Production Lawyer's Guide to Obtaining E&O Insurance, Preventing Litigation

The lawyer's job is to make sure that all clearance procedures have been followed. Counsel will either personally deal with them, or will supervise the process to ensure that the production company staff and hired clearance experts have considered and completed all of the steps. The following clearance procedures should be used in all productions, though certain items will not be applicable to shows such as documentaries, and some of the procedures will be more important than others in certain types of shows. Also, this list is not all-encompassing. Keep an eye out for potential problem areas that are unique to particular projects.

Remember that the goal is both to avoid your client losing any litigation, and also to keep your client from becoming entangled in E&O claims that will be expensive, embarrassing and draining, even if the defense is ultimately successful. In making clearance recommendations, err on the side of caution in order to give a margin for error in avoiding claims.

Avoid the accidental use of real names of people, products and organizations.

Normally, the script research company that the producer should have hired performs this task. It will check the names of all characters, products, companies and organizations in a variety of resources (for example, phone directories for the locale where the story is set or where the character or company is from, national or state business listings, and trademark databases). If a character is identified by a particular occupation ' or even sometimes hobbies ' the script researcher will also check the character's name with the appropriate national organizations (like a medical society or antique car collectors' groups). Names of corporations and other organizations should be checked nationally or internationally, depending on the context.

A competent researcher will watch out for similar names, for alternate spellings and for last names (even if the first name is different from the character's if the character is also identified by something else that is distinctive, such as his profession). If there is any doubt at all about whether a character or organization name is safe to use, change it. Sometimes writers get emotionally attached to certain characters' names, but you need to work on them to change the names anyway.

Extra care should be taken with names of characters and organizations that are portrayed negatively. Think of the issue of accidentally identifying a real person or company mainly in terms of the impact on the person or entity inadvertently portrayed: Could it harm the public's perception of a business? Cause a person to be ridiculed? Or make others think that the person has criminal associations? Along this line, it is extremely valuable to ask the writer and key creative personnel if they recognize any names in the script. More than one producer has gotten in big trouble because a writer unkindly named a character after an old school classmate.

Avoid identifying someone by a specific job or his/her involvement in actual events, even if the name is totally fictional.

If a character is identified as the mayor of Toronto or as a baseball player who is known for having broken the world record in most home runs in a single season, the script has gone a long way toward identifying a real person, regardless of the name given the character. (Watch out for organizations, too. The same problem occurs when a business is identifiable through its characteristics, like 'the biggest software manufacturer' or 'a company that owns theme parks in Anaheim and Orlando.')

Likewise, if one of the characters is the head of a large, unnamed American broadcast television network, you have already suggested one of a small handful of people. Other characteristics, like physical traits, gender or previous jobs, may reinforce the impression that the story is portraying a certain real person from that small group.

If people may believe that you have identified a real person, think about how the character is portrayed. Is she a minor, innocuous character? Or is she the primary villain of the film? In general, the larger and/or less positive the role, the more important it is to avoid unfortunate parallels to real people. However, even if the character is likeable, consider whether other people or organizations are also identified because of their connection to the real person who is accidentally identified. In the network executive example, is the character's company portrayed as covering up illegal activities? Is the character's son or daughter portrayed as a drug addict?

Get creative if your client's script has one of these kinds of problems built into it. Sometimes simply removing one or two lines of potentially defamatory dialogue will fix the situation. Or, if the actual mayor of Toronto is a white male, have the client cast the mayor as a woman with a different ethnic background. In some situations, even these kinds of changes won't be enough, but they will be a good start.

Watch out for identifiable locations and addresses.

Depending on the context, accidental use of the actual address of a home or business might be defamatory to a person or company. Consider lines like: 'You know that kid who lives at the corner of Maple and Washington? He's a drug dealer.' If your story is set in a certain city, make sure there is no such intersection there.

Of course, your client will need location releases to film on someone's property. In addition, be aware of problems that can be caused by shooting a scene that has a distinctive building or statue in the shot, whether or not your client is actually on the property. There is an argument for copyright infringement as to filming of the statue (depending on the country of filming), and there are always problems with possibly defaming people or businesses identified by their connection to that building. In addition, some owners of distinctive buildings and landmarks take the position that the building's appearance is the equivalent of a trademark and therefore cannot be shown without permission.

