Surviving the World of Fast-Paced Digital Visual Effects Productions with a Technology Escrow
By Marc G. Blatt, Esq. (with contributions by Lauren Phillips, SourceFile)
Marc Blatt is a Los Angeles-based attorney specializing in technology and new media/entertainment law. He can be contacted at firstname.lastname@example.org.
Since the dawn of the motion picture industry, achieving seamless, realistic and cost-effective visual effects has been a primary industry objective. However, it was not until fairly recent breakthroughs in digital technology, in conjunction with ongoing developments in optical technology, that this objective has become attainable.
These same technological achievements have created a new set of logistical and legal issues that must now be factored into the visual effects production equation. In fact, the tremendous increase in shot lengths and data file volume that is now expected to be created for today’s visual effects productions has forced formerly isolated facilities to pool their resources and even share proprietary technology in order to complete the negative on schedule.
The simple solution to this dilemma is to group visual effects shots into related elements and allocate the unrelated shot groupings to competing facilities. Although this divide-and-conquer approach retains some benefits in today’s visual effects productions, the complexity and necessity of matching shot elements throughout a production in many instances requires inter-facility data sharing and may even require disclosures of pro-prietary technology. Under such circum-stances, the production equation must now take competing facility alliance issues into account as well as the ever-present danger of a relationship meltdown during the production.
Fortunately, a well-planned and administered technology escrow incorporated into the production pipeline can greatly aid in achieving a solution to this predicament. Prior to examining the nuts and bolts of utilizing a technology escrow in visual effects productions, including its associated benefits and drawbacks, a brief history of visual effects and this industry’s evolution is provided to set the stage for the technology escrow’s place in the world of fast-paced visual effects productions.
Traditional Production Pipeline
Up until this past decade, feature film production has remained somewhat of a constant process. The traditional pipeline begins with the screenwriter creating a script to tell the story. A script breakdown is then created for casting, location, set design, props and budgeting purposes. Next, production illustrators create storyboards to depict the director’s vision of how each scene will unfold. The director of photography (commonly referred to as a DP) then shoots each scene based upon the script and the director’s vision. Prints are created for the post-production editing process and the final edited version is then released to the public.
Additionally, the visual effects (VFX) production crew, traditionally consisting of the VFX producer, VFX art director, VFX DP and other VFX specialists, creates optical effects to be composited into the film. In the world of optical effects, separate film elements are shot containing pyrotechnics, bluescreen/green-screen mattes, etc., and these elements are then composited together with live action footage to create scenes that would otherwise be unattainable and/or too dangerous to attempt.
Optical Visual Effects
Optical visual effects date back to the beginning of motion picture photography.[i] As far back as 1898, producers such as Georges Méliès created visual effects “[b]y stopping the camera and altering the scene before resuming, …by splicing separate films together…”, and even by drawing animation directly onto the negative as in Méliès’ Trip to the Moon.[ii] However, it would take the 1977 release of the blockbuster film Star Wars for visual effects to achieve epic proportions.
Much of the credit for Star Wars success belongs to its VFX production team’s technological breakthroughs in motion control systems and bluescreen technology. “Motion control is an electronically controlled mechanical system that allows the physical motions of a camera and/or other objects [(e.g., model/miniatures)] to be recorded, enabling successive [choreographed] passes to be photographed ‘on the fly’ with the corresponding motion blur characteristics of normal motion-picture cameras, so that composites can be created in an optical printer….”[iii]
Digital technology is used both to enhance optical effects and to generate independent visual effects, a powerful combination of tools for the film director.
Star Wars, a purely optical effects film prior to its digitally enhanced, 20th Anniversary re-release in 1997, was responsible for revolutionizing the motion picture (and television) industry virtually overnight. Digital visual effects, on the other hand, charted a less rapid evolutionary course.
Digital Visual Effects
Although some digital visual effects were utilized in film as early as 1982, the true integration of digital visual effects into film occurred over a period spanning approximately from 1989 through 1994.[iv] Today’s digital production pipeline combines traditional optical techniques with digital imaging and technology. Digital technology is used both to enhance optical effects and to generate independent visual effects, a powerful combination of tools for the film director. Furthermore, recent breakthroughs in the development of high-resolution digital scanners and optical printers are largely responsible for accelerating the industry’s integration of digital technology into motion picture production.
