Chain of Title: Why Completing a Film Does Not Equal Owning It
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In film production, completing a film does not automatically grant ownership or unrestricted exploitation rights. This distinction often becomes apparent only at a later stage, typically when a distributor, platform, or investor requests documentary proof that the producer holds the rights necessary to commercially exploit the film.
At that stage, the issue is no longer about the film’s quality or market potential, but whether the producer can demonstrate a clear and complete chain of title. In practice, chain of title determines whether a film can be legally distributed, licensed, and monetized without exposure to third-party claims. A completed film without a clear chain of title may exist as a creative work, but it remains commercially constrained.
This update outlines the concept of chain of title, how it is established in film production, and why deficiencies in chain of title present significant legal and commercial risks under Indonesian copyright law.
What Is Chain of Title?
Chain of title refers to the documented record of how economic rights in each component of a film are transferred from their original creators to the producer. It serves as legal proof that the producer has the authority to use, exploit, and monetize the film as an integrated audiovisual work.
In the context of film production, a producer must demonstrate that rights relating to the underlying story or screenplay, performances, music, and any third-party materials incorporated into the film have been validly acquired. These transfers must be clearly documented, consistent, and traceable. Without such documentation, the producer’s control over the film remains legally vulnerable.
How Rights Are Acquired by the Producer
Chain of title is not created through a single agreement. It is established through a series of contracts governing how economic rights in individual elements of the film are transferred or granted to the producer.
These rights may be acquired through different legal mechanisms, including:
- Work-for-hire arrangements, where economic rights vest directly in the producer, subject to statutory requirements;
- Assignments, by which creators transfer ownership of economic rights to the producer; or
- Licenses, which permit the use of copyrighted material without transferring ownership.
Each mechanism is legally valid, provided that the scope of rights, territory, media, and duration are aligned with the intended exploitation of the film. A clear chain of title exists only where all necessary rights have been acquired in a manner that supports the producer’s full commercial objectives.
Risks Arising from an Incomplete Chain of Title
A film may still be completed and even released with an incomplete chain of title. However, the absence of properly transferred rights exposes the producer to material legal and commercial risks. Where rights have not been validly transferred, original creators or rights holders may retain legal control over their contributions, including the ability to object to use, restrict exploitation, or demand renegotiation of commercial terms. In practice, such issues often surface only once the film begins generating revenue
Claims for additional compensation, profit participation, or revised contractual terms frequently arise when a film performs well commercially or gains international exposure. At that point, unresolved rights issues can significantly disrupt distribution, licensing, and monetization efforts.
The commercial risk is compounded by the fact that a film’s success is difficult to predict. A project initially perceived as modest may later gain traction through awards, secondary markets, or platform distribution. Without a clear chain of title, unexpected success can quickly translate into legal disputes and loss of control.
Common Causes of Chain of Title Issues
Chain of title issues do not always result from the absence of agreements. More commonly, they arise from agreements that fail to transfer rights clearly or comprehensively.
Typical issues include contracts that:
- Do not clearly define the scope of rights transferred;
- Omit certain media, territories, or exploitation periods;
- Remain silent on future uses, such as sequels, remakes, or derivative works; or
- Assume work-for-hire status without meeting the formal legal requirements.
In many cases, producers assume ownership based on funding or production control. Under copyright law, however, economic rights are determined strictly by what is expressly agreed in writing. Payment alone does not equate to ownership.
Chain of Title as a Commercial Asset
A properly structured chain of title does more than mitigate legal risk. It enhances the commercial value of a film. With a clear chain of title, producers can pursue distribution, licensing, and secondary exploitation with greater certainty. Future development, such as sequels, adaptations, or spin-offs, can be undertaken without reopening foundational rights negotiations.
From a business perspective, chain of title transforms a film from a standalone project into a scalable intellectual property asset, preserving leverage and enabling long-term value creation.
Chain of Title Under Indonesian Copyright Law
Under Article 1 (1) of Law No. 28 of 2014 on Copyright (“Copyright Law”), copyright protection arises automatically upon the creation of a work. Economic rights initially vest in the individual creator of each copyrighted component.
A film, however, is not a single-origin work. It is a composite audiovisual creation built upon multiple underlying copyrighted works, including literary works, musical compositions, and performances. While the completed film may give rise to its own copyright, that copyright is layered on top of the rights in each underlying component.
Indonesian copyright law adopts a clear principle: economic rights remain with the creator unless expressly transferred in writing. 1 Any transfer, whether by work-for-hire, assignment, or license, applies only within the agreed scope, territory, media, and duration. Rights that are not expressly transferred remain with the original rights holder. 2
Accordingly, a producer’s ability to exploit a film is limited to the rights that have been properly cleared. Funding or coordinating production does not, by itself, confer comprehensive exploitation rights.
Disclaimer:
This client update is the property of ARMA Law and intended for providing general information and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. ARMA Law has no intention to provide a specific legal advice with regard to this client update.
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