Pitfalls in the Revocation of Filming Rights

In the case of the transfer of exclusive filming rights, the screenwriter or author of the literary template generally has an interest in ensuring that the entitled film producer actually makes use of this right. If this does not occur, the author can exercise his or her right of revocation due to non-exercise. However, the effective assertion of this right can present considerable difficulties.

The right of revocation due to non-exercise requires, on the one hand, the expiry of the statutory (2 years) or contractually extended (up to 5 years) period excluding revocation, and on the other hand, a material breach of the legitimate interests of the author, and further that the author sets the entitled user a reasonable period before the revocation to still make use of his or her right of use. Finally, the reversion of rights as a consequence of the revocation can only become effective if it is not thwarted by sublicences granted in the meantime. With regard to filming rights, revocation is only permitted up to the commencement of filming. Thereafter, only certain ancillary rights (e.g. novelisation, soundtrack, merchandising rights) can be revoked.

If the right of revocation is to be effectively exercised by the author, however, certain special features must be observed, the non-observance of which can lead to considerable difficulties and even to the ultimate defeat of the revocation.

This begins with the duration of the period excluding revocation. As a rule, when transferring exclusive filming rights to a work, the right to grant sublicences without consent is granted. However, according to prevailing legal opinion, the (statutory) duration of the period excluding revocation due to non-exercise begins anew with each further transfer of the rights. Merely as a result of this, revocation can already be excluded for the foreseeable future.

Regarding the question of the exercise of exploitation rights during this period, there is also only apparently clarity. At the latest after the commencement of filming, due to the more recent statutory provision for the actual filming right, revocation is excluded. However, even under the new statutory version, an earlier exercise is conceivable. It is true that the mere undertaking of preparatory measures is probably not yet sufficient exercise of the filming right if by that time neither financing of the film project has been secured nor have contractual obligations been entered into with parties involved such as directors and actors. However, some courts in the publishing sector already regard the grant of sublicences as sufficient exercise of rights, so that such a step might also call into question the existence of the right of revocation itself.

There are equally no reliable indications as to the duration of the follow-up period to be set. After the Regional Court (LG) Munich in a decision of 2007 had required a minimum period of one year, this was corrected by the Higher Regional Court (OLG) Munich to a period of six months. The judgment, however, did not become final. The question thus remains open.
A period set that is too short does not result in the invalidity of the setting of a period, but rather triggers a reasonable period according to law. However, if the author makes reasonable exploitation more difficult due to the period set being too short, even before the expiry of the then legally applicable reasonable period, for example by way of out-of-court or court assertion of claims, then revocation is not permitted even after the expiry of the reasonable period.

Finally, there is much to suggest that, due to the more recent case law of the Federal Court of Justice (BGH) on the continued existence of sublicences granted in the meantime, even a validly declared revocation is practically wholly or partly ineffective if the exclusive right of use has been sublicensed exclusively or non-exclusively in the meantime.

Conclusion

From the author's perspective, in particular the more recent case law has not made the effective assertion of the right of revocation due to non-exercise of filming rights any easier. Only through forward-looking contractual drafting that addresses these problems by supplementary provisions can the author avoid a significant restriction or loss of this important right.