What is the Right of Last Refusal in Film Industry and What Does it Mean?  

The way a licensing agreement is written can make or break your ability to secure future rights to copyrighted work. That you have already purchased some interest in. For filmmakers, the right of first negotiation was once the only real area of importance. When it came to securing the future right to purchase additional rights from an original copyright owner. However, the right of last refusal in film industry contracts is increasingly becoming more commonplace. As filmmakers feel the need to stake a claim to ownership potentially at the very last minute. 

If you’re wondering whether you should keep the right of last refusal in film industry contracts that you’re currently negotiating, you’re not alone.

Many filmmakers now focus their efforts not only on the negotiation of the right of first offer or first negotiation. But also on the right of last refusal too. But why?

What is the Right of Last Refusal in Film Industry Contracts?

The right of last refusal in film industry contracts represents the right that is given to the other party by the original copyright owner allowing them interest in purchasing rights that the copyright owner is ready to sell.

Generally, the right of last refusal clause is contained within an agreement made between a filmmaker and an original copyright owner. In which a contract was entered for the sale of some other rights to the copyrighted work.

Consider This

For example, a filmmaker might enter an agreement to purchase the film rights to a book to film adaptation from an original book author. In the original agreement, the author chooses to keep the right to sell a stage adaptation.

The filmmaker allows the author to maintain this right, but requests that the author provide them the right of first refusal and the right of last refusal. 

This means that if the author later wants to sell their rights to the stage adaptation to a third party? They must first offer the filmmaker the right to purchase these rights.

Say the filmmaker says they do not want to purchase the rights. They give up their right of first negotiation. And the author may then offer the rights to the stage adaptation to another third party player. 

Stage Adaptations

If the author finds another party that is interested in purchasing the stage adaptation rights to their copyrighted book. They must then go back to the filmmaker and offer once again to sell the stage adaptation rights to them.

This is the right of last refusal in film industry contracts that we’re speaking of. And it can be particular daunting for the original copyright owner.

What Happens if the Filmmaker Gives Up the Right of Last Refusal?

If the filmmaker says they do not want to purchase the rights offered by the author? They give up their last right of refusal. This means that the author is then, and ONLY then, free to sell the rights to another party.

Unfortunately, filmmakers that add in the right of last refusal into a contract make it very challenging for an author or other copyright holder to negotiate the sale of rights to their work. Adding a lot of time and extra effort to the mix.