The Significance of NDAs in Video Production
Non-Disclosure Agreements (NDAs) are an essential part of the video production business. Every project we create, from corporate videos to short films, client videos to music videos, always start with a well outlined agreement on how the final product is used. So much of the pre-production time goes into crafting the perfect contract that covers the scope-of-work as well as both parties’ protected resources. While it can be frustrating during the contract process, it’s crucial to nail down the details before you even begin the project.
The agreement especially formalizes intellectual property (IP) rights, which is becoming a more prevalent issue in the age of content creation . Generally, any material created for hire, or work made under a contract, becomes the property of the company that hired the contracted creator. This means, tapping into that contract is critical before you post a behind the scenes image of the production from your personal social media account. If you have access to confidential company projects, they may request that you not share anything online in order to protect their clients. The document also protects the creator, so should any issues arise, they are able to dispute the claims made under the contract and contest any legal matters.
What To Include in a Video Production NDA
A properly drafted Non-Disclosure Agreement specific to video production should include the following essential elements:
Definition of Confidential Information: This section defines what information will be deemed confidential and not subject to disclosure. Without this definition, it is difficult to determine which information is protected. For example, a lawyer or accountant has a duty of confidentiality to their clients, however this does not mean that every communication with every client is protected under a non-disclosure agreement. If a production company obtains this information during the course of production, it may be protected but not all information would be. Oftentimes, these agreements will just define information as "confidential" and then list the categories of information in a specific and exhaustive manner at the end of the document.
Permitted Use: The purpose of including a permitted use clause is to restrict the use to which the receiving party may put confidential information. Just because the information is designated as confidential does not mean it cannot be used in some way, however it should be limited as to the purpose for use in a non-disclosure agreement.
Obligations of the Receiving Party: The obligations of the receiving party typically include prohibiting the disclosure of the confidential information for a specific period of time, setting forth the requirement that the information be returned upon request, and/or requiring the destruction of the information.
Term: A term signifies how long the agreement shall last. Most non-disclosure agreements currently being utilized in the business world are no longer using a specific date but defining the term as "for so long as the information remains confidential" or "for so long as the information was confidential." Specifying a specific term may be acceptable in the video production industry as people often believe that the duration of a production is finite, however, it is better practice to leave it open-ended and to limit the use instead of the term if necessary.
Common Reasons For NDAs in Video Production
Common Scenarios Requiring Non-Disclosure Agreements in Video Production
By their very nature, video production is a highly collaborative industry and often requires many professionals and creatives to work together to realize a single project. Movie and television productions commonly have dozens or even hundreds of people working behind the scenes to make the project a success. As a result, there are many scenarios in the video industry that require NDAs to be executed.
Freelancers
Freelancers are the backbone of the video production industry. Whether used to fill in during high-demand periods or for specialized skills, freelancers are major contributors to modern video production. However, because most freelancers operate as independent contractors, they frequently do not work under the same corporate umbrella as the company that hires them. This can lead to a number of legal disputes if NDAs are not properly used with freelancers. For example, a freelancer who creates an original work of authorship may have certain intellectual property rights for that work even if it is created on a work-for-hire basis. This means that the freelancer could have economic control over the multimedia content it created unless assignment is obtained, which is nearly always done through an NDA. For example, in 2016, Elisa Kreisinger settled her lawsuit against HBO for $200,000 over ownership disputes for a trailer she created that mixed footage from Hormones: Past, Present, & Future.
Contingent Workers
Similar to a freelancer, a contingent worker is also considered an independent contractor. However, there are some differences between freelancers and contingent workers. In general, contingent workers are engaged by the company on an ongoing basis. This means that a contingent worker may be an independent contractor kept on retainer by a company. This could mean sporadic, ad hoc work or it could mean something more formal, such as a consulting firm. In either case, if a company desires to keep the relationship confidential, it should be protected by an NDA.
Pitches
Pitches are another very common scenario that requires the use of NDAs. For teams or individuals pitching a multimedia project to producing studios or executives, an NDA is frequently required in order to not be considered a work-for-hire or joint work. This is also true if a company proposes a multimedia project to a third party.
