About This Service
Film production rests legally on a set of contracts: transfers of copyright, license agreements and agreements on the creation of works. The Law of Georgia on Copyright and Neighboring Rights imposes strict formulas on each of them: Article 36 governs the transfer of property rights, Article 40 the content of the license contract and its unstated terms, Article 42 the form of the contract, and Article 44 the consequences of breach. This page explains what must enter a film project's contract, what happens when the term, the territory or the manner of use is left unwritten, and which form is required for the deal to stand. In a film project these questions are anything but abstract: the allocation of rights in the script, the music and the visual material depends precisely on these norms, and one imprecise clause can hold up an entire distribution chain.
Transfer of Rights and the Boundaries of the License
The starting rule comes from Article 36: an author or other holder of copyright may transfer all property rights, or part of them, to a successor. For license contracts the law is even more precise: the right to use the work in every manner not directly provided by the license contract belongs to the author or other holder (Article 40). If the specific manner of use is not defined, the contract is deemed concluded for such use as may be considered necessary to fulfill the intention the parties had at its conclusion. Rights granted under a license contract may be passed on to other persons, wholly or partly, only where this is directly provided by the contract; and where the royalty for reproduction is set as a fixed amount, the contract must establish the maximum print run of the work. The rule on sublicensing matters most when a film's materials pass to several distributors: unless the right of onward transfer is written into the contract directly, the chain is cut off by law, and every further transfer already becomes an infringement.
The Mandatory Content of the License Contract and the Unwritten Term and Territory
Article 40 requires the license contract to include an exact description of the work to be used — its title, volume and genre — the specific manner of use, the term and territory of the contract, the procedure for determining the royalty or the royalty for each manner of use, the procedure and time limits of payment, and any other terms the parties regard as material. The consequences of silence are also fixed by law: if the term is not provided, the author or other holder may terminate the contract after 3 years from its conclusion, and the licensee must be notified in writing 6 months before termination; if the territory is not provided, the contract operates only on the territory of Georgia. For a film project this means that leaving term and territory unwritten narrows the market automatically: a licensee counting on international distribution without a defined territory in fact keeps only the Georgian market, and without a defined term the license lasts only until the author exercises the right of termination after 3 years. The negotiating value of these clauses therefore lies in writing them down precisely.
Form of the Contract and Liability for Breach
Article 42 settles the question of form categorically: a contract on the transfer of copyright, a contract on the creation of a work and a license contract must be concluded in writing. One exception exists: a license contract on the use of a work in periodical print publications may be concluded orally. The consequences of breach are set by Article 44: a party that has failed to perform, or has improperly performed, an obligation under a property-rights transfer contract, a work-creation contract or a license contract must compensate the other party for the damage caused, including lost profits. Calculating that damage matters all the more in film, where a delay holds up an entire distribution chain.
Frequently Asked Questions
What must a license contract contain?
An exact description of the work (title, volume, genre), the specific manner of use, term and territory, the royalty and the procedure and time limits of payment, plus any terms the parties deem material (Article 40).
Who keeps use rights not written into the contract?
The author or other holder — every manner of use not directly provided by the license contract remains theirs (Article 40).
What if the term or territory is not defined?
Without a term, the author may terminate after 3 years, notifying the licensee in writing 6 months in advance; without a territory, the contract operates only in Georgia (Article 40).
In what form are these contracts concluded?
In writing — transfer, creation and license contracts alike; oral form is admissible only for the use of a work in periodical print publications (Article 42).
How We Help on Legal.ge
We will draft your film project's license and transfer agreements so that the description, manner of use, term, territory, royalty and maximum print run are fixed precisely; explain the consequences of unwritten terms; and assess the prospects of recovering damage including lost profits. Contact us and shield the project from contractual risk.