ARTIFICIAL INTELLIGENCE HEADLINE FROM THE “IF YOU CAN’T BEAT ‘EM, JOIN ‘EM” DEPARTMENT

Earlier this week, artificial intelligence video synthesis firm Runway AI, Inc. and Lionsgate Entertainment Corporation announced a partnership this week to create a new AI model trained on Lionsgate's film and TV library. The deal will allow Runway to legally access the library as training data and will also reportedly provide Lionsgate with tools to enhance content creation while potentially reducing production costs.

Lionsgate has apparently decided that AI is a way to boost efficiency in content production. Michael Burns, Lionsgate's vice chair, stated in a press release that AI could help develop "cutting edge, capital efficient content creation opportunities." He added that some filmmakers have shown enthusiasm about potential applications in pre-production and post-production processes. Runway plans to develop a custom AI model using Lionsgate's proprietary content portfolio. The model will be exclusive to Lionsgate Studios, allowing filmmakers, directors, and creative staff to augment their work. While specifics remain unclear, the partnership marks the first major collaboration between Runway and a Hollywood studio.

As Runway co-founder and CEO Cristóbal Valenzuela stated in its press release: "We’re committed to giving artists, creators and studios the best and most powerful tools to augment their workflows and enable new ways of bringing their stories to life … the history of art is the history of technology and these new models are part of our continuous efforts to build transformative mediums for artistic and creative expression; the best stories are yet to be told."

As everyone now knows, generative AI models are master imitators, and video synthesis models like Runway's latest Gen-3 Alpha are no exception. The companies that create them must amass a great deal of existing video (and still images) as samples to analyze, allowing the resulting AI models to re-synthesize that information into new video generations, guided by text descriptions called prompts. The problem for the AI world is that wherever that training data is lacking, it can result in unusual generations. Until recently, AI companies have gotten into legal trouble for scraping vast quantities of media without permission. In fact, Runway is currently the defendant in a class-action lawsuit that alleges copyright infringement for using video data obtained without permission to train its video synthesis models. While companies like OpenAI have claimed this scraping process is "fair use," US courts have not yet definitively ruled on the practice. There are numerous pending lawsuits concerning AI as it applies to music and sound recordings as well as film. With other potential legal challenges ahead, it makes sense from Runway's perspective to reach out and sign deals for training data that is completely in the clear. Even if the training data becomes fully legal and licensed, different elements of the entertainment industry view generative AI on a spectrum that seems to range between fascination and horror. The technology's ability to rapidly create images and video based on prompts may attract studios looking to streamline production. However, it raises polarizing concerns among unions about job security, actors and musicians about likeness misuse and ethics, and studios about legal implications.

As evidenced by the statements so far, news of the deal has not been received kindly among vocal AI critics found on social media. On X, filmmaker and AI critic Joe Russo wrote, "I don’t think I’ve ever seen a grosser string of words than: 'to develop cutting-edge, capital-efficient content creation opportunities'” and film concept artist Reid Southen shared a similar negative take on X: "I wonder how the directors and actors of their films feel about having their work fed into the AI to make a proprietary model. As an artist on The Hunger Games? I'm pissed. This is the first step in trying to replace artists and filmmakers."

It's a fear that we will likely hear more about in the future as AI video synthesis technology grows more capable, and potentially becomes adopted as a standard filmmaking tool. AI can be an excellent tool for creation, but it can also be used as a weapon. As studios explore AI applications despite legal uncertainties and labor concerns, partnerships like the Lionsgate-Runway deal may shape the future of content creation in Hollywood.

Wallace Collins is an entertainment lawyer and intellectual property attorney based in New York with over 30 years’ experience in music, film, television and emerging technology, and he handles many current digital media matters including issues that arise with AI. He was a songwriter and recording artist for Epic Records before receiving his law degree from Fordham Law School. Website: http://www.wallacecollins.com 

COLLABORATION AGREEMENTS FOR AUTHORS AND FILM/TV WRITERS: WHAT THEY MEAN AND HOW THEY WORK

            Under the US copyright law, although ideas alone are not protectable, an author or creator owns a copyright in his or her work the moment the author’s expression of the idea is 'fixed in a tangible medium' (i.e., when the expression of an idea is written down or recorded in some manner). Once created, a copyright extends for the life of the author plus 70 years, and in the case of collaborators on a copyright it extends for the life of the last surviving collaborator plus 70 years.

            This article will focus on the collaboration between and among creators of books, stories, theatrical plays and television shows. The essence of collaboration is working together to create a single work regardless of how or what each party contributes. Collaborators may work together in the same room at the same time, or not. The creative contribution of each co-author may be equal in quality or quantity, or not. Both authors may work together on the total work, or each might write separate chapters or scenes (or with a book or audio/visual production one might write words or dialogue while the other is an artist doing graphics and illustrations, etc.)  The long history of collaboration has shown that there are endless combinations. Co-authors do not need to have a written agreement concerning their joint work, but it is probably a good idea to do so given the myriad issues that can arise and become a problem under such circumstances.

            Co-authors can divide copyright ownership in whatever proportion they determine and that ownership concerns both rights (ownership and control) and revenues (income generated from the work). In the absence of a written agreement, under current case law concerning both copyright and partnership law, two or more collaborators are generally deemed to share equally on a pro-rata basis. This might be so even if it is clear that the contributions of the authors were not equal since the Courts generally prefer not to make decisions about the value of each author’s contribution to a copyright and simply divide it by the number of authors (and we probably prefer that Courts not be making decisions about whether the writing in one scene or a particular chapter has more or less value than that of another, etc.). Therefore, without a written agreement two authors would be deemed to own the song fifty-fifty, three writers one-third each, etc.

