January 11, 2024
·

How to Navigate Reversion Rights: A Guide for Creators + Free Legal Template

Tom Waddick
Free ebook
Download Now
Free Template
IP Grant Agreement
Download Now

Whether you are a producer, screenwriter, filmmaker, or other creative professional, it’s imperative to your success that you protect your creative work while expanding its reach into the world. One of the best ways to do this, legally-speaking, is with reversion rights. 

But what are reversion rights, why are they vital to creators, and how can you utilize them when drafting your next entertainment contract? In this post, we will cover all things reversion rights to help you better understand how to retain ownership and control of your creative work.

Download our free grant with reversion clause template

At Wrapbook, we believe in empowering creators, and that's why we're excited to offer a free grant with reversion clause template. This invaluable resource is designed to assist creators in navigating the often complex terrain of reversion rights. You can also follow along with it as we explain reversion rights.

Free Resource

Intellectual Property Grant Agreement Template

Download Now

What are reversion rights?

Reversion rights act as a contractual mechanism. They dictate when and how the rights to use, adapt, and publish creative work revert back to their original creator.

Imagine you've poured your creative genius into a comic book, and a filmmaker wants to adapt it into a movie or TV show. Usually, you would enter into an option/purchase deal wherein you grant the filmmaker the right to use and develop your creative material so they can produce an adaptation of the comic book.

If the filmmaker is unable to produce a movie or TV show based on your comic book, however, you would want to reclaim all of your rights to the work. That’s where reversion rights come in.

Reversion rights are a safety net. They make sure the rights you grant to someone to use and adapt your creative work automatically return to you under specific conditions. 

Conditions for the reversion of rights might include:

  • Failure of the filmmaker to raise adequate capital within a set period of time 
  • Failure to produce and distribute the movie or TV show within a set number of years
  • Failure to produce successive iterations of the material over a period of time (think new TV seasons, movie sequels, or remakes)

No matter what conditions you set forth, reversion rights are a crucial component of any grant of rights agreement.

Why are reversion rights important in entertainment contracts?

In entertainment contracts, reversion rights play a pivotal role. Consider the producer who’s optioned a screenplay. If the producer fails to raise sufficient capital within a set timeframe or is unable to produce and distribute a movie or TV show, reversion rights might kick in.  

By placing the onus on the licensee (i.e. the producer, production company, and/or studio) to make use of the creative material within a set period of time, reversion rights help spur development and prevent projects from stalling.

Reversion clauses are also valuable to creators. Without reversion rights, creators might find themselves at a disadvantage. Unable to reclaim the rights to their work, they could potentially lose out on future opportunities.

With carefully considered reversion clauses built into these contracts, creatives can rest easy knowing their work is protected. Reversion rights help guarantee that creators will be able to use their own work as they see fit.

What are the differences between reversion and termination rights?

Sometimes a basic grant of rights also includes a termination clause. Termination clauses are similar to reversion rights in that they allow a creator to regain the rights to their material. However, they have key structural differences. It's crucial to understand the nuances between reversion and termination rights. 

Reversion rights automatically return to the creator based on predefined conditions. Termination rights require the creator to choose to initiate a termination. This results in the end of the contractual relationship.

Termination usually takes the form of a written notification to terminate. Think of a termination clause like an escape hatch: it allows a creator to exit a deal they no longer agree with and regain their creative freedom if and when they feel that their needs are no longer being met.

In the US, creators automatically have termination rights pursuant to a few key conditions. Under copyright law, the right to terminate a grant of rights is effective either:

  • 35 years after the date of publication
  • 40 years after the date the rights were granted

Importantly, termination must be made within a five-year window of the effective date. 

What are the benefits of reversion rights for producers?

Reversion rights are an indispensable component of any grant of rights agreement. Reversion rights grant ownership over creative work to a producer for a specified timeframe. Reversion clauses place a substantial obligation on the licensee, guaranteeing that the rights granted are actively used.

Reversion rights also offer creators the chance to regain control over their work if it remains unexploited or underutilized.

Beyond control, reversion rights open doors to additional opportunities and, importantly, financial benefits by allowing creators to enter into new licensing deals should one fail.

How to use reversion rights in your next grant of rights agreement

Negotiating contracts can be daunting, but here are some tips to ensure you have mutually beneficial reversion rights built into your next contract.

Define clear conditions

First, make sure that you clearly outline the conditions that will trigger a reversion of rights when you draft your grant agreement. One of the most common conditions is to set a term of license. If the producer does not produce and publish an adaptation of the material within a set number of years, the rights revert back to the creator. 

That’s not to say that this is the only potential condition, however. More experienced creators may have the leverage to secure more favorable deals. 

For example, a grant of rights could be conditioned on successive publication of new material, like sequels and remakes, over a set period of time. Failure by the licensee to keep up the property would trigger the reversion clause, and rights would revert back to the original creator.

This is infamously why Roger Corman was hired to produce a version of the Fantastic Four comic book that was never released. It was a successful attempt to keep the rights from reverting through a loophole.

How to Navigate Reversion Rights - Wrapbook - Fantastic Four
Behold, the dangers of not paying close attention to your reversion rights. SOURCE

Our free template offers a great place to begin drafting your own grant of rights agreement with robust reversion clauses. If someone else drafts your grant of rights agreement, make sure that you read it fully and carefully.

Seek legal advice 

As with anything about entertainment contracts and dealmaking, it’s vital that you consult with legal professionals who specialize in entertainment law to help protect your rights.

If you have the opportunity to license creative material, you should first hire an attorney who is well versed in entertainment law. When hiring your lawyer, make sure that contract negotiation, with an eye to reversion rights, are an integral part of your attorney-client retainer agreement.

Wrapping up

Understanding and securing reversion rights is a crucial aspect of navigating the creative landscape. Whether you're a seasoned creator or just starting, having a grasp of these rights will help make sure that your projects don’t get stuck in creative limbo.

Download our free legal template to begin drafting your own basic grant of rights with reversion clauses. Remember, reversion rights are one of the most valuable ways to orient your work and yourself toward a fruitful creative future.

Free Resource

Intellectual Property Grant Agreement Template

Download Now

Disclaimer

At Wrapbook, we pride ourselves on providing outstanding free resources to producers and their crews, but this post is for informational purposes only as of the date above. The content on our website is not intended to provide and should not be relied on for legal, accounting, or tax advice.  You should consult with your own legal, accounting, or tax advisors to determine how this general information may apply to your specific circumstances.

About the author
Tom Waddick

Tom is a filmmaker, producer, and marketing specialist based in Los Angeles.

Stay In The Know

Sign up for the Wrapbook newsletter where we share industry news along with must-know guides for producers.