Don't use real phone numbers (with or without area codes), credit-card numbers, social-security numbers and the like.

Note: Some of these clearance procedures might result in problems that are not covered by E&O. For example if someone starts getting charges on his or her credit card because your client used that number on TV, the E&O policy will not cover that claim.

Get permission for most uses of trademarks and logos, and avoid many dialogue references to companies and products.

Commonly seen examples of trademarks and logos include cereal boxes, beer cans, brand names on computers, magazine covers, signs, car logos and material visible on computer screens. It's wisest to mask the trademarks or shoot from angles that make them unrecognizable. Or get a product placement deal if appropriate. Briefly showing a logo is probably not a violation of the trademark owner's rights if it is used in a non-defamatory context, and if the use does not seem to imply endorsement of, or participation by, the trademark owner in your client's show. (This means, for example, that your clients might safely use a trademark in the show itself, but should avoid using that shot in any publicity materials because the context is different. This complicates the publicity process.) It is easier to stay away from unlicensed trademarks and logos. Also, keep in mind that many of these uses will involve copyrighted material in addition to the trademark (e.g., computer screens, magazine covers or cereal boxes), so that your client will need separate copyright licenses (and sometimes consents of people seen in that artwork).

Even if the trademark isn't seen, steer your production clients away from product or company references that are even arguably negative, or make sure there is strong justification for what's being said.

Keep an eye out for the repercussions of referring to real people in a dramatic show or in sketch comedy.

Generally, it is safe to make a passing, non-defamatory comment about a well-known person. (Note, however, that such comments may not be okay when used in publicity and promotional materials, especially if they seem to imply an endorsement of the show, or if the reference seems negative or unfair out of the context of the full show.)

If a production includes satire or parody of a person (presumably someone well-known), consider whether your client is risking a defamation claim. Generally, the issue is whether a portrayal of the person was so absurd that no one could believe it was true. While most satirical sketches are ridiculous enough that no one will take them seriously, sometimes they fall a little flat or are too obscure to be easily understood. When that happens, they may instead come across as tasteless or cruel, or they may seem to be false statements of fact about the person or that person's family members.

Unless your clients get permission from copyright holders, they should not use identifiable props that are protected by copyright.

Examples here include paintings, photographs, posters, sculptures, CD covers and magazines. Reproducing a copyrighted work by including it on film or tape is generally copyright infringement. Do not let your producer's art department and props people assume that buying an art print, poster, etc., is the same thing as buying the right to reproduce it on film. Remind the production team that if they film in someone's house, the fact that the homeowners bought an original painting that is hanging on the wall does not give your client the right to reproduce the art
work by capturing it on film. If your client doesn't want to get permission, advise the art department to make their own original props or shoot the scene in such a way that even the creators of those real works can't recognize them. Some American case law has been unkind to producers who show copyrighted works (or even parts of them) in the background without paying the copyright owner a licensing fee.

Rights of publicity and privacy ' and even trademark rights ' may be pertinent to props such as posters and photographs. For example, if a model or musician has posed for a poster, that person may have placed contractual restrictions on the poster's use before agreeing to pose. (This is not an issue if the photo was a candid shot taken in an unrestricted public location.) Thus, not only would your producer need to get a release from the copyright holder of the poster or photo, but he would need to assure that the model's rights are not violated by the photo's use in your client's production. This assurance might be a warranty from the poster's copyright owner (if reputable) that it has all necessary rights from the poster's subject for this kind of release or access to the model's contract to verify for yourself that this use is permissible, or a separate release from the model or star herself.

As is generally true in clearance work, you will want to be most cautious when the stakes are highest. Take extra care when the prop is most prominent or its use is possibly insulting to its subject or owner, or when the prop or its subject (like a celebrity) is particularly valuable or 'important.'

