A client has contacted you. They want to produce a motivational video that will run at their national sales convention two months from now. Your response? “Super, sounds good. Let’s set up a meeting next week and talk.”

They then toss in a small detail.

“We’d really like to use a clip from that movie . . . the one with Will Smith where he’s down and out but never gives up trying to become a stockbroker. What’s it called? . . . The Pursuit of Happyness!”

Great film, questionable idea.

In cases like this, a production company needs to serve its client or potential client well – and wisely. One approach would be to use the clip, but to require the client to indemnify the production company against any potential liability. In the event of a lawsuit by the movie company for unauthorized use of the clip, the client would be obligated to reimburse the production company for the company’s attorney’s fees and any financial damages awarded to the movie studio. Assuming that the client could pay these amounts, what factors should the production company consider in deciding whether to use the clip?

“Using a portion of a movie, song, photograph or other creative work without prior authorization can expose you and your client to a lawsuit for copyright infringement,” cautions Vincent H. Peppe, an attorney who specializes in entertainment and media law. “Under U.S. copyright law, statutory damages for infringement can range from $750 to $150,000.”

There are exceptions to this rule, Peppe notes. The legal doctrine of “fair use” permits limited uses of another’s copyrighted work for certain purposes. “The fair use provision” of the copyright statute identifies several types of uses that are generally allowed, including news reporting, teaching, criticism and research.” Courts have held that fair use can apply in many other situations, as well. “However,” Peppe observes, “there are no hard and fast rules that determine whether a particular activity is copyright infringement or fair use.” “The statute requires courts to consider the nature of the copyrighted work (e.g., a best-selling novel, a personal letter, a public speech), the amount of copyrighted material that is used, whether the material is used for a commercial purpose and other relevant factors.” Before using an excerpt from a copyrighted work without prior authorization, however, Peppe advises production companies to consult with a qualified attorney to evaluate their options, including obtaining a temporary license to use an excerpt from a work in their particular project.

In this type of scenario a production company needs to exercise caution for their benefit as well as the benefit of their client. Training and motivating employees is crucial. Equally critical is preserving a clients’ business profile and reputation. Seeking the advice of a qualified attorney to examine these issues, rather than making what could be costly assumptions, is the wisest choice.