Arbitration Involving Intellectual Property Rights in Film Co-Production

1. Introduction

Film co-production agreements are particularly well suited to arbitration because they combine contractual, intellectual-property, financing, distribution, and exploitation issues, often involving parties from several jurisdictions.

A typical co-production arrangement may involve:

• two or more producers contributing capital;
• acquisition or assignment of underlying literary or musical rights;
• screenplay and adaptation rights;
• copyright in the completed cinematograph film;
• music and soundtrack rights;
• performers' and directors' contractual rights;
• territorial distribution rights;
• remake, sequel and dubbing rights;
• OTT and streaming rights;
• merchandising and ancillary rights;
• revenue-sharing arrangements; and
• licensing to broadcasters and digital platforms.

WIPO specifically identifies film co-production agreements, copyright agreements, financing, distribution, licensing and music-synchronisation arrangements as disputes suitable for its film-and-media arbitration framework. A reported WIPO expedited arbitration actually concerned a film co-production agreement between producers from Mexico, Portugal and Spain.

The central legal question, particularly in India, is:

Can an arbitral tribunal determine disputes concerning intellectual-property rights arising out of a film co-production agreement?

The answer is nuanced. Contractual disputes concerning the exploitation, licensing, assignment, payment, distribution or use of IP rights are generally much more amenable to arbitration than disputes seeking to determine or invalidate an IP right against the world at large.

2. Nature of IP Disputes in Film Co-Production

A co-production agreement can generate several distinct categories of disputes.

A. Ownership disputes

For example:

• Producer A claims 60% copyright.
• Producer B claims that its contribution entitled it to 50%.
• One producer alleges that copyright was never properly assigned.

B. Licensing disputes

One producer may grant:

• OTT rights;
• satellite rights;
• theatrical rights;
• remake rights;
• foreign distribution rights;

without obtaining the other co-producer's consent.

C. Unauthorized exploitation

A co-producer may exploit the film:

• outside the agreed territory;
• in additional languages;
• on platforms not contemplated by the contract;
• through streaming;
• through NFTs or other digital exploitation;
• through sequels or spin-offs.

D. Copyright-credit disputes

Disputes may arise over:

• authorship;
• producer credits;
• director credits;
• screenplay credits;
• music credits;
• moral rights.

E. Revenue disputes

These include:

• box-office accounting;
• OTT licence fees;
• minimum guarantees;
• distribution commissions;
• overseas revenues;
• music royalties.

F. Failure to complete the film

A co-producer may allege that another party:

• failed to contribute finance;
• failed to deliver production materials;
• abandoned production;
• improperly terminated the agreement.

These disputes are often contractual rather than pure IP disputes, making arbitration particularly appropriate.

3. Applicable Indian Legal Framework

Arbitration and Conciliation Act, 1996

The principal provisions include:

Section 7

Defines an arbitration agreement.

The co-production agreement should contain a sufficiently clear arbitration clause covering disputes arising out of or relating to the agreement, including IP ownership, licensing, exploitation and termination disputes.

Section 8

Requires referral to arbitration where the dispute is covered by a valid arbitration agreement, subject to the statutory requirements.

Section 11

Provides for appointment of arbitrators.

Section 16

Recognises the tribunal's competence to rule on its own jurisdiction and incorporates the doctrine of separability.

Section 17

Allows interim measures by the arbitral tribunal.

This can be particularly useful in film disputes involving threatened exploitation of disputed content.

Section 34

Permits limited judicial interference with an arbitral award.

4. Copyright Act, 1957

The Copyright Act is fundamental to film co-production disputes.

Section 13 recognises copyright in cinematograph films and other protected works.

Section 17 deals with the first ownership of copyright, subject to its statutory provisions.

Sections 18 and 19 concern assignment.

Section 30 deals with licensing.

Section 51 concerns infringement.

Section 55 provides civil remedies.

Section 62 contains the jurisdictional provision for copyright infringement suits.

The arbitration question therefore requires a distinction between:

(a) the underlying statutory IP right, and

(b) contractual rights concerning that IP.

That distinction is crucial.

5. The Rights-in-Rem / Rights-in-Personam Distinction

The foundational distinction comes from Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd.

