Collaboration Agreements: How to Avoid the “Joint Work” Rules, and Why It’s Almost Always Better to Have a Written Agreement
You’re in a studio together with two other people and a piano. One of you, by way of singing, presents a chorus – melody and lyrics – to the other two. Another one of you, sitting at a piano, fiddles around on the piano and eventually devises a chord progression for it. Yet another one of you presents a series of extensive lyrics, which end up becoming the verses. Within no time, the three of you have co-written a song. What are each person’s rights?
Any time you create a copyrightable work with someone else – whether it’s co-writing a song, a play, or a treatment for a television series – a collaboration agreement should almost always be drafted and signed.
What are Collaboration Agreements?
Collaboration agreements are agreements amongst co-authors, or co-creators, regarding several important points relating to the co-authors:
(1) Ownership. Who owns the co-authored work, and in what proportion? In other words, who owns the copyright such that they can, among other things, license the work to others, or prepare derivative works based on the co-authored work? If the copyright of the co-authored work is registered, this will affect how it is registered.
(2) Right/Permission to Exploit. Who can exploit (e.g., sell or distribute) the co-authored work? For example, if the co-authored work is a song, can/will all the songwriters list and sell the song on Spotify, or can/will only one of them? Or, will a third party do this on behalf of songwriters?
(3) Royalties. What percentage of royalties is each co-author entitled to when the work is sold or licensed? This is very often, but not always, congruent to copyright ownership proportion. (In songwriting, for example, traditionally, a document addressing this amongst songwriters is known as a “split sheet.”) Additionally, if there were expenses in creating the work which one of the co-authors paid, a recoupment of the expenses to that co-author can be addressed. (For example, if one of the songwriters in the above example paid $100 for the studio time for all three songwriters, then perhaps that songwriter would be paid back his or her $100 first, from any exploitation, before any royalties are split.) Further, how often will royalties be paid (e.g., quarterly)? In what form will payment be sent? Will the payment include a written statement? All of this can be addressed in a collaboration agreement.
(4) Credit. How will each co-author be credited (or perhaps not credited) on distributions of the work? (One example of when this is particularly important is when a book is co-authored by a ghostwriter.)
(5) Final Approval. If the collaboration agreement is being entered into prior to the creation of the work (this is often the case with larger-budget works, i.e., television shows, films, and budgeted music albums), the agreement can address which of the co-authors has final approval of the work (i.e., which of the raw footage, or “takes,” shall constitute the final version of the work).
What happens if I create a work (i.e., write a song, etc.) with someone else, and we have no collaboration agreement?
First of all, this happens all the time. Co-authors often jointly create works without a written agreement. In the depiction presented above, unless they are professional songwriters, it is not typically the first thing on the minds of each of the three songwriters in the studio that they should have a collaboration agreement (and even less commonly that all have the same thoughts regarding the terms of such an agreement, particularly as the work is being created)!
Unless and until you have a collaboration agreement, so long as the co-authors intended their contributions to be merged into a single work in creating the work, the work is considered a “joint work” – and the “joint work” rules apply.
Under the United States Copyright Act, a “joint work” is defined as “a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole.”
What are the “joint work” rules?
The “joint work” rules are as follows:
- Equal Ownership and Royalties. Each co-author owns an equal share of the copyright of the work and is entitled to an equal share of the profits from exploitation. This applies no matter if one author arguably created 10% of the work while the other two authors created the remaining 90%. This is a perfect example of why collaboration agreements are so important!
- Right/Permission to Exploit. Any co-author may exploit the work, so long as he or she accounts to his or her co-authors per above. Note that accounting is based on profits, not revenue.
- Right to Create a Derivative Work. This is where things get really tricky. Any co-author has the right to create a derivative work based on the co-authored work, so long as they account to their co-authors for the value of the underlying work. (How do you calculate this? Was 10% of the co-authored work used, or 90%? There is no exact formula. This is another perfect example of why collaboration agreements are so important!)
If you haven’t gathered by now, collaboration agreements are almost always a good idea.
When is the best time? As soon as possible.
Typically, budget dictates. If a work is costly to create, the co-authors will more likely think in advance to have a written agreement relating to these points. If a work is inexpensive to create, and particularly when the creation is unplanned, collaboration agreements tend not to exist prior to a work’s creation. That being said, if multiple authors created a work, and it is of some actual or potential value, it is almost always best for the authors to enter into a collaboration agreement, so – literally – everyone is on the same page.
This Blog is made available by Romano Law PLLC for general informational and educational purposes only, not to provide specific legal advice. By using this Blog you understand that there is no attorney client relationship between you and Romano Law PLLC or any individual contributor. You should consult a licensed professional attorney for individual advice regarding your own situation.