Can I Show "It's A Wonderful Life" ?

(Editor's note...the following is from the law firm of Probstein & Weiner, an entertainment law firm based in New York City and Los Angeles (www.probsteinandweiner.com). It is based on a series of posts from the FCLS List Server. However, it should not be construed as a legal opinion or as legal advice, and should not be relied upon as such. Rather, it is being presented here as educational material demonstrating the complexity of the "rights" issue. When in doubt, a smart exhibitor will always seek the advice of counsel.)

A member of the FCLS List Server submitted a question to the group. In short, this member had a 16mm print of  the movie IT'S A WONDERFUL LIFE and wanted to know if he could show it to the public - the intention being to exhibit it once and without charging admission. One of the partners of our firm, JON MICHAEL PROBSTEIN, Esq., then submitted a series of posts addressing this issue which, with some editing, now follows:

The copyright laws are quite complicated and often misinterpreted by lawyer and non-lawyers.

We have litigated this issue often: a derivative work, if thrown into the public domain, does not affect the copyright of the original work. For example, if the film CATCH 22 fell into the public domain for whatever reason - the copyright on the original Joseph Heller novel work would prevent anyone from selling, exhibiting, distributing, etc. the film.

Likewise, the film IT'S A WONDERFUL LIFE is a derivative work, according to the present copyright holder, from, among other things, an original short story and/or script. Indeed, most if not all films are considered derivative works - they derive from copyrighted screenplays, theatre, books, etc. (the film SATURDAY NIGHT FEVER, for example,  is a derivative of a copyrighted article that appeared in NEW YORK MAGAZINE).

We have represented copyright holders as plaintiffs, who have collected thousands and thousands of dollars in damages and/or legal fees, and as defendants collectors and companies who have lost thousands and thousands of dollars in damages and/or legal fees on this common misconception of the copyright law. The film IT'S A WONDERFUL LIFE is not - REPEAT IS NOT  IN THE PUBLIC DOMAIN - and everyone in the biz recognizes that now. Even though many once believed that the film itself lost some copyright protection, and at some time, the market was flooded with broadcasts and videos, today it is accepted that the copyright holder of the original work still controls all film rights to the original work. Thus the film, a derivative work, cannot be sold, distributed, copied, broadcast without the consent of the copyright holder of the original work. For example, to date, only NBC has the broadcast rights and that's why you only see it on NBC.  And anyone, who shows the film to the public or otherwise distributes, etc.. without the consent of the copyright holder of the original work, is subject to civil (statutory damages and legal fees runs into the tens and tens of thousands) and perhaps criminal liability for copyright infringement.

In one action, we collected over $50,000 in damages against a video company who only sold $3000 worth of tapes of a show (although the shows themselves failed to include a copyright notice, the scripts to the shows were properly copyrighted and the shows themselves were held to be derivative works.1) The video company claimed public domain, ignorance of the law and everything else that a lot of people claim - and because there were sales made by the defendant, "fair use" and other equitable defenses were not available. This was upheld on appeal to the Second Circuit.

In addition, it should be noted that every copyright issue also has to be evaluated in conjunction with the common law, as well as regular contract law, UCC, etc. It should also be noted that even though infringement will take place when the work is presented, duplicated, sold, published, etc., the courts may find that where there is no monetary gain to the copyright infringer, i.e. "admission" is not charged for example, and where the infringement occurs only once and under certain circumstances, the courts may accept an expansion of the defense of "fair use" or "innocent infringement" or such other equitable defenses. So without going into the complicated workings of the law our response might be to the individual who asked if he could exhibit his print of IT'S A WONDERFUL LIFE to the public once and for free as follows: if the individual has a lawfully obtained print of IT'S A WONDERFUL LIFE  - he has to first ascertain what rights, if any, were granted to him. If public exhibition rights were granted - then he is fine. If public exhibition rights were not granted to him, and if he exhibited the film once and without admission -  although it may be a technical infringement, he will probably not be sued or, if he was sued, the court may during pre-trial conference pressure the plaintiff to settle the case by accepting a consent to a permanent injunction and some nominal damage award. Anything more than one exhibition without admission would be a serious gamble. And if the print was not a lawfully obtained, then no rights whatsoever were granted to him and in addition to the issues above, an additional set of legal problems may also arise.

