5 Chain of Title Problems That Kill Distribution Deals (And How to Avoid Every One)

FILM & TELEVISION LAW // FOR PRODUCERS & FILMMAKERS

By the time your E&O carrier finds these problems, you’re already paying for them.

The deals that fall apart have the same core issues at the center: chain of title problems that could’ve been addressed but were ignored through ignorance, naivete, or presumption.

Here are the five film chain of title mistakes that attorneys encounter most often — along with applicable remedies:

1. The Underlying Rights Were Never Properly Secured

This is a foundational error.  When a project gets developed and either before the screenplay gets written or production begins, the underlying rights should be thoroughly reviewed and where necessary, either licensed or cleared.  If a project is blessed to have a sequel, re-boot, or spin-off, those rights need to be re-evaluated as if the project were new.  Rights secured for an original production will rarely transfer in their exact form from one project to another.  Sequel and spin-off rights are contracted separately, where even common underlying rights to both films should be re-evaluated.

A distribution deal requires you to prove you had the right to make the project in the first place.  See our blog post what Chain of Title is and how to make sure you have it perfected!

What “clean” looks like:  

Reviewed agreements signed and in place before development spending begins.
All terms and conditions drafted as deliberately as necessary.
Sequel/spinoff rights explicitly considered in the original agreement.

2. Collaborator Agreements Are Missing or Incomplete

You did a great job securing all third-party rights agreements – the film adaptation rights, music licenses, and other script clearance, except there’s that other part of the production.  Creators often forget to button up all of their collaborator agreements.  These are the agreements that clarify all the rights to your film on your side of the process including other creators, co-producers, and investors. If those relationships aren’t documented in writing, they’re potential ownership claims that simmer under your chain of title that start to boil the moment a project gets picked up.

What “clean” looks like: 

Every copyrightable contribution to the project should have a signed agreement
You should include work-for-hire or assignment language everywhere applicable.
Documenting and leaving a paper trail wherever possible for easier legitimation.

3. Work-for-Hire Language Is Missing 

Under U.S. copyright law, independent contractors own what they create unless a written agreement says otherwise. Your cinematographer, your composer, or your VFX artist could potentially own their contributions to your project without explicit assignment or work-for-hire language in their agreements.  At that point, you’d have to prove why they don’t, although there is current case law that favors an ‘expectation of a unified creator’ theory.

In the case Aalmuhammed v. Lee, a consultant who made substantial creative contributions to the film Malcolm X — including rewriting scenes for the film and consulting actors on set — later claimed co-authorship and a share of the copyright. The court ultimately rejected the claim upholding Spike Lee’s full ownership under the “dominant author” theory, that the person who superintends the work is more likely to have authored the work.  Still, proper assignment language prevents this from being a dispute at all. 

This is among the most common and most preventable chain of title problems at the independent level. The agreement exists but the assignment language doesn’t!  By law, ownership assignments need to include the ownership transfer language explicitly and be signed by both parties to be binding.  This is unlike a lot of other contract law where oral agreements or inference from behaviors can otherwise be upheld.

What “clean” looks like: 

Every necessary agreement includes clear work-for-hire or assignment language.
When in doubt, you proactively seek out a work-for-hire or assignment addendum.
A written analysis of all party agreements and any potential ownership claims.

4. Music Clearances And the Dual Copyright System

Every music track in your film or television project requires two separate licenses: a sync license for the underlying composition and a master license for the specific recording. Even if you’re getting both licenses from the same owner, a single agreement still needs to consider both copyrights.

A sync license may be negotiated strictly for festival use, but not extend beyond that.  A master use (sound recording) license cleared for limited distribution may not cover all necessary international compliance.  When the scope of your clearances and the scope of your distribution deal don’t align, you either renegotiate (sometimes at a cost) or you may have to pull the music entirely.

What “clean” looks like: 

Clearances drafted with consideration of your anticipated distribution terms.
A copyright clearance log for your project that contains all music sync instances.
A music licensing section of your clearance binder containing all license documentation.

5. Your Biggest Issues Come At The E&O Stage

E&O insurance is required by every major distributor and streaming platform.  Every E&O carrier reviews your chain of title documentation and will meaningfully base approval of your policy based on how clean your documentation is.  What they’re looking for is any broken or undocumented ownership issues or right omissions.  The ideal candidate has no gaps and no unresolved claims.

Discovering a chain of title problem at the E&O stage is of course the least ideal time to find one and even more so if you have any distribution deadlines pending.  The leverage to renegotiate early-stage agreements is gone and there’s no assurance of an easy fix.

What “clean” looks like

A presentable chain of title clearance log is a good place to start!
Having all documents and contracts organized a comprehensive clearance/E&O binder.
Doing a full chain of title review at every important phase of your production! 

The Pattern Here Is Consistent

Every one of these problems is preventable and many filmmakers learn these lessons early in their careers, often on low-budget indie projects as young creators.  Still, film productions are complex organisms each with their unique and sometimes voluminous clearance and rights issues.  Yet no matter how thick your clearance/chain-of-title binder is, all clearance problems risk being significantly more expensive the later they’re discovered.  As I mentioned in my earlier post on chain of title, producers who treat their chain of title as the critical development asset it is markedly improve their chances of a successful production.  A chain of title is something to build from the start, not a checklist to complete before closing.

This makes all the difference about whether you’re reaching out to an entertainment attorney in a position of urgency rather than strategy.

If your project is heading toward financing or distribution conversations and you haven’t had a chain of title review, now is the right time — not after the E&O carrier weighs in.

Questions about your chain of title? Contact us at info@zalaiplaw.com.