Film rights

Film rights are rights under copyright laws to produce a derivative work (a film in this case) based on an item of intellectual property. According to U.S. law, these belong to the holder of the copyright, who may sell or option them to someone in the film industry (a producer or director or sometimes a specialist broker of such properties) who will then try to gather the other professionals and secure the financial backing needed to convert the property into a film. This is different from the right to exhibit a finished motion picture commercially to an audience; this is usually referred to as "exhibition rights" or "public performance rights".

In the United States, the need to secure film rights of previously published or produced source materials still under copyright stems from case law. In 1907, the Kalem Company produced a one-reel silent film version of General Lew Wallace's novel Ben-Hur without first securing film rights. Wallace's estate, and his American publisher, Harper & Brothers, sued for copyright infringement. The United States Supreme Court ruled in favor of the plaintiffs, establishing the precedent that all adaptations are subject to copyright.

When producers option a script, they are purchasing the right to buy certain rights to intellectual property. A general option fee is 10% of the cost of the rights, should the producers manage to secure full financing for their project and have it "greenlit". Because few projects actually manage to be greenlit, options allow producers to reduce their loss in the event that a project fails to come to fruition. Should the project be greenlit, an option provides a legally binding guarantee to purchase the film rights.

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Wikipedia