JAMES CAWLEY SPEAKS!

[Garth Rockett]

I don't know much about tax law, but I would say the main reason besides assurance to the donors is for tax purposes. I'd be surprised if most fan-films accepting donations on that level didn't file for that tax-exempt status. I wonder if STNV and Renegades filed for it? Like I said, I don't know much about it and maybe there are other exemption statuses to get around it.

I'm a CPA and I work with a number of nonprofits. There are a few issues that a fan-film would have to deal with if they pursued 501(c)(3) status.

First, you can't file for the status and receive it automatically just because you don't intend to run your organization as a for-profit enterprise. You have to have a legitimate charitable purpose as defined under the statute. So the first hurdle is convincing the IRS that your fan-film carries out some sort of educational or other charitable purpose and qualifies for 501(c)(3) treatment.

Second, if you get preliminary approval and can begin accepting charitable donations, you have to comply with the laws of the state or states you will be soliciting donations from. This typically requires some sort of registration with a regulatory body (attorney general or secretary of state) and annual filings.

When you start receiving donations, you have to provide contemporaneous acknowledgement to your donors that the funds they are giving you were a donation and no goods and services were received in exchange. If you are giving goods and services as part of your donation packages (which these fan-films do) you have to disclose the fair market value of such items to the donor so that they are aware that the amount they claim as a donation has to be reduced by the value of goods received. If you donated to a fan-film and did not receive this type of statement, they are unlikely to be a non-profit.

You are also required to file Form 990, the annual information return for nonprofits. This is a public document. You can look at any organization's most recently available Form 990 at guidestar.org. You can also request it directly from the non-profit, although they are allowed by law to charge you a reproduction fee.

That's just the tip of the iceberg, but it seems like a lot for a fan-film to have to deal with.

 

[Professor Zoom]

There are good reasons to go 501(3)(c) that don't involve any perceived protection against being sued by CBS. Avoiding lawsuits shouldn't be one's primary motivation. That's what I meant by being non-profit to start with. I don't like the idea of using non-profit status purely as a legal tactic.

And it wouldn't work anyway. Your tax status has zero bearing on copyright.

 

[Matthew Raymond]

@Garth Rockett, thanks for the info. Out of curiousity, do you think that people could basically use Trek Continues as a template for a 501(3)(c) filing for non-profit film production, so long as they have basically the same goals?

 

[MikeH92467]

And it wouldn't work anyway. Your tax status has zero bearing on copyright.

It does show that it takes more to turn a production into an honest to God non-profit than just saying you're not in it to make money. Anyone who believes that they can take a deduction for donating to someone like that could be in for an ugly surprise at tax time.

 

[Garth Rockett]

@Garth Rockett, thanks for the info. Out of curiousity, do you think that people could basically use Trek Continues as a template for a 501(3)(c) filing for non-profit film production, so long as they have basically the same goals?

They should be able to. Trek Continues does have 501(c)(3) status; they received their ruling letter in 2016. I just took a look at their 2015 and 2016 Form 990 on Guidestar, and I like how they phrase their charitable purpose: "To promote scientific education through the Star Trek TV series. To promote literature and the arts by producing new STC episodes modeled on TOS (The Original Series). To promote human rights & the general unity of mankind, and to fight discrimination and stereotypes."

There is the benefit of complete transparency to their donors, because the 990 contains their financial information (although I don't think they knew how to fill out the liabilities and net assets section correctly). It's pretty interesting information, and worth a look if you're wondering where they spend their money.

If you've got people willing to help you jump through the hoops, it can be a viable path.

 

[Professor Zoom]

It does show that it takes more to turn a production into an honest to God non-profit than just saying you're not in it to make money.

Sure. But, if the original IP holder comes after you for Copyright Infringement, not making money is not a defense. It might mean you are a good person whose heart is in the right place, but, that, too, is not a defense for Copyright Infringement.

I bring it up, again, because it is such a persistent myth that if you don't make money its ok to infringe. And it's not. You can still be sued. And you can lose.

Anyone who believes that they can take a deduction for donating to someone like that could be in for an ugly surprise at tax time.

And that's true too.

 

[Maurice]

They should be able to. Trek Continues does have 501(c)(3) status; they received their ruling letter in 2016. I just took a look at their 2015 and 2016 Form 990 on Guidestar, and I like how they phrase their charitable purpose: "To promote scientific education through the Star Trek TV series. To promote literature and the arts by producing new STC episodes modeled on TOS (The Original Series). To promote human rights & the general unity of mankind, and to fight discrimination and stereotypes."