Video Production NDAs and the Law
When dealing with sensitive creative content, legal safeguards are essential, and non-disclosure agreements are no exception. An NDA is legally enforceable in many jurisdictions as long as it meets basic criteria. In the context of video production, the NDA needs to ensure protection of your intellectual property and especially any original content generated during the filming process. The legal overview of the NDA will remain the same regardless of the approach chosen: signed NDA, clickwrap agreement, or simply an informal understanding.
While the graphic design and video production industries often tend toward a less formal business culture, legal considerations should always be top of mind when drafting NDAs or any other binding contracts. Each jurisdiction has specific requirements for enforceability, but there are some general guidelines that will serve you well. In the interest of guarding content against escalation of unauthorized use, NDAs for video production should specify a termination date, ideally no longer than one year from signing. This gives a deadline for the protection, after which time it will be exceedingly difficult to enforce or even track unauthorized use of your material. In many jurisdictions, terms over this duration are difficult to enforce.
Creating a Video Production NDA
To draft an effective NDA for video production, first ensure that you’re familiar with the particular terms that pertain to the industry. For example, if you’re a producer, you might want the NDA to cover b-roll, scripts, cast notes, and audition tapes. If you’re providing grip or lighting equipment, then you may want to cover technical specifications and product pricing. The NDA should be modified appropriately for the purpose of disclosure.
Regardless of whether you’re on the production side or the equipment supplier side, below is a step-by-step process for drafting an NDA that protects your rights.
Step 1 – Commence the NDA by identifying yourself, your company, the other party, and any affiliates of either party that will have access to the Confidential Information.
The next step is to define "Confidential Information." For those using a generic NDA from the Internet, this could lead to dispute down the line as to exactly what was considered confidential. This is one of the reasons why I believe in working with an attorney to provide a customized NDA for a specific deal. The NDA can be drafted to define a finite list of confidential information specific to the production or industry.
Custom NDAs should always specify how information is distributed and how it’s permitted to be disseminated. In the case of video production, you should specify whether you’re entrusting video data to hard drives, USBs, and/or digital transfers, and also whether you’re releasing DVD copies of the finished product. If you’ve entrusted an actor with a casting tape of your video, he or she should not be permitted to post it online without permission.
Going further, you should decide whether you’re going to permit the relevant information to be shared with third parties for contract or business purposes. Also, does it matter if contractors share your information with people or businesses with whom they also share a contract? Can they share it internally with executives while also remaining free to share the information with other independent companies?
Step 3 – Determining Liability
Liability is one of the messiest areas of NDAs . For example, you may find that you’re permitting contractors to expend extra effort creatively on your shoot, but then one of your contractors permits some of your footage to be leaked to the press. You can file a lawsuit, but the question is: which contractor do you sue? Unless you have all your ducks in a row and have made your NDA’s liability provisions crystal clear, this situation can be quite a headache.
Fortunately, you can specify who is liable for breaches of confidentiality. For example, back to steps one and two, perhaps you specify that Mr. X is the only person working on the production who can legally share your confidential information with anyone else. Therefore, only he is liable for a breach. Or perhaps you make each contractor equally liable for a breach. That all depends on how much you trust your contractors, and whether you want to receive damages from all of them if there’s a confidentiality breach.
Step 4 – Specify the Duration of the Contract
Next, you’ll want to specify the duration of the contract. Ideally, you’ll do so by striking a balance between how long you’d like the agreement to last and how much damage some of your Confidential Information may begin to do if unlawfully redistributed after a given period of time. You’ll also need to think about how the duration you specify corresponds with the length of the project and whether you want the NDA to last beyond the completion of a particular project.
Step 5 – Specifying Exceptions to the Term
Lastly, it’s appropriate to note exceptions to the term of the contract. For example, if you were a video production company that produced a long-running episodic series, certain material from the series may need to be shared with your distributors, which could also include actors. You can specify that this information is released to your distributors or contractors who need it in their positions and/or that share the same interest in the information, you can state that distribution is permitted during and beyond the term of the contract.
