority on customs and
practices in the movie industry, entertainment law, deal
making, economic damages, chain of title, and the
financing and distribution of films.
The Babysitters Club: Congratulations to our client Walden Media whose new Netflix series has been earning rave reviews from the New York Times and other media.
Texas Supreme Court reverses lower courts and agrees with expert opinion offered by Mark Litwak who was retained by the Attorney General of Texas to testify on behalf of the Texas Comptroller in its suit against AMC theaters. Read Texas v. AMC.
Mark quoted in IndieWire about production after Corona virus.
Mark interviewed on Art of Film Funding podcast about AB 5 which is the new law regarding classification of employees and independent contractors.
Mark quoted in IndieWire about Clint Eastwood's new movie about Richard Jewell.
Mark quoted in IndieWire about Apple's acquisition of The Banker after allegations of sexual abuse.
Mark quoted in The Economist about ownership of ideas and plots.
Mark quoted in the New York Post in article about the Rev. Al Sharpton and a deal he made with his non-profit for his life story rights. You can read the article here.
We have enhanced our store and now if you purchase contract templates from the books we sell, you can download them immediately. You no longer have to wait for a CD-R to arrive by mail. The contracts are in Word format and fully editable. Store
The 4th Edition is
The Fourth Edition updates the existing text and adds more than 100 pages of new material covering changes occurring in the movie industry such as the growth of new media outlets like Netflix and You Tube. Purchase your copy today!
Why You Need A Production Attorney
Many independent low budget filmmakers try to conserve their funds by not retaining a production attorney to handle their contracts and releases. They often rely on forms from prior productions and assume that these agreements will suffice to secure all the rights they need. Sometimes they are lucky, and the forms are sufficient. Most of the time, however, the forms are not suited for the circumstances and are deficient. Actor agreements, for example, vary significantly. There are different templates for union and non-union deals. There are diverse terms for principal players, day players and extras. Moreover, releases may be needed for non-actors in the background or interview subjects for a documentary. If a producer does not use the proper agreement, she may belatedly discover that they have not adequately secured rights to their film in a manner that is acceptable to distributors.
Filmmakers may not realize that today virtually all distributors in the United States require Errors and Omissions (E & O) Insurance before they will release a motion picture. A producer can create a fabulous award-winning movie and find themselves pursued by multiple distributors bidding to acquire their films. But if the producer cannot secure E & O insurance, no deal will be made. Almost all distributors require this insurance. This includes not only distributors that release films in theaters, but also smaller home video companies and aggregators who license motion pictures to digital platforms like Amazon or iTunes.
When filmmakers apply for E & O Insurance, they will see a line on the application asking for the name of their production attorney and his/her phone number. That is because insurance companies want your premium dollar but don’t want to take on any unnecessary risk. They want to make sure your contracts have fully secured all necessary rights. They will often call the production attorney to ensure that she understands the insurers clearance requirements and has made sure that the production has complied.
E & O Insurance, sometimes referred to as Filmmaker Malpractice Insurance, is a type of insurance that protects a filmmaker (and distributors) if the filmmaker negligently fails to secure rights to a film. It protects against copyright and trademark suits for infringement, as well as action claiming defamation, invasion of privacy, violation of rights of publicity and other violations of intellectual property. If a filmmaker has violated a third-party’s right, such as using music that has not been properly licensed, not only will the filmmaker be liable but everyone in the chain of distribution may be liable as well. That means sales agents, distributors, exhibitors and retailers can each be sued even if they had no role in producing the movie. A theater owner, for example, does not have a good defense by blaming the filmmaker for his failure to license music on the soundtrack. The filmmaker may be the individual who dropped the ball, but everyone who has duplicated or exhibited the film is also liable. Statutory damages for copyright infringement can be as much as $150,000 for a single infringement of one work.
The distribution contract will usually provide that if a filmmaker fails to fully secure all rights, and the distributor is sued, that the filmmaker must indemnify (reimburse) the distributor its legal fees and any award rendered against it. But distributors understand that most independent filmmakers have limited resources, and after a film has been completed, they are often broke. The indemnity may not be worth much practically speaking. That is why distributors want the filmmaker to add them as additional insureds under their E & O insurance policy to ensure that the insurance company assumes any liability and pays attorney fees to defend against a suit.