I roll my eyes at the "scientific educational". There's nothing remotely educational about the magic science portrayed in most of Star Trek and by extension the STC episodes.

 

[Matthew Raymond]

I bring it up, again, because it is such a persistent myth that if you don't make money its ok to infringe. And it's not. You can still be sued. And you can lose.

While I agree that it's not a realistic legal defense in this particular case, I seem to recall that whether or not you make money can be a factor in both whether or not you infringe and how much you might have to pay as a result. It depends on the situation. Then again, IANACL.

That said, having non-profit status is really more of a PR defense than a legal one, and I don't think anyone meant to imply otherwise. Basically, @STEPhon IT is betting that they won't sue, and I can't say for certain they will. Won't be taking that bet myself, though.

 

[Phoenix219]

I still think if people didn't feel the need to publicize every bit of progress made on their production, and just waited until there was a finished product to surprise the internet with, none of this would remotely be a thing. Just quietly go about your business, all is well.

 

[feek61]

I roll my eyes at the "scientific educational". There's nothing remotely educational about the magic science portrayed in most of Star Trek and by extension the STC episodes.

I was in on those discussions and from what I remember it was suppose to be "to inspire scientific education"; not sure how or why the accountant finally worded it the way it ended up. In the end we did get granted the status and as someone earlier said; it was not easy!

 

[GNDN18]

I roll my eyes at the "scientific educational". There's nothing remotely educational about the magic science portrayed in most of Star Trek and by extension the STC episodes.

You’re being too literal about this, not to mention a bit cynical. Mae Jemison and Samantha Cristoforetti were inspired by Star Trek to study and become astronauts. My own interest in science and critical thinking came from TOS. Who can know how many people choose their paths because of the magic science show.

 

[Noname Given]

I still think if people didn't feel the need to publicize every bit of progress made on their production, and just waited until there was a finished product to surprise the internet with, none of this would remotely be a thing. Just quietly go about your business, all is well.

It is hard to generate public crowdfunding without talking about what you plan to do with the funds. (That was how many Star Trek fan film groups operated until the Guidlines.)

 

[Professor Zoom]

While I agree that it's not a realistic legal defense in this particular case, I seem to recall that whether or not you make money can be a factor in both whether or not you infringe and how much you might have to pay as a result. It depends on the situation. Then again, IANACL.

Non-Profit status or not making money, as I've said, is NOT a legal argument protecting you from infringement. A Fair Use argument will. But, you could make money or not, and use that argument.

And, copyright infringement comes with statutory fines. Perhaps, if you haven't made any more, the IP holder won't ask for them, but, they could and they would be within their rights.

Again: Non-Profit status and making no money offers NO protection from copyright infringement.

That said, having non-profit status is really more of a PR defense than a legal one, and I don't think anyone meant to imply otherwise.

Except here...

I seem to recall that whether or not you make money can be a factor in both whether or not you infringe and how much you might have to pay as a result.

But, yes, you're right, it's a PR defense.

Basically, @STEPhon IT is betting that they won't sue, and I can't say for certain they will. Won't be taking that bet myself, though.

I'm betting CBS won't sue, if you are nonprofit or not, if you follow their guidelines and don't try and use their IP to build a for profit studio.

But, full disclosure, I don't have a dog in this fight. If I have funding for a film, I would make something original rather than a fan film where I can't control the IP.

 

[MikeH92467]

Speaking of "something original" I wonder if "Polaris" will ever see the light of day?

 

[fireproof78]

You’re being too literal about this, not to mention a bit cynical. Mae Jemison and Samantha Cristoforetti were inspired by Star Trek to study and become astronauts. My own interest in science and critical thinking came from TOS. Who can know how many people choose their paths because of the magic science show.

I don't think that fits the legal definition of "educational."

Secondly, "inspiration" can be drawn from many sources. Star Trek isn't the only one.

 

[Maurice]

You’re being too literal about this, not to mention a bit cynical. Mae Jemison and Samantha Cristoforetti were inspired by Star Trek to study and become astronauts. My own interest in science and critical thinking came from TOS. Who can know how many people choose their paths because of the magic science show.
View attachment 4236

There are hundreds of hours of official Trek out there and as these fanfilms do not broaden that audience, anyone who was going to be so "inspired" would have been so by the official shows and not fan replicas. Cynical? Of claims like this? You bet.

 

[GNDN18]

I don't think that fits the legal definition of "educational."

Secondly, "inspiration" can be drawn from many sources. Star Trek isn't the only one.

There are hundreds of hours of official Trek out there and as these fanfilms do not broaden that audience, anyone who was going to be so "inspired" would have been so by the official shows and not fan replicas. Cynical? Of claims like this? You bet.

