Question about a VFX contract. (client is asking for project files)

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Old 03 March 2013   #1
Question about a VFX contract. (client is asking for project files)

A production company is about ready to give us a VFX contract for a film, and I realized that in their contract they included 1)deliverables to be all project files, and 2)owning all trade secrets.

So far in my career I was never asked to give scene files back to the client. (unless I was given scene files to work on, but that is usually on subcontract work) I consider the project files to be my trade secret that gives my company a competitive edge against other companies. Clients usually ask for the end product that is the final rendered files or videos.

So I asked them for a revision before I signed, or we would have to discuss a totally different price.
I'm guessing they, or the lawyer who wrote the document was over reaching a bit.
Am I wrong to ask for a revision?
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Animusing Productions
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Old 03 March 2013   #2
I say you're very lucky to spot that before you signed it. That gave me goose bumps.
 
Old 03 March 2013   #3
Originally Posted by Panupat: I say you're very lucky to spot that before you signed it. That gave me goose bumps.


Gee the thought that I almost missed it will give me nightmares tonight. :-D
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Animusing Productions
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Old 03 March 2013   #4
Yeah, project files would be a big price increase, or something you could refuse to provide.
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Old 03 March 2013   #5
Usually you charge the cost of the project for the files.
 
Old 03 March 2013   #6
Originally Posted by Dennik: A production company is about ready to give us a VFX contract for a film, and I realized that in their contract they included 1)deliverables to be all project files, and 2)owning all trade secrets.

1) is fairly common (but not standard) IF they are willing to pay for it. Often people try to get it for free. It's up to determining the fee really.

2) Is often required (a re-formulation of it) following 1, because without it you could given them assets that won't even load pulling out the "custom tools" card (which might simply be an encryption scramble of the files), but NOT in the form of all trade secret changing hands.
You can perpetually license them to use the technology required to peruse those assets, and agree on whether they can redistribute it and how (to pass the work on to another service in the future).

2) is often a way for clients not wanting a vendor lock on assets that might be re-used, but it's often phrased and formulated too aggressively. It eventually becomes a vice of form and invalidates the contract if taken to court more times than not. Precedents had it cracked before by how derivative technology can be, and the inevitable violation of licensing you'd incur in passing some of those on, so it always becomes a mess.

You need to figure out if you need to give them anything so they can re-use those assets, whether you're ok with them transmitting on such things in case they pass your assets and work to another service, and how much you want to charge in each case.

Quote: So far in my career I was never asked to give scene files back to the client. (unless I was given scene files to work on, but that is usually on subcontract work) I consider the project files to be my trade secret that gives my company a competitive edge against other companies. Clients usually ask for the end product that is the final rendered files or videos.

That's the default when you provide service off-site. If you think such things truly give you an edge (in my experience unless the tech is considerable they are a small to insignificant edge compared to the personal contribution in craft and skills of the ops) then you'll have to refuse it, or charge them what the loss of that edge you think will be.

Quote: So I asked them for a revision before I signed, or we would have to discuss a totally different price.
I'm guessing they, or the lawyer who wrote the document was over reaching a bit.
Am I wrong to ask for a revision?

You did well. A solid agreement is the first and most important step to a successful professional relationship with clients.
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Old 03 March 2013   #7
May as well hand them the keys to your house.
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Old 03 March 2013   #8
Whenever we have clients asking for the source files, (Which is very rare usually) we basically will charge them a very high price so that it's not worth it for them to get the files. When we do a project, we'll re-use models and other assets that we've developed on previous projects to keep costs down. When a client asks for the source files, we'll calculate how long it would have taken us to do the entire project from scratch without re-using assets or purchasing models from places like Turboquid and then double or triple the price on it.
That way, the price will be so high the client usually backs off and says forget it, it's not worth it. Most of the time the client will want the source files so that they can get someone else to do changes or additions to a project for a cheaper price later on. By handing them over, you essentially eliminate yourself from the equation and any future work on that project.
It's like going up to Coke Cola and saying, "I just purchased this can of coke, can you give me you're recipe as well so that I can make it myself in my basement so I don't have to buy you're product anymore."
 
Old 03 March 2013   #9
Originally Posted by Nizniko: .....It's like going up to Coke Cola and saying, "I just purchased this can of coke, can you give me you're recipe as well so that I can make it myself in my basement so I don't have to buy you're product anymore."


That sums it up perfectly.
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Old 12 December 2013   #10
A word to the wise - I have learned today that many consider "ownership rights" of project files to be different than "possession rights" - as many companies wish to maintain a copy of the files in the event that the contractor dies, has a HDD crash, etc.

Just something to keep in mind.
 
Old 12 December 2013   #11
Nice point ...

Originally Posted by LukeLetellier: .... many companies wish to maintain a copy of the files in the event that the contractor dies, has a HDD crash, etc.....


A way around the "insurance" consideration is to update working files daily with a Lawyer trust drop-box. The ownership of the contents goes to the specified client in the event of etc.

Any contract offered is subject to negotiation up to the point of signing. If a clause is not acceptable then one rules a line through that clause or part or whatever and initials the change.

In contracts each side is after all they can get .... you and them .... no doors need to be slammed.
 
Old 12 December 2013   #12
I don't know why people still try this shit.

Last time someone did that, we gave them the source files for extra cost, they hired an in-house guy to update the animation and after wasting a month they came back to us to fix it having spent three times what it would have cost to just come back to us in the first place.
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Old 12 December 2013   #13
The primary concern of this client is that they want to create a specific look and ensure that they can maintain that look in the future. Six months down the line I might not be available, I might have lost the files in a HDD failure, or I could have died in a car crash - which would mean that they might have to hire someone new to perfectly replicate what I had done, which this person probably couldn't do - meaning that some of the images of their product would be in one style, and the other photos would be in another style. Owning a copy of the project files would prevent this from occurring.

Making things a little more complicated is the fact that these are renderings of a CAD model owned by them; and the CAD model is technically a part of the project files. They own the base object, but I own the shaders, camera setups, and lighting rigs.

Also, it was not mentioned to me that they wanted the scene files until we were halfway through the project. The current contract states that "I would maintain ownership rights to the scene files", which I assumed to also mean possession rights to the project files. And thus we were placed into shades of gray.

So I've offered to sell them possession rights of the project files for 35% of the total, which I felt was fair.
 
Old 12 December 2013   #14
Originally Posted by LukeLetellier: A word to the wise - I have learned today that many consider "ownership rights" of project files to be different than "possession rights" - as many companies wish to maintain a copy of the files in the event that the contractor dies, has a HDD crash, etc.

Just something to keep in mind.

What "many" consider is irrelevant, what the law says about the words in a given context is all that matters.
If they want to buy insurance they should buy insurance, not ask for files when they didn't pay for a copyright transfer but just for the license of use within a given domain of pixels produced.
If they bought the copyright and the means to reasonably reproduce contents then they will have paid for it (to one's satisfaction or not is one's problem) and will get all of the above.

What you sell a client, a service, license to use the final product, the entire copyright to your work, the means to reproduce it and so on is what you agree on in a contract, and what you should charge according to. What people decide to call it is entirely irrelevant and basically it's arguing semantics, when the law admits none of that, which is utterly pointless.

The contract and its applicability as seen by a competent lawyer is all that stands at the end of the day.
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Old 12 December 2013   #15
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