Acquisition of Script

The first and most important step in the production of a film is acquiring a good script. The script is the visualization of the film on paper. This process begins with the producer or studio (in case of a Hollywood film) hiring the services of a professional scriptwriter. In the event that the script is based on a book/novel, the necessary permission of the author/publisher of such book/novel will be required. The script may then be converted to a screenplay.

In India, film scripts are readily and cheaply available. Normally, the producer purchases a number of scripts at a nominal price, irrespective of whether he actually uses the script or not. Sometimes, the producer or the director may himself author the script. After deciding on the final script, the producer is required to register the script with the Writers Association of India. Due to lack of proper business and legal practices, Bollywood players are relatively unaware of the importance of protecting intellectual property and the weight it holds. Unlike Hollywood, the process of verifying and clearing scripts and entering into appropriate agreements to protect the interest of the producer as well as the writer is relatively devoid in Bollywood. However, in the recent past, with a slow, but steady awareness of corporatization and globalization, established film production and financing houses have started initiating the process of evaluating a story's commercial viability at the box office through a series of meetings supported by adequate documentation.

In Hollywood, for the acquisition of the screenplay or the underlying property, (such as a book, play, life story, treatment or idea) ("Literary Rights") a production company usually enters into an option agreement with the author or owner of the Literary Rights.

(a) Option Agreement

The Literary Rights may be either acquired by an outright purchase or by way of the option agreement. For a relatively small payment the production company acquires the right for a specified period of time to purchase the Literary Rights to the owner's property. Option agreements serve a useful purpose, particularly for the independent producer or production company, since during the period for which the work is tied up, the production company can look around for finance, stars, and directors and assess the market. The purchase price is generally 10% of the value of the Literary Rights. Upon the exercise of the option, the production company will pay the full price for the acquisition of the Literary Rights.

(b) Acquisition Agreement

Typically, the agreement for acquisition of Literary Rights constitutes an appendix to the option agreement. Upon the exercise of the option, the agreement for acquisition of Literary Rights becomes a fully enforceable agreement.

(c) Chain of Titles

Prior to entering into any agreement, the script is first reviewed and "cleared" from a legal and factual viewpoint ("chain of titles") and involves commissioning a copyright search to determine whether there has been an infringement of any existing copyright. A further clearance would be required for the projected title of the film. There are serious concerns for the recipients in accepting unsolicited (and even solicited) Literary Rights, in particular regarding the originality and ownership of the Literary Rights, as well as regarding potential copying claims.