It should be noted that to some industry leaders and attorneys, any trading and/or collecting of films is a copyright infringement. And some industry people are starting to take notice of the "collectors" who are selling so many prints of films that they are acting as "distributors" and interfering with the legitimate non-theatrical licensing and leasing of film - which, upon certain information and belief, may be what ignited the "ebay issue" on 35mm.

We also wish to point out the following: don't be mislead by claims that films, TV shows, radio broadcasts are in the public domain because of no copyright notice or failure to renew, etc.  THESE ARE OFTEN DERIVATIVE WORKS AND THE COPYRIGHTS ON THE ORIGINAL WORKS ARE STILL VALID AND ENFORCEABLE. In addition, the legal issues discussed in the footnote also must be dealt with. And, without going into any further detail, even if both the derivative and original work were not properly copyrighted, if the work involves the image, name, likeness, etc. of a celebrity - you may be prevented from distributing the work due to the evolving case law and statutes dealing with deceased's right of publicity. So assuming you can find a PD print of Laurel & Hardy, John Wayne, Elvis, etc. be warned - the estates of these and other celebrities, and/or their licensees, may be contacting you.

Footnote 1

Without attempting to confuse the issues any further, it is important to note that a work may be thrown into the public domain if it is "published" without a copyright notice. For example, if a book is published and sold without any copyright notice, it may be deemed to be in the public domain. In this action, one of the issues was whether a broadcast of a TV or radio show can be deemed a publication. The courts had split on this issue and, in this action, the court did not feel it had to address this question because copyrights had existed on the scripts. However, it is a legal argument that a broadcast of a TV show or radio show is not a "publication" and thus a broadcast without a copyright notice will not throw the work into the public domain. Likewise, it is also a legal argument that the exhibition of a film, like a broadcast, is not a publication.

(Editor's note...In response to this post, another member of the FCLS List Server felt that the Copyright Laws unduly favored the movie studios and distributors and submitted the question: "(W)ho benefits, aside from everyone suing everyone else, when an artist's work is buried and made inaccessible?" The following, with some minor editing, is the response from the law firm of Probstein & Weiner. Again, it should not be construed as a legal opinion or as legal advice, and should not be relied upon as such. Rather, it is being presented here as educational material demonstrating the complexity of the "rights" issue. When in doubt, a smart exhibitor will always seek the advice of counsel.)

Well, all "laws" have a political argument to them - today it is should abortion be legal, gay marriages be recognized, Miranda warnings necessary, etc. and in the past it was should slavery be abolished, woman have the right to vote, alcohol be prohibited. There are two sides to every argument and we are certainly not qualified to make any Solomon like decision. With espect to the public's right to have access to an artist's work on one end of the pendulum there are those who hold the view that all work belongs to the public and no one should have a monopoly on any property; and on the other end there are those that hold the view similarly expressed in THE FOUNTAINHEAD.  And then there are those who fall in between which is what the Copyright Laws try to do. Can both the artists and the public benefit from the Copyright Laws? Maybe the following will shed some light.

First, here's a myth to break: everyone in show biz is a millionaire. Fact: the amount of actors, directors, writers, producers, etc. who are flat broke or at near poverty level is staggering. Including many well known celebrities of the past. They far out number the few who are wealthy, they have very little money and, out of the hundreds we have either represented or known personally, most are not pleased with the fact that not only can they not provide for their families today, but they will certainly not be able to provide for them when they are gone.