The Supreme Court distinguished:

• rights in rem — rights enforceable against the world generally; and
• rights in personam — rights arising between particular parties.

Contractual disputes concerning exploitation of IP are normally closer to the second category.

For example:

Producer A grants Producer B exclusive Indian streaming rights.

A dispute about whether B has exceeded those contractual rights is fundamentally a dispute between A and B.

By contrast:

A party asks a tribunal to declare that a registered IP right is invalid against everyone.

That is substantially different and raises arbitrability concerns.

This distinction remains central to Indian arbitration jurisprudence.

6. Leading Case Laws

Case 1 — Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd., (2011) 5 SCC 532

Principle

This is the starting point for analysing arbitrability in India.

The Supreme Court explained that disputes concerning rights in rem are ordinarily unsuitable for arbitration, while disputes concerning subordinate rights in personam arising from rights in rem may be arbitrable.

Application to film co-production

Suppose a producer owns copyright in a film and licenses certain rights to a co-producer.

A dispute about:

• whether the licence was breached;
• whether the co-producer exceeded the licence;
• whether royalties are payable;

is substantially contractual.

It can therefore be distinguished from a proceeding seeking a declaration concerning the validity of copyright itself.

Importance

Booz Allen prevents the simplistic proposition that:

"All copyright disputes are non-arbitrable."

The correct question is what relief and what legal right are actually being adjudicated?

7. Eros International Media Ltd. v. Telemax Links India Pvt. Ltd., Bombay High Court, 2016

This is one of the most directly relevant Indian authorities for film-related IP arbitration.

Eros, a major film producer/distributor, had entered into a term sheet concerning exploitation and distribution of copyright-protected film content.

The term sheet contained an arbitration clause.

A copyright dispute subsequently arose and Eros instituted court proceedings alleging infringement. Telemax sought reference to arbitration under Section 8.

The Bombay High Court held, in substance, that contractual IP disputes could be arbitrated and rejected an excessively broad proposition that copyright disputes automatically fall outside arbitration.

The Court observed that the arbitration clause was broadly worded and covered disputes arising out of or in connection with the term sheet.

Importance for co-production

This case is extremely important where a co-production agreement provides:

• exclusive distribution rights;
• licensing rights;
• digital exploitation rights;
• territorial rights;
• minimum guarantees.

A producer cannot necessarily avoid the arbitration agreement merely by describing the dispute as a "copyright infringement" dispute.

Practical lesson

The tribunal should determine the contractual entitlement to exploit the copyright, while avoiding an adjudication that purports to determine statutory rights against persons who are not parties to the arbitration.

8. M/s Seven Screen Studio v. M/s X.B. Film Creators, Madras High Court, 2021

This case is especially relevant because it involved an actual film co-production services and assignment-of-rights agreement.

The proceedings concerned a co-production services and assignment-of-rights agreement and an addendum containing an arbitration arrangement.

The Madras High Court exercised jurisdiction under Section 11 and appointed a sole arbitrator to adjudicate disputes arising from the parties' agreement.

Significance

The case demonstrates how disputes arising from a film co-production and assignment arrangement can be channelled into arbitration.

It is particularly relevant to disputes concerning:

• production services;
• assignment of rights;
• contractual obligations;
• exploitation arrangements;
• termination;
• financial obligations.

Lesson

A properly drafted co-production agreement should treat IP assignment and exploitation obligations as expressly falling within the arbitration clause.

9. Vidya Drolia v. Durga Trading Corporation, (2021) 2 SCC 1

Vidya Drolia significantly refined Indian law on arbitrability.

The Supreme Court developed a four-fold framework concerning non-arbitrability.

The important proposition for film-IP disputes is that courts must determine whether:

1. the subject matter concerns rights in rem;
2. the cause of action affects third-party rights;
3. the dispute is entrusted by legislation to a particular public forum; or
4. arbitration would be contrary to public policy or statutory prohibition.

The Court reaffirmed the importance of distinguishing rights in rem from contractual rights in personam.

Film application

Consider a dispute between two co-producers:

"Did Producer B breach the agreement by granting the OTT rights to Netflix without Producer A's consent?"

That is fundamentally an inter-party contractual dispute.

Compare:

"Declare the copyright in this film invalid against everyone."

The second question is materially different.