(As an aside, some producers have responded to some of these warnings by saying that no one would ever bring a claim in this kind of matter because the damages are generally so small. In some cases, this is true. However, intentional violation of the rights of another is not covered by E&O policies. Additionally, the one whose copyright has been violated can sue for an injunction against the release of a production that contains that violation, no matter how seemingly small. Courts do not often issue injunctions, but they have done so over an unlicensed copyrighted prop and the subsequent settlement payment to the prop owner was huge ' far in excess of what it would have cost to get a license in the first place.)

Watch out for miscellaneous copyright problems.

For example, get permission for quotes from copyrighted sources. If a classroom teacher in a fictional film reads a passage from modern classic or a stanza from a poem by a recent poet, this may not be 'fair use' under copyright law ('fair dealing' in some countries), so your client will need permission from the copyright owner. A much bigger and complex copyright issue involves fair use in criticism and parody. That topic is too extensive to cover in this article, and production counsel should consider use of an outside expert if a project has those fair use issues.

One problem area involves the incorporation of public domain works in a film or television production. 'Public domain' describes a work whose copyright has expired or never came into existence, so that the public can use it freely. Whether a work has in fact gone into the public domain is a complicated legal issue. For example, the length of U.S. copyright protection is now generally life of the author plus 70 years, but many countries have changed their terms of protection at different points in recent decades. A work's copyright status will depend on many variables. Some works that seem too old will still have copyright protection because of peculiarities of the laws in certain countries. When in doubt about a public domain question, assume the worst, or get the opinion of a copyright expert.

Another particularly tricky area involves accidental copyright violation by using a copyrighted version of a public domain work. For example, many translations of public domain classic books are protected by copyright. (Only the original contributions of the translators are protected, though.) Also, some public domain books (especially those for children) have been published with later illustrations that are still copyrighted.

Another hazardous situation is one where a producer wants to do a new version of a public domain story when someone else has already done another film or cartoon version. The producer must take great care to use just the elements found in the public domain version and not those that were original to the later version. Our perception of a public domain story (such as Alice in Wonderland or Wizard of Oz) is affected by popular later versions (like the Disney cartoon or the MGM musical). Unless we examine the original public domain work carefully, we may wrongly assume that some visual images, lines or plot points are public domain elements when they are actually new elements from the other, more recent version (such as Dorothy's ruby slippers, which were originally silver in Oz).

Be Aware of the Abend Doctrine

There is one last copyright problem to keep in mind. It is unique to U.S. copyright law and it is known as the Abend doctrine, from Stewart v. Abend, 495 U.S. 207 (1990) ('the Rear Window case'). If your client will be using any materials (songs, books, film clips, etc.) first copyrighted prior to 1978 in the United States, you need to be aware of Abend. If the work is pre-1978, find out whether the author died prior to the 28th year of copyright protection. If he or she did, inspect the rights history to see if the current apparent owners of the rights got their rights from the author prior to his or her death, or whether they obtained them (or a re-confirmation of those rights) from the author's heirs after his or her death. The latter is what they need to clearly retain the rights that your client is now licensing. (Please note that this is a simplified explanation of the Abend issue to help counsel spot the issue, and it is not intended to explain the entire doctrine.)

Part III, next month, covers some remaining clearance areas, including music, visual clips and special problems in advertising and publicity.

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Debra Hodgson began her career as a Los Angeles entertainment litigator representing major studios and entertainment insurance companies. Now based in Denver, she is a sole practitioner specializing in E&O risk assessments for entertainment insurance carriers in North America and abroad. She can be reached at 303-796-1006. This article is a source of general information only. Laws are subject to change and vary by jurisdiction. This article does not constitute legal advice, and it does not necessarily reflect positions taken by any clients of the author.

Part One discussed what is and isn't covered by errors and omissions (E&O) insurance and examined general clearance guidelines for film and TV. Part Two continues the discussion with specific clearance procedures for production counsel to consider.

The following procedures are primarily relevant to dramatic works. If the client's project is factual (such as a documentary or docudrama), the procedures below will only be part of what counsel will need to take into account. (The clearance issues that are unique to fact-based projects are beyond the scope of this article.)