Some time ago, a very well known writer and director came to us. He was once considered on par with Orson Welles. He was now living on social security in a small two bedroom cottage in Studio City filled with filmcans and other memories of his once glorious past. All of a sudden, there was a revived interest in his work. He wanted to market his works again with added materials, footage, anecdotes, etc. Almost like today's DVD film versions. He found a small reputable company that wanted to market these works not a big organization but small and reputable. They entered into a written licensing agreement. The only filed copyrights, however, were on the scripts which the writer/director duly filed and renewed but there were no filed copyrights on the final works (the company that actually produced the final works was long out of existence and never filed copyrights or renewals). But, based upon a proper interpretation of the copyright laws, the parties knew that all rights to the work belonged to the holder of the original work, viz. the writer/director. And, as per the usual licensing agreement, he was paid an advance and then thousands of dollars were spent on creating the added materials, improving the original masters, special packaging, promotion etc. and finally they were prepared to manufacture and distribute them all over the world. Neither the small reputable company nor the writer/director expected to make millions they just thought they could re-introduce this "auteur's" work to a whole new generation and, at the same time, make a small profit.

On the other end of the country; however, was an individual who claimed he as a "collector"   he actually ran an organization that duplicated and sold whatever he claimed was in the public domain. When he heard that not only was there a renewed interest in this writer/director's work but that there was a plan to market it he went to work. He knew that the writer/director had valid copyrights on the scripts (he at one time actually spoke to thewriter/director to see if he could get a license) but he felt that he could get away with marketing the works, which themselves had no copyright filings (as stated above, the company that actually produced the final works was long out of existence and never filed copyrights or renewals). His interpretation of the copyright law was that if the work is in the public domain, then he, being part of the public, had the right to do whatever he wanted with the works, which included the right to sell it to the public. Somehow, he obtained copies of the works second and third generation. Using these copies as "masters", he manufactured and distributed the works all over the place flooding the market with his cheaper versions which, because they were poorly produced, created a negative reaction and, in effect, destroyed the whole campaign of the writer/director and the small reputable company as distributors decided to drop the product. What the public wound up with was cheap versions which could hardly be utilized, without the added materials by the writer/director. This story does not have a happy ending. Although, we were able to go to court and win an infringement action - the market was already destroyed by then. This "collector/company" dragged out the proceedings for almost 5 years (we had to commence another suit just to collect on the judgment that we won that second suit also dragged on for another two years). Our law firm suffered a huge loss. And so did both the writer/director and the small reputable company: they had elected to recover actual damages as the statutory damages at that time was quite small but the court ruled that they were only able to recover their actual out of pocket expenses and not lost profits. The court also held that even though this was a case of "piracy" and willful infringement at its worst, punitive damages were not available under the Copyright Law (that aspect of the decision was upheld by the circuit court).  The small reputable company almost went bankrupt the writer/director died shortly thereafter, virtually penniless and with a deep resentment towards "collectors" who helped create the renewed interest in his work but at the same time destroyed his ability to market what was rightfully his property not theirs.

With respect to the question of whether it is the major studios and distributors who are holding up the release of many films on video, etc....since the introduction of video in the mid 70's, we have been involved in many instances where films were held back from video release...it is usually due to a dispute between the artist/actor/writer/director/producer, who as the copyright owners are the parties who grant distribution rights to the distributor, versus the distributor. At issue was whether a grant of TV broadcasting rights included video rights. The "artists/actors/writers/directors/producers" claimed that when they granted TV broadcasting rights to the distributor, video was not invented then hence they could not have intended to transfer that right to the distributor. Of course, what they really wanted was a better percentage of profits. These disputes also arose in the past whenever a new invention came around: did the grant of movie rights include talking movies? Did a grant of radio broadcast rights include TV broadcast rights?

But less you think badly of the big companies and distributors they have their own side of the story too like OK we made millions on this film but that superstar's last flop almost bankrupted us.  And remember, show biz is a roller coaster. Today's big shot may be on top but sure enough he may have a reversal of fortune and wind up on the bottom.

Jon Avner