Practical significance

Vidya Drolia therefore supports a claim-by-claim analysis rather than a blanket rule excluding IP-related disputes from arbitration.

10. Hero Electric Vehicles Pvt. Ltd. v. Lectro E-Mobility Pvt. Ltd., Delhi High Court, 2021

Although not a film case, Hero Electric is highly useful for understanding contractual disputes involving IP.

The dispute concerned trademark rights and contractual arrangements, and the defendants sought reference under Section 8.

The Delhi High Court examined the relationship between the contractual dispute and the underlying trademark rights.

Relevance to film co-production

The same reasoning can apply where a film agreement contains:

• title rights;
• character rights;
• merchandising rights;
• franchise rights;
• trademarks associated with the film.

For example, if a co-producer is contractually prohibited from licensing merchandise using the film's title, the resulting dispute may be contractual even though trademark/IP rights are involved.

Key lesson

The mere presence of an IP right does not automatically convert every contractual dispute into a non-arbitrable rights-in-rem dispute.

11. A. Ayyasamy v. A. Paramasivam, (2016) 10 SCC 386

This case primarily concerns fraud and arbitration, but its principles can become important in film co-production disputes.

Film production frequently involves allegations such as:

• manipulation of accounts;
• concealed distribution contracts;
• secret licensing;
• diversion of film revenues;
• fraudulent assignment of rights;
• suppression of OTT revenues.

The Supreme Court held that a mere allegation of fraud does not automatically make a dispute non-arbitrable.

Film application

Suppose Producer A alleges:

"Producer B secretly licensed the film to an overseas distributor and concealed the revenue."

That allegation may involve fraud, but the underlying dispute can still be contractual and arbitrable.

A more serious question arises if the allegation concerns the very existence or authenticity of the arbitration agreement.

12. Avitel Post Studioz Ltd. v. HSBC PI Holdings (Mauritius) Ltd., (2021) 4 SCC 713

This is another important fraud-and-arbitration authority with strong relevance to the entertainment industry.

The Supreme Court emphasised that allegations of fraud do not automatically prevent arbitration.

The crucial inquiry is whether the fraud merely concerns the contractual dispute or goes to the very foundation of the arbitration agreement and the arbitral jurisdiction.

Film application

Suppose a co-producer alleges:

"The other producer falsified production accounts."

This does not automatically defeat arbitration.

But suppose:

"The document containing the arbitration clause was fabricated and my company never agreed to arbitration."

That is fundamentally different.

Practical consequence

Film agreements should ensure that the arbitration clause is:

• separately acknowledged;
• properly executed;
• incorporated into all amendments;
• preserved in signed electronic records.

13. Goldmines Telefilms Pvt. Ltd. v. Passion Film Factory, Bombay High Court, 2025

This is a particularly significant recent film-industry example.

The dispute arose from a Film Co-production Agreement concerning a Tamil-language science-fiction film.

The agreement dealt extensively with exploitation rights, including rights to:

• market;
• distribute;
• sub-distribute;
• license;
• commercially exploit;
• exploit through different media and platforms.

The proceedings involved an application for interim measures in the context of the co-production relationship.

Significance

The case illustrates the modern complexity of film IP.

A contemporary co-production agreement cannot simply state:

"Producer A owns the film."

It must define individual exploitation rights.

For example:

Such specificity significantly reduces arbitration disputes.

14. WIPO Film Co-Production Arbitration Example

A particularly useful international example comes from the WIPO Arbitration and Mediation Center.

Producers from Mexico, Portugal and Spain entered into a co-production agreement for an animated film.

The agreement provided for WIPO expedited arbitration under Mexican law.

A dispute arose after one party unilaterally terminated the co-production agreement.

The arbitration involved technical questions concerning production materials, and a tribunal-appointed expert was used. Following an online hearing, the sole arbitrator issued an award concerning the legality of the unilateral termination.

Significance

This example demonstrates why arbitration is particularly suitable for international film co-productions:

• multinational parties;
• specialised technical evidence;
• confidentiality;
• expedited proceedings;
• expert evidence;
• remote hearings;
• specialised arbitrator selection.

