Running a short film competition can be an attractive marketing tool for your business or business venture. But your campaign must be well thought out and fair so to avoid negative publicity – or lawsuits for that matter. This article will run you through the legal considerations you should consider when running a short film competition.

Terms and Conditions of Entry

You will need to think about the standard terms and conditions of entry, including: 

  • Whether there is an entry fee;
  • Whether the film can be sponsored (in cash or in kind);
  • The identity of the entrant or entrants;
  • The terms of your copyright licence and when it starts;
  • Warranties from the entrants about ownership of all IP rights; and
  • Details about the prizes.

Upon entry, the entrant and you will be bound by all terms and conditions. That is, unless the terms are considered unfair (refer to sections 23 to 28 of the Australian Consumer Law (Cth) and the explanation below). This article will now outline the sorts of things you will need to think about when drafting your terms of entry.   

Films and Copyright

In Australia, copyright is an automatic protection granted to creators of “works” (e.g. scripts, screenplays, musical works and artistic works) and “subject matters other than works” (e.g. films, sound recordings and broadcasts). The creator of copyright works obtains their rights from the Copyright Act 1968 (Cth). It is only the copyright owner who can reproduce and adapt their work or consent to its reproduction and adaptation. Accordingly:

  1. If the purpose of your competition is to distribute or change the films that have been entered in the competition, you will need to obtain an assignment of copyright or an appropriately broad licence from the copyright owner.  
  2. If the entrants are using others works or property as part of their film (i.e. music soundtracks, filmed on private property, based on a true story that is published), they will need to have obtained all the relevant clearances. Therefore, it is important to incorporate warranties (see further under Warranties below).

Licensing and assignment of copyright

You will need to think about what you want to do with the entries. Even if you merely want to show the film as a once off and are happy for the copyright owner to commercialise and perhaps adapt it after the competition is over, you will still need to incorporate permission for this into the terms of entry.

In securing a licensing agreement, you will have the opportunity to stipulate the terms of which you and the entrant may use the film. A license will not formally transfer ownership of the copyrights in the film to you, but it can incorporate a number of important details, including: 

  • The purpose or breadth of the licence; 
  • Whether the licence to use the film is exclusive to you; 
  • The territory of the licence; 
  • Payment for the licence; and
  • Rights or restrictions on sub-licensing the film.  

In securing an assignment of copyright, you will be obtaining ownership of the copyright. However, unnecessarily one-sided terms that seek to transfer all the entrants copyrights to you are unlikely to be accepted and and may affect the overall viability of the competition.

Warranties From Entrants

Importantly, entrants should provide you with warranties upon their entry into the competition, on a number of matters, such as: 

  • The film is all the entrant’s own work; 
  • The entrant has obtained all necessary copyright clearances; and/or 
  • The film has never previously been shown in public.  

It is common that an entrant will compensate the competition organiser for any loss or damages suffered because of the entrant’s breach of any of these warranties.    

It may be prudent of you, and to your benefit, to highlight these important clauses and maybe include some Q&A on your competition website to help entrants fully understand their obligations under them.

Unfair Terms

Most terms of entry will be considered to be “standard form contracts” as they are not negotiable by the entrants. Where a term of a standard form contract is considered to be unfair under the Australian Consumer Law (Cth), that term will be rendered void (ineffective). A term of a contract may be considered unfair particularly where the terms are very one-sided (i.e. more than is reasonably necessary to protect your business interests) and would cause detriment, financial or otherwise, to the other party.

Only a court can determine when a term is unfair. In the process of its decision making, the court will consider: 

  1. Whether the terms were transparent; and 
  2. The contract as a whole.  

Accordingly, it’s critical that you disclose the terms and conditions of entry to your applicants. You should also be honest and not hide any terms that might be considered curly or cause a significant imbalance in the parties respective positions.

Prizes

You will need to determine and carefully explain the prizes in the terms of entry as well as how they will be awarded. If necessary, you should also include provisions about unclaimed prizes and perhaps substitution of prizes.

It is important that you deliver on the prizes you have offered. If you don’t, an applicant may be able to terminate the contract and sue for damages caused as a result of a breach of contract and/or recover damages for misleading and deceptive conduct. You may lose all rights to use or show the film that you had expected to obtain through your contract with the entrant.

Location of the Competition

If you intend to hold your competition as part of a festival or other event, it will be important to make this clear to entrants and if you are running the event, to ensure you have obtained all necessary permits, for example, from the local council.    

Insurance

Standard forms of insurance include public liability insurance for the festival or event, and perhaps business risk insurance to cover events outside of your control impacting the competition. The business insurance you require will vary depending on the nature of your competition. It may be useful to speak with an insurance broker who can provide advice and relevant quotes.

Key Takeaways

There are many legal considerations you will first need to think about before hosting a short film competition. It is important that you carefully examine what you hope to achieve and incorporate the precise and appropriate terms and conditions upon entry. You will also need to ensure you fulfil your end of the bargain.

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If you need assistance drafting the terms of entry for your short film competition, or have any questions, get in touch on 1300 544 755.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.
Catherine Logan

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