Strongly urge your client to use a research service to handle many of the standard detailed clearance procedures that are discussed in this installment. Most producers, lawyers and their staffs are not equipped to handle these procedures efficiently or adequately. The small producer who is trying to cut costs by doing without a script research report should be warned that it is much more convenient, and ultimately less expensive, to pay a research service that specializes in these matters. Insurance lawyers usually don't look kindly on the do-it-yourselfers in this area, and this can have a negative impact on E&O insurance premiums. Also, the production lawyer will have to spend extra time on script review and clearances if there is not a reliable research service's clearance report to work with.

The lawyer's job is to make sure that all clearance procedures have been followed. Counsel will either personally deal with them, or will supervise the process to ensure that the production company staff and hired clearance experts have considered and completed all of the steps. The following clearance procedures should be used in all productions, though certain items will not be applicable to shows such as documentaries, and some of the procedures will be more important than others in certain types of shows. Also, this list is not all-encompassing. Keep an eye out for potential problem areas that are unique to particular projects.

Remember that the goal is both to avoid your client losing any litigation, and also to keep your client from becoming entangled in E&O claims that will be expensive, embarrassing and draining, even if the defense is ultimately successful. In making clearance recommendations, err on the side of caution in order to give a margin for error in avoiding claims.

Avoid the accidental use of real names of people, products and organizations.

Normally, the script research company that the producer should have hired performs this task. It will check the names of all characters, products, companies and organizations in a variety of resources (for example, phone directories for the locale where the story is set or where the character or company is from, national or state business listings, and trademark databases). If a character is identified by a particular occupation ' or even sometimes hobbies ' the script researcher will also check the character's name with the appropriate national organizations (like a medical society or antique car collectors' groups). Names of corporations and other organizations should be checked nationally or internationally, depending on the context.

A competent researcher will watch out for similar names, for alternate spellings and for last names (even if the first name is different from the character's if the character is also identified by something else that is distinctive, such as his profession). If there is any doubt at all about whether a character or organization name is safe to use, change it. Sometimes writers get emotionally attached to certain characters' names, but you need to work on them to change the names anyway.

Extra care should be taken with names of characters and organizations that are portrayed negatively. Think of the issue of accidentally identifying a real person or company mainly in terms of the impact on the person or entity inadvertently portrayed: Could it harm the public's perception of a business? Cause a person to be ridiculed? Or make others think that the person has criminal associations? Along this line, it is extremely valuable to ask the writer and key creative personnel if they recognize any names in the script. More than one producer has gotten in big trouble because a writer unkindly named a character after an old school classmate.

Avoid identifying someone by a specific job or his/her involvement in actual events, even if the name is totally fictional.

If a character is identified as the mayor of Toronto or as a baseball player who is known for having broken the world record in most home runs in a single season, the script has gone a long way toward identifying a real person, regardless of the name given the character. (Watch out for organizations, too. The same problem occurs when a business is identifiable through its characteristics, like 'the biggest software manufacturer' or 'a company that owns theme parks in Anaheim and Orlando.')

Likewise, if one of the characters is the head of a large, unnamed American broadcast television network, you have already suggested one of a small handful of people. Other characteristics, like physical traits, gender or previous jobs, may reinforce the impression that the story is portraying a certain real person from that small group.

If people may believe that you have identified a real person, think about how the character is portrayed. Is she a minor, innocuous character? Or is she the primary villain of the film? In general, the larger and/or less positive the role, the more important it is to avoid unfortunate parallels to real people. However, even if the character is likeable, consider whether other people or organizations are also identified because of their connection to the real person who is accidentally identified. In the network executive example, is the character's company portrayed as covering up illegal activities? Is the character's son or daughter portrayed as a drug addict?

Get creative if your client's script has one of these kinds of problems built into it. Sometimes simply removing one or two lines of potentially defamatory dialogue will fix the situation. Or, if the actual mayor of Toronto is a white male, have the client cast the mayor as a woman with a different ethnic background. In some situations, even these kinds of changes won't be enough, but they will be a good start.

Watch out for identifiable locations and addresses.