            Beyond the issue of just dividing the income, there arises the issue of copyright ownership and control. In the absence of a written collaboration agreement or other contract stating otherwise, each author retains control over its respective share of the copyright. In this way each writer retains some control over what happens with the work, the scope of any uses, contracts or licenses and how much is charged. Under US copyright law, co-authorship is akin to partnership and each joint copyright owner can exploit the work and also grant non-exclusive licenses to third parties, subject to the duty to account to the co-authors for any money that is generated.

            Another important question that can arise is what happens if two or more authors start to collaborate on a work and then one leaves before the work is completed. This can raise complex legal issues concerning whether the contribution of the departing author is copyrightable and whether the parties had a clear intent to work together to create an indivisible copyrighted work. There have been cases that have addressed this situation with differing outcomes depending on different circumstances. In one case, one party had the idea for the play and engaged another party to do more of the actual writing. There was no written agreement, and the parties had a dispute about the direction of the project. The idea party departed and the writing party continued on to complete and produce the work. Later, the departing party sued claiming authorship and co-ownership of the copyright in the work.  In this particular case, the Court determined that, since ideas alone are not protectable under copyright law, only the expression of the idea was subject to copyright, therefore, only the writing party had ownership. The departing party had proposed the original idea for the project and had made suggestions along the way but the contributions were insufficient to create copyrightable material. Therefore, since there was no written agreement to indicate otherwise, the Court determined that only the writing party had an ownership interest in the copyright to the work that the parties had started together. 

            All of these issues can be addressed in a written collaboration agreement. There are endless variations depending on the circumstances. A collaboration agreement can be as simple as a pie chart drawing made on a napkin at the dinner after the writing session, or as complicated as a writer’s publishing company or TV/film production company dictates that it be.

            At the end of the day, if you believe in yourself and your talents, give yourself the benefit of the doubt and invest in good legal representation - all the successful creators do. Your lawyer can create a fair collaboration agreement for you to use or 'translate' the documentation presented to you and explain its terms and then help negotiate more favorable terms for you as appropriate. My advice: never sign anything - other than an autograph - without having your lawyer review it first.

Wallace Collins is an entertainment lawyer and intellectual property attorney. He was a songwriter and recording artist for Epic Records before receiving  his law degree from Fordham Law School. T: (212) 661-3656; wallacecollins@gmail.com; www.wallacecollins.com 

UNDERSTANDING THE OPTION AGREEMENT FOR YOUR SCREENPLAY

Many writers dream that someday their story or script will garner interest from someone who wants to develop it into a feature film or TV project. Usually, the first step is taken when that someone, maybe a producer or a production company or even a movie studio, offers the writer a contract known as an option agreement. As with all such matters where art meets commerce, I always advise that if you are asked to sign anything – other than an autograph – you should have your lawyer review it first. Every writer should have a literary agent and a lawyer advising them about their business dealings once they get to this stage of the process where artistic creation spills over into the business world.

An option agreement at its most basic is a contract whereby the writer grants someone, for a period of time and for a payment, the right to make a film of the writer's screenplay. The three main material issues that usually arise in negotiating such a deal are the length of the option period, the amount of the option payment and the purchase price if the project comes to fruition. How each of these issues will be resolved will vary depending on the negotiating leverage of the respective parties (i.e., whether the writer is a beginner or has had prior success in the industry and whether the producer is an experienced player or just a fledgling production company trying to get traction).

An option agreement will designate an 'option period' or length of time granted to a producer or studio to commence production of the project. It can range from 6 months to 2 years, or longer, depending on the negotiations. Such agreements frequently include additional periods of time for the producer to extend the length of the agreement in consideration of additional payments to the writer.

The option agreement will also set forth an 'option payment', which is the amount to be paid to the writer as consideration for allowing the producer the privilege of utilizing the writer’s screenplay for development purposes. Again, depending on the negotiating strength of each side, this could range from a very small amount (e.g., a few hundred dollars or even one dollar) to a larger payment (tens of thousands of dollars). Then, if the other party wants to extend the option period for an additional length of time there should be additional payments to the writer. In most cases, these additional payments will be negotiated to be substantial even if the first payment is small. The amount of the option payments will vary depending on the negotiation process and other factors such as the writer's track record in the industry and the potential budget of the film or TV project. Some industry experts have said that as a rule of thumb option payments are frequently equivalent to 10% of the purchase price, but these amounts are always negotiable and writers need to be careful not to allow themselves to be taken advantage of in the rush of excitement that surrounds interest in their screenplay.

Another material term in an option agreement is the 'purchase price' which is the amount of money that the writer will receive in the event the screenplay is made into a feature film or TV project. The purchase price is often calculated on a sliding scale as a percentage of the budget, so as the budget of the film project grows, so will the purchase price, although as with all negotiated terms this too can vary greatly. 

When properly negotiated, an option agreement can be a win-win situation for both the writer and the producer. The writer is paid to lease his or her screenplays for a limited period of time, while the producer attempts to get the project green-lighted by a studio or production company. If this happens, the writer will receive a nice purchase price for his screenplay. If it does not happen during the option period, then the writer keeps the option payment or payments paid to date and all rights to the screenplay revert back to the writer. The writer could then decide to option the script again to another producer. From the producer's perspective, an option agreement gives the producer an opportunity to hold on to a screenplay exclusively for a period of time without having to lay out a lot of money up front while trying to get the project off the ground.

Wallace Collins is an entertainment and intellectual property lawyer. He was a recording artist for Epic Records before receiving his law degree from Fordham Law School. Tel: (212) 661-3656; www.wallacecollins.com