LEGAL EASE: “Short Form Option” vs. “Short Form Assignment”
Q: I was recently presented with an option agreement. At the end of the agreement there are two more short agreements. One is a “Short Form Option.” The other is a “Short Form Assignment.” Why am I signing two options? And why would I agree to sign a short assignment agreement which says they own all the rights when they haven’t exercised the option yet?
A: Option Agreements are like rap stars. They usually travel with a posse, albeit their posses are much shorter than the posses accompanying rap stars. Rap stars hang with posses for two purposes: they want protection and they want to put the world on notice that they’ve arrived. The Short Form posses that hang with Option Agreements accomplish a similar goal: they are used to protect the optioning party due to the fact that they put the world on notice.
We’ll start with the Short Form Option. This little document generally states in clear and simple terms that the writer has granted an option to the optioning party. It probably does not state the length of the option or any financial terms. Instead, it likely only states that the terms of the option are more fully described in the underlying agreement.
The party optioning your work wants this document so that it can record it with the Copyright Office after you have entered into your agreement. By recording the short form, it will put the world on notice that it has acquired some limited rights to your work. This protects the optioning party if you are as shady as the Hamburglar and try to option your work to a different party during the option period. If that “different” party is on the ball, it would first search online copyright records before optioning your work. It would see that there is an existing option and would know to steer clear
of optioning the script.
The Short Form Assignment performs basically the same function. However, I can understand how it’s a little off-putting because it appears that you’re signing away all your rights when you think you’re only entering into an option agreement. If you look closely at your agreement, there should be language referencing the Short Form Assignment and stating that the assignment does not take effect unless and until the purchase price is paid. It should also state that it cannot be recorded until that time. If your agreement does not state that, then you should only sign the Short Form Assignment if and when the option is exercised.
Again, if the option is exercised (making the optioning party the new owner of the script), that Short Form Assignment will be recorded with the Copyright Office. In this case, it will tell the world that the optioning party, not you, now owns all rights in the script. This is especially important if your script was already subject to a copyright registration
because that registration would list you as the owner. After the assignment is recorded, the world will know that the owner has changed.
There’s one last reason producers and other optioning parties want to record these documents. If the project ends up with a studio or a production company that’s a guild signatory, the guilds will require that such transfer documents are recorded as part of their review and approval of the chain of title of the movie.
Now that you understand the reasoning behind these little documents, there’s no need to be afraid of them (I wish I could say the same about rappers’ posses).
© 2008 Greenberg Glusker Fields Claman & Machtinger LLP ("Greenberg Glusker"). All rights reserved. This Blog contains information of a general nature that is not intended to be legal advice and should not beconsidered or relied on as legal advice. Any reader of this Blog who has legal matters involving information addressed in this Blog should consult with an experienced entertainment attorney. This Blog does not create an attorney-client relationship with any reader of this Blog. Greenberg Glusker does not represent or warrant that this Blog contains information that is true or accurate in all respects or that is the mostcurrent or complete information on the subject matter covered. Matt Galsor and Jesse Saivar are attorneys in the entertainment transactional department of Greenberg Glusker Fields Claman & Machtinger LLP.