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Clause & Effect: <b>Non-Monetary Benefits' Impact on Royalty Rights</b>
A right to net-profits participation from entertainment products has often been criticized as meaning little, given the many disputes that have arisen over non-payment. Even producers of highly successful products may argue that their ventures netted little or no net profits. Thus, revenue participants who obtain the right to a percentage of gross or adjusted-gross profits are usually considered in a better position than net-profits participants.
Still, a right to gross profits has its pitfalls. A key issue is what revenues belong in the gross-profit pool. The Court of Appeal of California, Second Appellate District, Division Seven, recently considered this in a case involving the gross-profit-participation right of the author of the book “Who Censored Roger Rabbit?” Wolf v. The Superior Court of Los Angeles County, B169265.
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