15. What Exactly Can a Film-IP Tribunal Decide?

A well-drafted arbitration clause can permit the tribunal to determine:

Contractual IP ownership

Whether Producer A or Producer B is contractually entitled to particular exploitation rights.

Assignment

Whether an assignment complied with the co-production agreement.

Licensing

Whether a producer had authority to license:

• theatrical rights;
• OTT rights;
• satellite rights;
• music rights;
• foreign rights.

Royalty disputes

Whether royalties were correctly calculated.

Revenue accounting

Whether one producer concealed revenues.

Unauthorised exploitation

Whether a party exceeded the agreed territorial or media restrictions.

Termination

Whether termination of the co-production agreement was valid.

Damages

Whether unauthorised exploitation caused financial loss.

Injunctive/interim relief

Subject to applicable law, interim measures can be sought to prevent imminent exploitation of disputed content.

16. What May Remain Outside Arbitration?

The distinction is crucial.

A tribunal may face difficulty where the requested relief effectively requires determination of a right in rem or affects third parties who never agreed to arbitration.

Examples include:

• cancellation of a copyright registration with effects against the public;
• determination of statutory validity of an IP right;
• relief against non-parties;
• declarations affecting the rights of the world at large;
• matters reserved exclusively to statutory authorities.

Therefore, a claimant should not assume that putting the word "copyright" in its pleadings automatically makes the dispute non-arbitrable.

The tribunal and court must examine the substance of the claim and the relief sought.

17. Film Copyright vs Contractual Exploitation Rights

This distinction can be represented as follows:

Underlying copyright

↓

Statutory right protected by copyright legislation

↓

Co-production agreement

↓

Allocation of exploitation rights between Producer A and Producer B

↓

Contractual dispute

↓

Arbitration

The arbitrator may determine:

"Producer B had no contractual right to grant the overseas OTT licence."

But that is different from declaring:

"The copyright itself is invalid against the entire world."

18. Typical Film Co-Production Arbitration Scenario

Consider the following hypothetical.

Producer A contributes ₹20 crore.

Producer B contributes ₹10 crore plus production infrastructure.

The agreement provides:

• A receives 60% economic rights;
• B receives 40%;
• overseas rights require mutual consent;
• OTT rights are jointly controlled;
• music rights are licensed jointly;
• disputes are subject to arbitration.

After completion, B grants an exclusive worldwide OTT licence without A's consent.

A commences arbitration claiming:

1. declaration that B breached the agreement;
2. injunction against unauthorised exploitation;
3. accounting of OTT revenue;
4. damages;
5. return of improperly received licence fees;
6. termination of B's contractual exploitation rights.

Arbitrable issues

The tribunal can ordinarily examine:

• interpretation of the co-production agreement;
• allocation of contractual rights;
• whether B exceeded its authority;
• whether the licence breached the agreement;
• damages and accounting.

Potential non-arbitrable dimension

If A asks the tribunal to issue a declaration having effect against every third party concerning the statutory validity of copyright itself, the tribunal must consider the limits of its jurisdiction.

19. Territoriality Creates Additional Complexity

Copyright is fundamentally territorial.

A film co-production may involve:

• Indian copyright law;
• US copyright law;
• UK copyright law;
• EU copyright rules;
• Singapore law;
• UAE law;
• other national laws.

A single film can therefore have different legal consequences in different territories.

The arbitration clause should specify:

seat of arbitration + governing law + substantive IP laws applicable to particular territories.

For example:

"The agreement shall be governed by Indian law. The seat shall be Singapore. Questions concerning the subsistence and infringement of copyright in particular territories shall be determined by the mandatory law of the relevant territory."

This avoids confusion between:

• governing law of the contract;
• law governing the arbitration;
• law applicable to copyright;
• law of enforcement.

20. Confidentiality Is Particularly Valuable

Film disputes often contain commercially sensitive information:

• unreleased scripts;
• budgets;
• casting information;
• production footage;
• distribution agreements;
• OTT negotiations;
• celebrity contracts;
• unreleased music;
• marketing strategies.

Public litigation can create substantial reputational and commercial damage.

Arbitration can therefore provide a more controlled forum, although parties should expressly address confidentiality rather than assuming that every legal system provides identical confidentiality protections.

21. Interim Relief in Film-IP Arbitration

Interim measures are often more important than the eventual damages award.