 

[Matthew Raymond]

Except here...

While I agree that it's not a realistic legal defense in this particular case, I seem to recall that whether or not you make money can be a factor in both whether or not you infringe and how much you might have to pay as a result. It depends on the situation.

But, yes, you're right, it's a PR defense.

I added the parts you left out back in to show how you quoted me out of context. I was stating that money CAN be a factor depending on the conditions, but that I didn't think the case of a fan film met those conditions.

I've looked into this further, and money is one of the four factors, but not necessarily the money a fan film raises directly.

From Measuring Fair Use: The Four Factors:

Another important fair use factor is whether your use deprives the copyright owner of income or undermines a new or potential market for the copyrighted work. Depriving a copyright owner of income is very likely to trigger a lawsuit. This is true even if you are not competing directly with the original work.

If you can show a fan film made a profit, you also demonstrate that CBS could have made a profit, which means you deprived them of income under copyright law. If, however, all of the money went to the cost of the film, the idea that CBS could have profited is more difficult to prove. That said, a non-profit doesn't make a profit as a matter of choice, so that doesn't mean a for-profit couldn't turn a profit making a similar film, so I question how much of a defense this would be. Again, I am not a copyright lawyer. I'm just trying to show that copyright law is complicated, and there's a degree of nuance to every situation.

I'm betting CBS won't sue, if you are nonprofit or not, if you follow their guidelines and don't try and use their IP to build a for profit studio.

Given that the most money you can raise within the Guidelines is $50,000 (which you probably won't raise, because why spend that kind of money on a 15-minute amateur short film), and the CBS lawyers can use a DMCA takedown without filing a lawsuit in the first place, I'd say that's a safe bet. The lawsuit wouldn't pay for itself, never mind the money CBS would spend on the PR disaster such a lawsuit would cause.

But, full disclosure, I don't have a dog in this fight.

Sure. Whatever you say.

If I have funding for a film, I would make something original rather than a fan film where I can't control the IP.

No argument here.

Speaking of "something original" I wonder if "Polaris" will ever see the light of day?

I'm not familiar with that project. Can you give me a link or description?

 

[Professor Zoom]

Sure. Whatever you say.

*sigh* If only.

I added the parts you left out back in to show how you quoted me out of context.

I didn't want to show that you contradicted yourself within one sentence.

I was stating that money CAN be a factor depending on the conditions, but that I didn't think the case of a fan film met those conditions.

A condition of what? Of whether or not you are sued? Profit or not, that's up to the copyright holder. Profit or not is not a requirement for a lawsuit.

I've looked into this further, and money is one of the four factors, but not necessarily the money a fan film raises directly.

From Measuring Fair Use: The Four Factors:

You need to be clear: that's in one of the four factors of a fair use defense. Money or not will not prevent you from being sued if the IP holder believes you have violated copyright. And lack of profit might not really be the best defense of Fair Use on the basis of Transformation when you are making a fan film replicating Star Trek.

If you can show a fan film made a profit, you also demonstrate that CBS could have made a profit, which means you deprived them of income under copyright law. If, however, all of the money went to the cost of the film, the idea that CBS could have profited is more difficult to prove. That said, a non-profit doesn't make a profit as a matter of choice, so that doesn't mean a for-profit couldn't turn a profit making a similar film, so I question how much of a defense this would be. Again, I am not a copyright lawyer. I'm just trying to show that copyright law is complicated, and there's a degree of nuance to every situation.

The best way not to get sued for copyright infringement: don't use someone else's IP without an agreement.
Or, if the IP holder has released guidelines, stick to them and don't be an asshole.

 

[Matthew Raymond]

I didn't want to show that you contradicted yourself within one sentence.

There is no contradiction. You're misreading my posts.

A condition of what?

The conditions under which you are said to infringe. For instance, if I have a charity where people in Star Trek uniforms answer people's questions about Star Trek, CBS would have to show there's actually a market for Star Trek question answering. Now, if it's a business rather than a non-profit, where I charge money to answer a question, the amount of profit I make would show that there's a market where I'm depriving CBS of profit.

Of whether or not you are sued? Profit or not, that's up to the copyright holder. Profit or not is not a requirement for a lawsuit.

Is your argument that people can sue people regardless of merit? Of course they can. With enough money, I could sue CBS for copyright infringement, if I were sop inclined. I'd lose, but I could do it.

And lack of profit might not really be the best defense of Fair Use on the basis of Transformation when you are making a fan film replicating Star Trek.

Never said it was. Quite the opposite.