What is the First Negotiation Right in Film Industry and What Does it Mean?
When it comes to copyright ownership, individual rights can be applied to different people in different manners based purely on the wording of a contract. As a filmmaker, you’ve most certainly seen a contract that lists the wording “right of first negotiation” or “first negotiation right” in the film industry. These terms are common in writer’s agreements as well as when it comes to screenplay options and purchase contracts.
In fact, even director’s agreements and actor services agreements will frequently include a clause that has the wording, “first negotiation right.” In film industry standards, what does all of this mean?
What is the Right of First Negotiation in Film?
The right of first negotiation clause is frequently included in contracts. It represents agreements between two parties to use various copyrighted works or intellectual property.
It represents an agreement between the parties. Which basically states that whoever has the “right of first negotiation” will be the first person to be contacted. Should the original copyright owner decide to consider selling rights to someone else.
Basically, if you have the first negotiation right in film industry contracts? Then you will be the first person that the original copyright owner will contact. To ask if you’d like to purchase rights to intellectual property in question.
You have the right to either move forward with the deal and purchase the rights. Or to give up your right so that the original copyright owner can sell the right to someone else.
How Does the Right of First Negotiation in Film Work?
Frequently referred to as the “right of first offer”. This first negotiation right in film industry terms represents the requirement for the original owner of the copyright.
Who must go through good faith negotiations with the individual or studio that is named on the contract as having the right of first negotiation before they begin negotiating with any other parties.
Consider This
To help you understand how it works, consider a situation in which an author sells a filmmaker the rights to create a screenplay adaptation of their original book.
In the original sale or adaptation rights, the author chooses to keep their right to sell future audiobooks or a stage adaptation.
The filmmaker or studio that purchased the film adaptation rights from the author allows them to keep their rights to the audiobook or stage adaptation. But they require that they have the right of first negotiation.
The First Offer
This means that if the author later decides they wish to sell the rights to produce a stage adaptation or an audiobook? They must first offer to sell the rights to the original filmmaker or studio that purchased the film adaptation rights.
If the filmmaker then decides they do not wish to purchase the rights to the stage adaptation or the audiobook, the author may offer the rights for sale to another party. But ONLY after they have first given the filmmaker the right to consider the purchase first.
The Takeaway
As you can see, the first negotiation right in film industry provides a protection for the filmmaker. That allows them to secure future rights to a copyrighted work that they have already invested in.
Should the original copyright owner decide they wish to further relinquish the rights that they had previously kept as their own.