A producer may urgently seek protection against:

• release of an unauthorised version;
• unauthorised OTT upload;
• sale of distribution rights;
• destruction of master materials;
• disclosure of confidential scripts;
• exploitation outside the agreed territory.

Under Indian arbitration law, Sections 9 and 17 can become important.

The agreement should also address the tribunal's authority to grant appropriate interim relief.

22. Evidence Issues

Film-IP arbitration frequently requires specialised evidence.

Documentary evidence

• contracts;
• copyright assignments;
• emails;
• production records;
• distribution agreements;
• invoices;
• royalty statements.

Digital evidence

• OTT dashboards;
• streaming data;
• platform analytics;
• metadata;
• digital master files;
• blockchain records where relevant.

Expert evidence

Experts may be needed for:

• copyright ownership;
• forensic accounting;
• digital revenue;
• film production quality;
• technical effects;
• valuation of exploitation rights.

The WIPO film co-production example demonstrates the usefulness of tribunal-appointed technical expertise in a technically complex production dispute.

23. Damages in Film-IP Arbitration

The tribunal may consider several measures.

Lost profits

Revenue the innocent producer would reasonably have earned.

Account of profits

Profits obtained through unauthorised exploitation.

Contractual damages

Damages specified in the agreement.

Royalty-based damages

A hypothetical licence fee for unauthorised exploitation.

Restitution

Return of money improperly obtained.

Costs

Arbitration and legal costs may also be allocated according to the applicable rules and tribunal's powers.

24. Important Drafting Recommendations

A sophisticated film co-production agreement should contain a detailed IP schedule.

It should identify:

1. underlying literary rights;
2. screenplay rights;
3. adaptation rights;
4. music rights;
5. character rights;
6. title rights;
7. remake rights;
8. sequel rights;
9. prequel rights;
10. dubbing rights;
11. subtitling rights;
12. theatrical rights;
13. satellite rights;
14. OTT rights;
15. mobile rights;
16. gaming rights;
17. merchandising rights;
18. foreign territorial rights;
19. promotional rights;
20. future technology rights.

The arbitration clause should expressly cover:

"all disputes concerning ownership, assignment, licensing, exploitation, accounting, revenue sharing, distribution, infringement of contractual exploitation rights, termination and consequences of termination."

25. Model Arbitration Clause Concept

A particularly useful clause would provide that disputes:

"arising out of or relating to this Co-Production Agreement, including any dispute concerning the ownership, assignment, licensing, exploitation, distribution, accounting, revenue sharing, termination or contractual use of any intellectual-property rights relating to the Film or its underlying works..."

are subject to arbitration.

The clause should additionally specify:

• number of arbitrators;
• appointment mechanism;
• seat;
• language;
• governing law;
• emergency/interim relief;
• confidentiality;
• expert evidence;
• expedited procedure where appropriate.

26. Consolidated Case-Law Table

27. Overall Legal Position

The safest proposition is not:

"Intellectual-property disputes cannot be arbitrated."

Nor is it:

"Every copyright dispute is arbitrable."

The more accurate proposition is:

Where a film co-production dispute concerns contractual rights and obligations between parties—such as assignment, licensing, exploitation, distribution, accounting, royalties, revenue sharing, termination or unauthorised contractual use of IP—the dispute is generally capable of being submitted to arbitration, provided the arbitration agreement is valid and the relief sought does not require determination of a non-arbitrable right in rem or affect third-party rights beyond the tribunal's jurisdiction.

The Bombay High Court's reasoning in Eros v. Telemax, the film-specific proceedings in Seven Screen Studio and Goldmines Telefilms, together with the Supreme Court's broader arbitrability framework in Booz Allen and Vidya Drolia, provide a strong doctrinal foundation for this approach.

Conclusion

Film co-production arbitration is essentially an exercise in separating statutory IP rights from contractual exploitation rights.

The arbitral tribunal is particularly well suited to determine disputes over who promised what, who was entitled to exploit which rights, whether a licence exceeded contractual authority, how revenues should be divided, and what compensation follows from breach.

The principal limitation arises where the requested relief would require the tribunal to determine a statutory right in rem, invalidate an IP right against the public generally, or bind persons who never consented to arbitration.