Unlike early motion-control devices, which relied on analog electronics, motion-picture quality digital imagery requires sophisticated hardware such as high-speed processors, massive data storage devices, and high-speed computer networks. It wasn’t until the early 1990s that hardware capable of efficiently creating motion picture quality computer generated imagery (CGI) started becoming somewhat economically practicable. More-over, software applications capable of creating these effects needed to be developed for such hardware.
The Digital Pipeline
A brief overview of the generic digital pipeline illustrates the level of detail and sheer volume of data required to create these effects. The digital pipeline includes modeling, animation, rendering and compositing of digital imagery.
The modeling stage comprises the creation of separate elements (e.g., geometric/
wireframe models, texturing, lighting, shadows and other physical attributes) for a specific object or scene in a frame. Additionally, camera characteristics, such as lens flairs, focal points, and positioning, are created in the modeling stage.
In order to complete the negative on schedule, large-scale visual effects productions at present require more than one VFX facility in the mix.
Once modeled, the digital artist, with the help of computer algorithms, then articulates how each element of the model will change over the shot’s timeline (e.g., the animation stage). For instance, lighting may be animated to emulate the sun’s position in the sky as the day passes, shadows will need to track the object in relation to its lighting, and the object itself may need to be set in motion, including physical deformation, and then tracked by the camera in a specific manner. Of course, the great thing about digital visual effects is that these same tools may be used to defy the natural laws of physics.
Next, the rendering stage, a time intensive process accomplished through the sheer power of networked multi-processors, computes and produces the completed image of this animated model. It is at this stage in the pipeline where artifacts, abnormal deforma-tions and other glitches in the modeling and animation become apparent. This process is highly iterative, requiring the digital artist to go back to the modeling and/or animation stages and then re-render the image until the desired effect has been attained.
The compositing stage involves combining multiple independent images into one image. For example, a digital space battle would involve separate elements such as individual spaceships, starfields, planets, and possibly even asteroids. Each of these elements would be digitally modeled, animated and rendered—e.g., geometric models of the stars, texture maps establishing the starfields’ color, brightness and reflectivity, etc., would be created in the modeling stage, the stars are then animated and ultimately rendered into the final starfield image. The separate rendered images of the spaceships, starfields, planets and asteroids would then be combined into the final composited battle scene.
To better illustrate the sheer volume of data involved in these productions, consider the opening pull-back through the universe shot sequence for Warner Brothers’ 1997 release Contact. Just one of numerous digital effects sequences produced for the film, this shot was created at Sony Pictures Imageworks Inc. (Imageworks) and to date is considered to be the longest single digital visual effects sequence in history. This shot sequence is 4,710 frames long (translating to approximately 3 minutes and 16 seconds of footage), involved 98 independent layers of compositing, required over 113,000 hours of processor time and over 184 gigabytes of disk space to create.[v] By comparison, in 1993 (a mere four years before the release of Contact) Jurassic Park dazzled audiences with a combined total shot footage of 5 to 6 minutes of digital dinosaurs. Conclusion: High-resolution data files of motion picture quality visual effects elements are labor intensive, processor intensive and storage exacting; moreover, the technological limits of the visual effects industry are constantly being pushed to meet the ever growing demand for bigger, better and more lengthy digital effects.
R&D teams at effects houses such as Industrial Light & Magic (ILM), computer hardware developers, such as Silicon Graphics (SGI) and Sun Microsystems, and software developers, such as Adobe and Alias/Wavefront, are utilizing their creative engineering talents to make the dreams of directors such as George Lucas, Steven Spielberg and James Cameron a reality. In fact, the R&D teams at ILM were largely responsible for many of the major VFX industry breakthroughs in hardware (e.g., digital scanners and optical printers) and software (e.g., Pixar’s Renderman and Adobe’s Photoshop). From space travel (as depicted in films such as Warner Brother’s Contact) and futuristic assassins (as depicted in films such as Carolco’s Terminator 2: Judgment Day) to films containing transparent effects that enhance the film’s footage without being obvious to the audience, the digital age of visual effects has arrived, and with it comes an ever changing business (and legal) model.
