Davies described how Cunliffe sold his rights to his creation:
“[Cunliffe] agreed that Woodland Animations could make films and produce merchandise, while he would still have the right to produce books providing they included illustrations based on [Ivor] Wood’s puppets.”
Then one day Cunliffe saw there was a book being published about Postman Pat which was not by, or even approved by him. When he challenged this:
“It turned out that this was not a book, because it was printed on card instead of paper. It was ‘merchandising’. It was a legal distinction that passed Cunliffe by but now he watched as the shops were bombarded with books that weren’t books: more comics, more annuals, activity books, sticker books, magic painting books, nursery rhyme books, books with wheels, books for baths, musical books, colouring books, press-out books, books with recipes and knitting patterns and all of them were all about Greendale – and nothing to do with John Cunliffe.”
I have not seen the contract, and nor was this matter the subject (as far as I know) of any reported case. I can only go on what Davies, a distinguished reporter, says in his report.
(And nothing in this post should be taken to be critical of the media company: this post is simply to use the Davies report as a way of understanding practical media law.)
All that said, reading the Davies report, a couple of legal points came to my mind which may be relevant if you are a creative seeking to have an agreement with any media company.
First, the word “merchandise” is indeed vague, and you can perhaps see the argument which the other side were making.
And we do not know if the word was defined in the contract, though from the news report it seemed not. (For example, in many standard forms in the film industry, “merchandising” generally excludes publishing.)
In any case, if you are a creative and are being invited to sign away or even licence rights in a creation then you should not be afraid to insist that those wanting to exploit your works spell out exactly what they mean by broad terms like “merchandising”.
You should not just nod along.
And second, I am not certain that the other side’s legal position (as reported by Davies) is beyond doubt. Whatever “merchandising” means (and we do not know if it was a defined term), it presumably could not be taken to mean something which would circumvent or frustrate other provisions in a commercial agreement.
In other words, what is contained within “merchandise” should not undermine the retained rights of an author to write books.
If it means anything, “merchandise” would not be just what one party to contract says it was: any term of a contract needs to be interpreted in the context of the contract as a whole.
No clause or definition in a contract ever exists in isolation.
Of course, a creative should take legal advice before entering into any agreement (and a lawyer would say that, wouldn’t they?).
But had a media lawyer looked at that contract, he or she could either have sought clarification and amendment from the other side as to what was meant by that and other key terms.
And, if the other side were inflexible (“take it or leave it”), he or she could have explained to you as a creative exactly what you could expect, so that there were no unpleasant surprises.
You would know where you stood.
This, however, is the counsel of perfection. Creatives are not often in a position to instruct or pay lawyers at the agreement stage, and it is often not possible to predict whether a work will generate enough commercial success to make paying a lawyer worth it.
But all is not lost.
Even after an agreement has been signed, a creative should still contact a lawyer if it then appears that the other side are being unfair or relying on a provision the import of which was not obvious at the time the agreement was signed.
It may be that whether a clause or definition actually applies can be sensibly disputed. And as a creative, you are the “root of title” and this gives you power, and you will also have “moral rights” which you can assert.
Media companies want to make money: and there is nothing wrong with this. But as well as wanting to make money, they will want legal certainty.
Any sophisticated merchandising or licensing arrangement needs to have a sequence of clearances and releases in place.
If there is any doubt as to the scope and nature of the rights in question, then certain commercial decisions may have to be made differently.
So if it becomes apparent that there is serious doubt as to whether a media company has actually the rights it needs to go forward with certain projects, then there are two likely responses.
The project may be shelved or spiked.
Or the media company will seek to achieve certainty instead of uncertainty, often by amending the contract and offering you as the creative more cash or a greater say.
You may well have leverage, even well after an agreement has been signed.
There are often things which can be done if you as a creative get legal advice, whether before or after any agreement is in place.
Creatives have rights, and they should never be afraid to assert them and to obtain the legal advice which will help them do so.
David Allen Green is a writer and lawyer, and is a consultant solicitor practising in media and commercial law at Preiskel & Co LLP