Depending on the context, accidental use of the actual address of a home or business might be defamatory to a person or company. Consider lines like: 'You know that kid who lives at the corner of Maple and Washington? He's a drug dealer.' If your story is set in a certain city, make sure there is no such intersection there.

Of course, your client will need location releases to film on someone's property. In addition, be aware of problems that can be caused by shooting a scene that has a distinctive building or statue in the shot, whether or not your client is actually on the property. There is an argument for copyright infringement as to filming of the statue (depending on the country of filming), and there are always problems with possibly defaming people or businesses identified by their connection to that building. In addition, some owners of distinctive buildings and landmarks take the position that the building's appearance is the equivalent of a trademark and therefore cannot be shown without permission.

Don't use real phone numbers (with or without area codes), credit-card numbers, social-security numbers and the like.

Note: Some of these clearance procedures might result in problems that are not covered by E&O. For example if someone starts getting charges on his or her credit card because your client used that number on TV, the E&O policy will not cover that claim.

Get permission for most uses of trademarks and logos, and avoid many dialogue references to companies and products.

Commonly seen examples of trademarks and logos include cereal boxes, beer cans, brand names on computers, magazine covers, signs, car logos and material visible on computer screens. It's wisest to mask the trademarks or shoot from angles that make them unrecognizable. Or get a product placement deal if appropriate. Briefly showing a logo is probably not a violation of the trademark owner's rights if it is used in a non-defamatory context, and if the use does not seem to imply endorsement of, or participation by, the trademark owner in your client's show. (This means, for example, that your clients might safely use a trademark in the show itself, but should avoid using that shot in any publicity materials because the context is different. This complicates the publicity process.) It is easier to stay away from unlicensed trademarks and logos. Also, keep in mind that many of these uses will involve copyrighted material in addition to the trademark (e.g., computer screens, magazine covers or cereal boxes), so that your client will need separate copyright licenses (and sometimes consents of people seen in that artwork).

Even if the trademark isn't seen, steer your production clients away from product or company references that are even arguably negative, or make sure there is strong justification for what's being said.

Keep an eye out for the repercussions of referring to real people in a dramatic show or in sketch comedy.

Generally, it is safe to make a passing, non-defamatory comment about a well-known person. (Note, however, that such comments may not be okay when used in publicity and promotional materials, especially if they seem to imply an endorsement of the show, or if the reference seems negative or unfair out of the context of the full show.)

If a production includes satire or parody of a person (presumably someone well-known), consider whether your client is risking a defamation claim. Generally, the issue is whether a portrayal of the person was so absurd that no one could believe it was true. While most satirical sketches are ridiculous enough that no one will take them seriously, sometimes they fall a little flat or are too obscure to be easily understood. When that happens, they may instead come across as tasteless or cruel, or they may seem to be false statements of fact about the person or that person's family members.

Unless your clients get permission from copyright holders, they should not use identifiable props that are protected by copyright.

Examples here include paintings, photographs, posters, sculptures, CD covers and magazines. Reproducing a copyrighted work by including it on film or tape is generally copyright infringement. Do not let your producer's art department and props people assume that buying an art print, poster, etc., is the same thing as buying the right to reproduce it on film. Remind the production team that if they film in someone's house, the fact that the homeowners bought an original painting that is hanging on the wall does not give your client the right to reproduce the art
work by capturing it on film. If your client doesn't want to get permission, advise the art department to make their own original props or shoot the scene in such a way that even the creators of those real works can't recognize them. Some American case law has been unkind to producers who show copyrighted works (or even parts of them) in the background without paying the copyright owner a licensing fee.

Rights of publicity and privacy ' and even trademark rights ' may be pertinent to props such as posters and photographs. For example, if a model or musician has posed for a poster, that person may have placed contractual restrictions on the poster's use before agreeing to pose. (This is not an issue if the photo was a candid shot taken in an unrestricted public location.) Thus, not only would your producer need to get a release from the copyright holder of the poster or photo, but he would need to assure that the model's rights are not violated by the photo's use in your client's production. This assurance might be a warranty from the poster's copyright owner (if reputable) that it has all necessary rights from the poster's subject for this kind of release or access to the model's contract to verify for yourself that this use is permissible, or a separate release from the model or star herself.