The Divide-and-Conquer Approach
Keeping this very abbreviated history and description of digital effects in mind, it is not difficult to understand why VFX facilities would hoard their technological breakthroughs and production methodologies.
Each facility’s production pipeline may be capable of yielding similar artistic results, but often a specific facility’s proprietary technology and technical expertise in a specialized field of visual effects, coupled with a workable proposed budget, is the determining factor in awarding a project. In fact, many facilities, such as Rhythm & Hues and Imageworks, following in ILM’s footsteps, created their own proprietary visual effects software engineering departments.
The convergence of digital technology into the VFX industry raises issues similar to those addressed in traditional source code escrows regarding custom software develop-ment.
Up until approximately 1995, a single facility could effectively produce the entire volume of data required to create a VFX production for a feature film. However, increased demands for creating more complex and visually stimulating visual effects, coupled with the time and economic constraints imposed by fast-paced feature film production, caused a revolution in the business philosophy of these VFX facilities. In order to complete the negative on schedule, large-scale visual effects productions at present require more than one VFX facility in the mix. Thus, a solution to working in concert while retaining a facility’s proprietary competitive edge had to become part of the equation.
As previously discussed, the logical solution for working with competing facilities was the divide-and-conquer approach. By grouping related shot elements and then allocating related shot groupings on a per facility basis, inter-facility sharing of data files, proprietary technology and methodologies can be avoided. Unfortunately, the divide-and-conquer approach does not function as efficiently now that the complexity of visual effects shots requires elements to be matched throughout most of a film’s effects shots (e.g., starfields, etc.) and the specialized talents of different facilities (e.g., morphing, fur, etc.) to be performed within a single shot. Moreover, this approach does not provide any form of safety net for completing the negative on schedule in the event of a relationship meltdown with one or more of the effects facilities.
Stated another way, a relationship meltdown under the divide-and-conquer approach would require another effects facility to create the disgruntled facility’s shots from ground zero (i.e., no data files and possibly no specific production pipeline in place for creating these specific shots) while confronted with the production’s rapidly approaching deadline.
A Practical Solution
It is in this situation that a well-planned and administered technology escrow can aid tremendously in completing the work on or as near to schedule as possible and even establish an evidentiary chain in the event the meltdown results in litigation or arbitration. Although a complete discussion of technology escrows in visual effects production is beyond the scope of this article, the following will provide the practitioner with a general foundation for analyzing and addressing the issues at hand.
The convergence of digital technology into the VFX industry raises issues similar to those addressed in traditional source code escrows regarding custom software development. Namely, what assurances does the licensee have that the product will be completed reasonably within budget and on schedule? What guaranty does the licensee have that the licensor will continue to provide necessary support and updates?[vi]
Under certain circumstances, hopefully as a last resort, a substitute VFX facility may be required to complete the work of the original facility. The first concern to address in this situation is who ultimately owns the data files. (i.e., are the data files to be included as part of the deliverables?) Some VFX facilities retain all rights to the data files and deliver only the negative to the production company. Retention of the data files protects trade secrets contained within the data files from disclosure or even reverse engineering; retention of ownership may even save the VFX facility money in the event it can repurpose the data files for a future production.[vii] Moreover, if data files were created with third party libraries, such as ViewPoint DataLabs three-dimensional wireframe model libraries, retention of data files protects against inadvertent infringement of such third party’s intellectual property rights.[viii]
Obtaining another facility’s consent to deposit and license its proprietary technology can be a very difficult, at times impossible, task depending upon (1) how much that facility needs the work and (2) the competitive value such proprietary technology possesses.