The Law Offices of Mark Litwak & Associates provides affordable legal services for many independent low budget filmmakers. Contact us if you would like to discuss your production legal needs.
What’s in the Public Domain
Many people are confused about which works are in the public domain and which are not. Materials protected by copyright, such as books, articles, photos, videos and artwork, enter the public domain when their copyright term expires. At that time, material previously protected is free to use without seeking any permission.
It can be difficult to determine what is in the public domain. Just because material is posted on the internet, for example, does not place it in the public domain. Likewise, material that does not bear a copyright notice is not necessarily in the public domain. Furthermore, every country has its own copyright laws, and those laws vary, so material that is in the public domain in one country is not necessarily in the public domain in other countries. This has become an increasingly important concern as companies like Netflix often desire worldwide rights to enable them to distribute content across the globe.
Moreover, what is in the public domain has changed over the years as the U.S. Congress has repeatedly modified copyright law, usually increasing the term of protection and reducing what goes into the public domain. The major studios lobbied to extend copyright protection to protect their classic films even though many of them are based on fairy and folk tales, Shakespeare’s plays and other public domain materials like the Bible that were freely available to them to make into movies without having to pay a dime for any underlying rights.
Under the 1909 Copyright Act, published works received a copyright term of 28 years, and that could be extended for another 28 years if the owner filed a timely renewal. Many copyright holders, however, forgot to file renewals and consequently copyright usually lasted no more than an average of thirty-two years[i]before the law was changed as of 1978 when the United States moved to a single term of copyright.[ii] Compare that with the term of copyright protection since 1978 which lasts for the lifetime of the author plus seventy years for individuals. Consequently, a 20-year-old author who lives to age 90, would have 140 years of protection. If a work is written by multiple authors and published today, the copyright will not expire until 70 years after the last surviving author dies. For an anonymous work, a pseudonymous work, or a work made for hire, the copyright endures for a term of 95 years from the year of its first publication or a term of 120 years from the year of its creation, whichever expires first.
On top of the already complex system of rules for determining how long copyright lasts, Congress decided as of 1996 to retroactively restore copyright protection to some foreign works that had fallen into the public domain under U.S. law. Under the provisions of the Uruguay Round Agreements Act (URAA), certain foreign works whose U.S. copyright protection had been lost because of the failure to comply with U.S. formalities like filing for renewal, were restored. The restoration is automatic, and the duration of the restored term is based on the term of protection the work would have otherwise had.
While determining what is in the public domain often requires considerable research and a deep understanding of copyright law, there are some general guidelines one can follow. As a general rule, as of 2019, United States copyright has expired for all works published in the United States before 1924. In other words, if the work was published in the United States in 1923 or earlier, you are allowed to use it in the United States without permission. As the years go by, more work will fall into the public domain. So next year, works published before 1925 will expire.
In the United States, works created by a federal government employee within the scope of their duties are in the public domain. Consequently, many government publications and films are available for use for the cost of duplication. There are numerous films made for the Army, EPA and other government agencies that are freely available. Perhaps one of the best bargains are the amazing images from JPL and NASA. However, not everything owned by the federal government is public domain. Works created by third parties and assigned to the United States Government can be protected under copyright. And the federal government is legally entitled to claim copyright for use for its works outside the United States depending on the laws of each foreign nation.[iii]
The National Archives has an extensive library of public-domain photos and footage. However, not everything in their collection is in the public domain. It is common practice for image libraries like Getty Images to provide access to public domain content and charge for it.
The copyright office provides a brochure about the duration of copyright.
Cornell University publishes a chart that is useful in determining what material is in the public domain in the United States.
[i] Under the 1909 Copyright Act, published works received a maximum of two twenty-eight-year copyright terms, with the second term beginning only if the work was timely renewed. Since many works were never renewed, the average term for all published works was only thirty-two years. Lessig, Free Culture, 24 (2004).
[ii] Likewise, works registered or first published in the United States published between 1924 and 1977 without a copyright notice are in the public domain.
[iii] Copyright and the Public Domain § 2.04