October 8, 1998
The US Congress is taking final steps to secure the full passage of legislation aimed at protecting the economic rights of motion picture directors, performers and writers. The legislation, Section 4001 of the Digital Millennium Copyright Act (also referred to as the World Intellectual Properties Organization (WIPO) legislation), was championed by the Directors Guild of America, the Screen Actors Guild and the Writers Guild of America. It ensures that when films are transferred to new owners or distributors, directors, performers and writers are legally guaranteed payment of residuals as provided by their collectively bargained agreements.
"The passage of the DMCA ensures that residuals will continue to be paid to our members as our product moves through the marketplace," DGA President Jack Shea said. "We estimate that without this legislation, DGA members have been losing tens of millions of dollars a year in residual payments. Having legal protection of their residual payments when a film changes hands is a tremendous boost to their economic security."
"Screen Actors Guild is extremely grateful to the members of the House and Senate who worked with us to include the residual/transfer amendment in this legislation, thereby giving SAG and our sister unions - the DGA and WGA - additional tools to protect our members' economic interests.," SAG President Richard Masur said. "We are delighted at the passage of this legislation, which puts the United States in conformance with the recently passed WIPO treaty. This is critically important for the protection of performers in audio media, and we applaud the efforts of our sister union, AFTRA. SAG looks forward to continuing our efforts to secure the same kind of international and domestic protections for audio visual performers in Geneva and Washington, respectively."
"We join with our colleagues at the DGA and SAG in expressing our appreciation to the members of the House and Senate for their support," said Daniel Petrie, Jr., President of the WGA, west. "I want to express our thanks as well to our sister Guilds for their hard work to pass this legislation."
Section 4001 states that the party to whom the copyright ownership is transferred (usually a distributor) must assume the obligation to make residual payments set forth in the applicable collective bargaining agreement if it "knows or has reason to know at the time of the transfer that such collective bargaining agreement was or will be applicable to the motion picture," or if "in the event of a court order confirming an arbitration award against the transferor [the previous copyright holder] under the collective bargaining agreement, the transferor does not have the financial ability to satisfy the award within ninety days of the issuance of such order."
The section also states that if the transferor fails to notify the transferee of applicable collective bargaining obligations (i.e., residual payments) before the copyright ownership is transferred, the transferor shall be liable to the transferee for any damages suffered by the transferee due to the failure to notify. In addition, the section calls for any disputes concerning application of this law to be determined in US district court.
After final Congressional passage, the Digital Millennium Copyright Act will be sent to President Clinton to be signed into law.