How To Enforce a Video Production NDA
The enforcement of a video production NDA following a breach is often the first step in preserving mutual understandings in the video creation process. A Non-Disclosure Agreement is essentially a contract for the protection of all parties from the release and subsequent use of confidential information. To that end, the enforceability of a video production NDA hinges upon its ability to satisfy the general requirements of a binding contract in California. Namely, these requirements consist of:
- Two or more parties;
- A clearly defined subject matter;
- A valid offer;
- A clear acceptance of the offer;
- A consideration element.
Video production NDAs are commonly signed by shareholders, directors, officers, employees, or vendors of film companies. Breach of an NDA may result in significant financial damages, particularly if the video production company is handling highly-sensitive material on behalf of a large organization. In any event, if diverse parties are involved, the breach of privacy extends far beyond a single entity.
The remedies available to the aggrieved party following a breach of an NDA depend on the severity of the violation. In most circumstances, the most common remedy is equitable relief in the form of a temporary restraining order (TRO). Such remedies are granted under Cal. Civ. Pro. Code § 526, which provides:
"The restraint required may be given in the following cases, and in all other cases where it is proper: 1. When it appears by the affidavit of the applicant that the commission or continuance of the act complained of during the litigation would produce great or irreparable injury to the applicant…"
When issued, a TRO is a preliminary injunction given under Cal. Civ. Pro. Code § 525 to a plaintiff based on a showing of likelihood of success on the merits of the case. It is then followed by the issuance of a prevailing preliminary injunction to be enforced until a final verdict is reached. Cal. Civ. Pro. Code § 527. As such, the NDA non-breaching party is temporarily relieved from fear of further harm.
Problems With Video Production NDAs
Both distribution and filming of a video require that certain confidential information associated with the project be protected. The NDA is essential in the legal process of protecting this information. However, there are some mistakes that are commonly made that weaken the non-disclosure agreement during the execution and use process.
Not using an attorney
Every video production company should have an attorney that specializes in the production industry. The most important reason for having an attorney review an NDA is to determine whether or not it is valid in the country before being presented to witnesses or actors. Such an attorney will be able to determine how to word the NDA to conform to all the laws of a country. It is wise to consider in advance what state, city, or county will be used to adjudicate a dispute under the agreement.
Not customizing the NDA for a particular production
No two video productions are ever the same. The conditions involved in protecting trade secrets might vary from one production to the next. For example, a production may be filming at a location that is not open to the general public and therefore would need a broader scope to address those concerns. A generic NDA is not wise. In order to display professionalism and an understanding of the law , a custom NDA that addresses the details of each specific video production is needed. A generic NDA for production and post-production purposes is not sufficient for protecting non-disclosed information.
Having an NDA without legal remedies
A poorly drafted NDA might contain zero legal recourse in case of a breach. This means that the NDA will do nothing to protect the harmed party in case of a theft of information. A remedy clause is not only essential as a deterrent to breach of the NDA, but it also protects the producer and others that might be involved in the production. The NDA must list the parties and the rights of the harmed parties because they must at least know that there are remedies available to them in case of a breach. Once the NDA has been breached, it can become very difficult if not impossible for the producer or owner of the information to recover any damages that have occurred.
One or two parties setting the NDA terms
For an NDA to have a significant impact, it must be drafted by an independent third party. It is important to hire an experienced attorney to draft an NDA for a particular production because such an attorney will be able to draft an NDA that protects the interests of all parties. Therefore, it is advisable to negotiate with all parties involved in the production so that the NDA will protect each of them in case of a breach.
Absence of a time frame
If a non-disclosure agreement is missing a time frame, then the agreement does not adequately protect the information or the parties. The NDA may be binding until the information is disclosed, but there is no time limit for how long the agreement will last. If the agreement has no time frame, it neither dissolves at a certain period nor does it extend to future dealings.