As is generally true in clearance work, you will want to be most cautious when the stakes are highest. Take extra care when the prop is most prominent or its use is possibly insulting to its subject or owner, or when the prop or its subject (like a celebrity) is particularly valuable or 'important.'

(As an aside, some producers have responded to some of these warnings by saying that no one would ever bring a claim in this kind of matter because the damages are generally so small. In some cases, this is true. However, intentional violation of the rights of another is not covered by E&O policies. Additionally, the one whose copyright has been violated can sue for an injunction against the release of a production that contains that violation, no matter how seemingly small. Courts do not often issue injunctions, but they have done so over an unlicensed copyrighted prop and the subsequent settlement payment to the prop owner was huge ' far in excess of what it would have cost to get a license in the first place.)

Watch out for miscellaneous copyright problems.

For example, get permission for quotes from copyrighted sources. If a classroom teacher in a fictional film reads a passage from modern classic or a stanza from a poem by a recent poet, this may not be 'fair use' under copyright law ('fair dealing' in some countries), so your client will need permission from the copyright owner. A much bigger and complex copyright issue involves fair use in criticism and parody. That topic is too extensive to cover in this article, and production counsel should consider use of an outside expert if a project has those fair use issues.

One problem area involves the incorporation of public domain works in a film or television production. 'Public domain' describes a work whose copyright has expired or never came into existence, so that the public can use it freely. Whether a work has in fact gone into the public domain is a complicated legal issue. For example, the length of U.S. copyright protection is now generally life of the author plus 70 years, but many countries have changed their terms of protection at different points in recent decades. A work's copyright status will depend on many variables. Some works that seem too old will still have copyright protection because of peculiarities of the laws in certain countries. When in doubt about a public domain question, assume the worst, or get the opinion of a copyright expert.

Another particularly tricky area involves accidental copyright violation by using a copyrighted version of a public domain work. For example, many translations of public domain classic books are protected by copyright. (Only the original contributions of the translators are protected, though.) Also, some public domain books (especially those for children) have been published with later illustrations that are still copyrighted.

Another hazardous situation is one where a producer wants to do a new version of a public domain story when someone else has already done another film or cartoon version. The producer must take great care to use just the elements found in the public domain version and not those that were original to the later version. Our perception of a public domain story (such as Alice in Wonderland or Wizard of Oz) is affected by popular later versions (like the Disney cartoon or the MGM musical). Unless we examine the original public domain work carefully, we may wrongly assume that some visual images, lines or plot points are public domain elements when they are actually new elements from the other, more recent version (such as Dorothy's ruby slippers, which were originally silver in Oz).

Be Aware of the Abend Doctrine

There is one last copyright problem to keep in mind. It is unique to U.S. copyright law and it is known as the Abend doctrine, from Stewart v. Abend , 495 U.S. 207 (1990) ('the Rear Window case'). If your client will be using any materials (songs, books, film clips, etc.) first copyrighted prior to 1978 in the United States, you need to be aware of Abend. If the work is pre-1978, find out whether the author died prior to the 28th year of copyright protection. If he or she did, inspect the rights history to see if the current apparent owners of the rights got their rights from the author prior to his or her death, or whether they obtained them (or a re-confirmation of those rights) from the author's heirs after his or her death. The latter is what they need to clearly retain the rights that your client is now licensing. (Please note that this is a simplified explanation of the Abend issue to help counsel spot the issue, and it is not intended to explain the entire doctrine.)

Part III, next month, covers some remaining clearance areas, including music, visual clips and special problems in advertising and publicity.

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Debra Hodgson began her career as a Los Angeles entertainment litigator representing major studios and entertainment insurance companies. Now based in Denver, she is a sole practitioner specializing in E&O risk assessments for entertainment insurance carriers in North America and abroad. She can be reached at 303-796-1006. This article is a source of general information only. Laws are subject to change and vary by jurisdiction. This article does not constitute legal advice, and it does not necessarily reflect positions taken by any clients of the author.