Update: Changes to Directors’ Rights

Published 30 June 2005

The Copyright Amendment (Film Directors' Rights) Bill 2005 (Cth) (the Bill) was introduced to the House of Representatives on 17 March 2005. This Bill will amend the Copyright Act 1968 (Cth) (the Act) to give directors some legal recognition as “makers” of their films.

The Government chose a system for directors' rights that offers substantially less remuneration and recognition than several of the other options it considered. The Bill makes directors joint copyright owners, along with producers, for the purposes of retransmission statutory licences in Part VC of the Act. What this means is that directors will share in the royalties that are paid to copyright owners when films are retransmitted by Pay TV channels. These rights will not enable directors to control how a film is exploited and directors must continue to rely upon their contractual rights for remuneration for their skill and effort in making the film.

There are essentially three rights relating to copyright in a film.  These are:

1. Moral rights which are non-economic rights relating to copyright – they are the right to be attributed as the author of the copyright material, the right not to be falsely attributed, and the right to take action against derogatory treatment of the work. Directors currently hold moral rights in their films, along with producers and scriptwriters. These rights cannot be assigned, and have no economic value, but rather recognise the personal connection between an artist and their work.
2. The primary economic right which relates to the publication, reproduction, transmission or adaptation of the copyright work.
3. Secondary rights which relate to statutory licences for copyright material, such as the licences available under educational schemes and various retransmission schemes. With these schemes the permission of the copyright owner is not required for the use of copyright material, provided that the owner is remunerated as required by the scheme.

Whilst the Australian Copyright Act generally grants copyright ownership to the person who has created the item, with film the producer is seen as playing an important role as they are responsible for organising arrangements for making the film, including finding financiers. As such, the producer of a film is currently considered the copyright owner.

Generally speaking, the director has the greatest creative control over a film and in some countries this is recognised by granting directors a substantial copyright interest in their film. Most European countries have copyright systems that grant directors some economic rights in their films. Under the European Union Directive for rental rights to the film the director's equitable remuneration is a non-transferable right. Australian directors currently receive money from some of these countries for use of their films in those places, yet they do not receive similar monies in Australia. Moreover the Australian Screen Directors Association has experienced difficulty in negotiating payments under these schemes because of the lack of reciprocal payments available from Australia.

The Government considered five different models for changes to the Act in response to the perceived need to grant directors some form of copyright interest in their films. Briefly summarised, these options were:

1. Maintain the status quo. This model involved no changes to the existing Act and directors would have obtained no additional benefits.
2. Adoption of joint authorship. By giving directors “joint authorship” status they would receive joint rights with producers in all the economic rights arising from the copyright. This would have resulted in a potentially substantial economic right vesting in the director.
3. Co-ownership. This model would have granted directors joint copyright in the film, but it also presumed that primary economic rights vested in the producer. The secondary rights, such as those relating to educational schemes and the retransmission scheme, would not be transferable. This is similar to the copyright system in a number of European Union countries.
4. Remuneration of directors through secondary rights. This model would have granted directors a joint interest in all secondary rights, such as those relating to educational schemes and the retransmission scheme.
5. Remuneration of directors under the retransmission scheme. This was the model adopted, and is discussed below.

The Government preferred this fifth option because it was seen as:

• Granting directors legal recognition as makers of film;
• Granting some ongoing financial remuneration to directors, albeit not to the extent that options 2-4 above provided;
• Not affecting the existing revenue sources relied upon by producers;
• Having minimal direct costs to industry organisations and government;
• Being unlikely to have flow-on effects to the broader community.

Under this fifth option, directors will receive legal recognition as the maker of the film, along with the producer, but only for the purposes of the Pay TV retransmission scheme. Directors will be able to assign (sell) their interest under this right to a third party and there is some concern that directors, particularly those with little bargaining power, will assign these rights to producers and thus not receive this economic benefit at all. If the director is an employee then the employer will be deemed to own the copyright to which the director would otherwise have been entitled.

Directors may well have been hoping for greater recognition and remuneration for their efforts in creating their films. Producers, on the other hand, will appreciate that there will be no changes to their current revenue scheme and that the amendments should have little impact on their ability to attract finance and recoup money on their films. Whether the Bill in its current form will be passed by Parliament remains to be seen. The Bill was referred to the Senate Legal and Constitutional Legislation Committee on the 11 May 2005 and this committee is due to report on 9 August 2005. The proposed changes will only apply to films made after the legislation is passed.