[Copyright Lawyer] Exclusive Contract Design Strategy for Creators and Planning Companies

Law firm Veat received a request from an entertainment company (hereinafter referred to as "client") and performed the drafting of exclusive contracts between the client and a producer.

The client was preparing to enter into exclusive contracts to secure talented producers to be responsible for album and music production for affiliated artists. At the same time, they wanted to clearly stipulate in the contract the ownership of copyrights for music produced by the producer and the method of profit distribution.

If the producer performs work such as lyric writing, composing, and arrangement during the music production process, the resulting product may be a "joint work" under copyright law, and generally the rights are vested in the producer, the creator. However, it is also possible to transfer copyright property rights to the planning company through a contract or share only the right to profit distribution.

Law firm Veat designed the contract structure focusing on three major issues.

Collaboration with a producer: What should be included in the contract?

1. Clarifying the scope of copyright assignment or license

Whether to assign all copyright property rights of the creation written by the producer in the contract or to have the planning company have exclusive use rights within a certain range should be selected, and if assignment is made, it is desirable to clearly define 'specification of the creation', 'purpose and scope of use', 'period', and 'consideration'.

2. Specificity of profit distribution criteria

Even when copyright has been assigned, it is common to design a structure that distributes a portion of the profits in recognition of the creator’s contribution. At this time, it is important to specifically state the settlement criteria and method for each profit-generating item such as streaming, downloads, and broadcasting use. Stipulating the distribution ratio, settlement period, and the right to review accounting records can reduce the possibility of disputes in practice.

3. Treatment of rights ownership upon contract termination

Even after the contract ends, the relationship of ownership of copyright for previously created content can still be a legal issue. Therefore, it is necessary to clearly define how the rights and obligations between the planning company and the producer will continue after the termination of the contract. For example, it is necessary to specify the validity of the planning company’s right to continued use and the conditions for subsequent third-party use.

Law firm Veat designed exclusive contracts and copyright profit distribution contracts to be concluded with affiliated producers, considering the client’s situation, focusing on core issues. By proceeding in this way, the collaboration structure with the producer was clarified, and the right relationship for the creation was reconciled in advance to prevent subsequent disputes.

At the heart of the entertainment industry are creators. Among them, "producers," who hold the key to album planning and production, are core figures that determine the success or failure of the content industry. However, as collaboration between planning companies and producers increases, copyright disputes and profit allocation conflicts arising from unclear legal relationships also become frequent.

Conflicts between planning companies and producers usually stem from unclear contracts. In particular, problems are often recognized only after profits have occurred, leading to protracted post-contract disputes or restrictions on content utilization.

Therefore, an exclusive contract with a producer is not a simple employment contract but a complex legal document that deals with the assignment of copyright and the distribution of profits. In order for creative collaboration between planning companies and creators to continue smoothly, it is important to have the help of entertainment legal experts to design the structure of the exclusive contract so that the planning company can focus on content production stably and the producer can receive adequate compensation for their creative activities.

Law firm Veat has experience advising on a large number of exclusive contracts, production contracts, license contracts, and copyright assignment contracts in various content industry sectors such as music, video, and performance, and provides legal advice that adequately reflects industry characteristics when drafting contracts so that they can be practically used in practice.

Law firm Veat also operates a legal advisory team TIP team (Technology Intellectual Property team) specializing in copyright and intellectual property law, and proactively responds to legal issues arising in rapidly changing digital content environments.

The TIP team has expertise in ▲copyright and intellectual property consulting, ▲service structure review, ▲license negotiation, ▲copyright protection strategy establishment and dispute resolution in new technology areas such as IT, software, NFT, metaverse, and games, and provides practical assistance through legal advice from experts who understand both technology and law.

If you have any questions regarding exclusive contracts and other content-related contracts, please contact Law firm Veat.

This case study can also be found on the Law firm Veat blog.

- [Copyright Lawyer] Contract design strategy for creators and planning companies

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Law firm Veat