October 31, 2013 — As a producer, filmmaker or other creative professional in Nigeria, somewhere along the line, you will learn to never work without a written contract. Yet, it is hard to like contracts because more often than not they are long and boring and all you may wish to do is sign and move on to your next project.
While every license agreement is different and we do not encourage boilerplate agreements, this article highlights some of the clauses contained in a standard Broadcast License Agreement, typically entered into between owners of creative works and TV stations/cable networks.
1. Parties to the Agreement
Although it may appear self-evident, it is important for the Broadcast License Agreement to be made between the party who has the right to grant the license (the licensor — often the owner of the work) and the party who will be exercising that license (the licensee — the TV station/cable networks). The agreement must clearly identify these parties using their full legal names and must specify whether or not the licensee has subsidiaries.
Where there are subsidiaries, the agreement must state whether or not the terms of the agreement extend to the subsidiaries. The agreement should also include the effective date of the agreement, addresses for each of the parties and the jurisdiction of incorporation (if either party is a corporate entity).
2. Recitals and Definition of Terms
While a properly drafted recital is very useful in explaining the context and background of the Broadcast License Agreement and can assist in interpreting the agreement, through the definition clause, parties to the agreement can simplify drafting and set out the limits on the licensee’s rights. It is important to note that terms defined in the agreement have the meaning given to them in the agreement and take precedence over any other common meaning for the terms.
3. Grant of Rights and Usage Restrictions
One of the most critical elements of a Broadcast License Agreement is the grant of rights provision. This provision sets out the scope of restrictions and should be unambiguous. In drafting the agreement, it is important that you set restrictions that take account of new market opportunities, known or emerging technologies, video/optical distribution rights, hotel and hospital distribution, digital and social media, translation of the work, the right to copy and geographical restrictions.
For example, you may restrict the licensee from broadcasting your TV show via cable or satellite including basic cable television, subscription television, pay-per view, satellite television and Internet transmission. You may also restrict the licensee from broadcasting your TV show in certain countries, regions, states, or even cities in Nigeria.
Exclusivity is a huge deal and so you may cover multiple territories granting exclusive license rights in one territory while at the same time providing non-exclusive rights in another.
Again, as a licensor, you may not want your TV Show modified in any manner, for example, changes to the title of the show, editing and alteration of episodes, removal of credits and addition of subtitles or dubbing. A usage restriction may be necessary here to protect the nature of the licensor’s TV show while at the same time allowing room for the licensor to be flexible to the licensee’s needs.
4. License Fee/Payment/Compensation
How are you going to get paid? How much money?
When will you get paid? Consequences for late payment?
The provisions dealing with compensation in your agreement must clarify the above questions. In exchange for the broadcast of the licensor’s TV show, the consideration that the licensee will pay must be clearly stated under the compensation provisions of the agreement. This clause can also be use to specify liability for taxes and the timing and frequency of payments.
5. Delivery and Renewal
Every Broadcast License Agreement must specify a date of delivery and the format for delivery of the content that is the subject of the agreement. For example, delivery may be made via internet-based transmission, DVD or email. The delivery clause must also make provision for consequences of the failure to deliver by the specified date.
Unless the agreement specifies otherwise, the contract terminates at the end of the time specified in the agreement. If the agreement makes provision for automatic renewal, then the contract will continue and the need to renegotiate the license will not arise. If either party is unhappy with the license, then either party may terminate or initiate to renegotiate the license. Where the licensee does nothing and there is an automatic renewal clause, then the agreement will generally automatically renew. Without an automatic renewal clause, the license may only be renewed through a new license agreement executed by both parties.
6. Moral Rights and Credits
In Nigeria, moral rights are granted by the Copyright Act to every work eligible for copyright and they protect the reputation of the author of a work. Moral rights include the right of attribution, the right to have your work published anonymously, under a pseudonym and the right to integrity of the work. Moral rights under Nigerian laws are inalienable and cannot be waived. This means that you cannot sell them in a contract.
The Broadcast License Agreement may specifically state that in broadcasting the TV show, the TV station/cable network must include the licensor’s name, the copyright symbol and year of publication. This way, anyone who has access to the content through the TV station/cable network will be made aware that the content is protected by copyright and owned by you. The licensor may also wish to control where the notice will be placed and the size of the notice.
Close attention should be paid to the assignment clause. This is because it addresses the question of whether the parties are allowed to assign the license to a successor in interest and under what conditions (if any) this may be permitted. In many instances this clause is used to prohibit the licensee from assigning the agreement without prior consent of the licensor but keep in mind that such consent cannot be unreasonably withheld.
8. Warranties, Indemnity and Limitation of Liability
Warranties must be factually correct and reasonable. Through the warranties, the licensor promises that it has not infringed the intellectual property rights of third parties by providing the licensee with the content and warrants that he has the authority to license the content, which does not conflict with any other licenses entered into by the licensor. In the event that any of the warranties are false, then the licensor may have to indemnify the licensee. It is crucial for the warranties contained in the agreement to be clear, non-ambiguous and for them to endure for at least the duration of the license.
The agreement should contain an indemnity clause to the effect that the licensor will pay the cost of any legal expenses and other claims that arise from breaching the warranties in the agreement.
The limitation of liability clause sets out how much and what kind of damages the licensor will pay for. The licensor will want to limit its liability by restricting the amount of damages and excluding certain kinds of damages and harms.
9. Term and Termination
The Broadcast License Agreement must clearly and specifically state the term of the agreement and the provisions under which a party may terminate the agreement, the reasons in support of same and the effect of termination of the Agreement.
10. Resolution/The Right to Solve Disputes Near You
Typically, if you and the other contracting party are in the same city or jurisdiction, there isn’t much to worry about. Issues arise where the other contracting party is in some other place and in those cases they may want things to follow their laws. It is worth negotiating the venue for dispute resolution. You may suggest some place neutral to ensure that neither party gets an unfair advantage but always keep in mind the potential costs that may be associated with disputes. If you pick New York for example as your venue, you may want to keep in mind that the costs of attorney fees and the ticket and hotel costs for you and your local counsel from Nigeria. You may also want to consider other dispute resolution channels like mediation and arbitration, which often save a lot of money for all parties.
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This article is intended to provide general information about the subject matter. Professional legal advice should be sought about specific circumstances.