Northern Alliance - BFI

(b) VAT is paid on awards and provisions need to be included to ensure
that the UK Film Council acquires a share of copyright, a credit and is
entitled to recoup and share in net profits from short films. Note: the
recoupment provisions on short films have been softened so that the
UK Film Council only seeks to recoup half its investment;
Exploitation/distribution of short films may not be the primary reason for
making the films, but there are still some distribution/exhibition
opportunities and sales available. In order to maximise those opportunities
the films have to be fully cleared, and the UK Film Council contracting
process provides for this.
Role of the UK Film Council's Business Affairs Department
The fact that UK Film Council takes a share of copyright in the films puts it at risk
of legal action in the event that a filmmaker infringes third party copyright or fails
to fully clear the film. Therefore, the UK Film Council has provided all short
filmmakers (whether directly, on Completion Fund and Cinema Extreme films, or
indirectly through its partners on Digital Shorts) with template clearance
agreements for cast and crew, including director, producer, music composer and
writer. This is to ensure that good standard documentation is used and that all
short films produced through UK Film Council funding are fully cleared. This
procedure was adopted in response to many problems in the early years of the
shorts programmes, where films were not properly cleared and could not be
licensed for use, or where the filmmakers got into disagreements with each other
or with the Digital Shorts partner. The use of music is also subject to stringent
rules, because experience has shown that obtaining music rights can be
prohibitively expensive for short films, as well as being time-consuming to clear.
The provision of the clearance pack has therefore reduced the number of
problems brought to Lifesize Pictures and the UK Film Council's Business Affairs
department. Nevertheless, issues continue to arise such as where the Business
Affairs team discover late into the process that a filmmaker has used, and failed
to clear, another party‟s copyright – for example, based the script on a short story
or poem, or filmed someone‟s trademark or artwork. Often these issues are not
spotted at the outset, and Lifesize or the Business Affairs team have to intervene.
Also, the UK Film Council‟s partners/agents may have limited knowledge of legal
and compliance issues, so they naturally seek advice from Lifesize and, where
Lifesize cannot help, from the UK Film Council's Business Affairs department. In
general, agents/partners do try to field the majority of queries.
The Business Affairs department, together with Lifesize or Mayavision as
appropriate, are directly involved in training and advising short filmmakers on the
business side of production for the Completion Fund and Cinema Extreme. In
Page 97