Each VFX facility tailors its own proprietary pipeline of techniques and methodologies specifically for the purpose of creating the data files for the production. Without knowledge of these techniques and methodologies, the data files created in applications such as Microsoft’s SoftImage may be all but worthless to the digital artist.[ix] Additionally, the original VFX production facility may have developed proprietary application(s), rendering shaders, plugins, etc. (proprietary technology), that may be required by the substitute facility to recreate and complete the other facility’s effects.
Thus, the escrow should provide for the deposit of a written description of the VFX facility’s techniques and methodologies, the data files, object code versions of any and all proprietary technology utilized for creating the shots and, since this is an iterative process, future deposits of all improvements and iterations derived therefrom during the production. Moreover, licenses of limited scope and duration need to be provided for all proprietary technology to be deposited.
Obtaining another facility’s consent to deposit and license its proprietary technology can be a very difficult, at times impossible, task depending upon (1) how much that facility needs the work and (2) the competitive value such proprietary technology possesses. Based upon the estimated life of the proprietary technology and its content, a licensing scheme, coupled with a carefully drafted set of release events for the escrow agreement, can be devised that adequately protects the concerns of the licensor/depositor.
Both the term of the license and the escrow should extend for a period beyond delivery of the finaled shots in case last-minute changes are required. Although a definite date (or number of days) beyond final delivery may be appropriate, under most circumstances the general theatrical release of the picture is a practical cut-off date since pre-release audience screenings may exhibit a need to revise the work.
The purpose of the licensee’s use of the proprietary technology should be limited solely to the creation of the visual effects shots to be produced. In the event proprietary software technology is involved, binary/object code versions may be deposited and license keys encoded with specific expiration dates into the deposited software. The written license agreement should explicitly provide the date that such license keys are set to expire and a procedure for renewing the license in the event the production is not completed on schedule.[x]
Additionally, a carefully tailored software audit right (possibly granting the licensor access to specific servers and/or encoding software audit tools) to monitor licensee’s use of the licensor’s code is a possible solution; however, the licensee may have legitimate concerns about protecting its own proprietary technology, including licensed third party technology, that may limit the usefulness or practicality of an audit right. Due diligence further requires that the practitioner address standard intellectual property licensing issues such as disclaimers of warranty, consequential damages, limitations of liability, indemnification, confidentiality, and other licensing related provisions.
As with the traditional source code escrow, assurances of the accuracy and completeness of the deposits requires the creation and implementation of a verification procedure. Unlike most source code deposits, high-end motion picture visual effects data files will in all probability require the acquisition of additional licenses for the software applications utilized to create the data files, a high-end graphics capable SGI or Sun workstation to conduct the verification(s), and a data device capable of accessing/reading the deposited data file tapes (or other storage medium).[xi]
While the relationship of the parties remains amicable, it is essential that an agreement be reached as to the costs each party will respectively bear, the location where the verifications will take place,[xii] the representative(s) from each party authorized to be present during the verifications, the number of mandatory verifications (including a procedure for additional verifications, if necessary), and the individual(s) designated to conduct the verifications. The verifications should be conducted by an independent third party who retains the requisite skills of a technical director practicing in the motion picture visual effects industry.
The importance of following through with the verification process cannot be over-emphasized. For, without sufficient assurances as to the ability of a substitute facility to recreate and complete the work, the escrow will not serve its primary purpose (i.e., completing the production on schedule). Production personnel, including accountants, need to be educated on how to integrate the technology escrow into the production pipeline, including budgeting for additional personnel to prepare and keep track of the deposits. Otherwise, the powerful benefits yielded by maintaining a technology escrow during a visual effects production may go unrealized.
Technology escrows provide a practical solution for protecting both business and legal interests in the world of fast-paced visual effects productions, a formidable task that on numerous occasions often results in the drafting and execution of many after-the-fact agreements. Unfortunately, it is when a dispute or relationship meltdown occurs that such practices come back to haunt the production.
Without an escrow in place, there are no assurances that the data files of a work in progress will be available to complete the production. Moreover, the practice of routinely depositing the data files should satisfy the business records hearsay exception, providing a digital evidentiary chain of performance and artistic quality available to the court (or arbitrator) for resolving either party’s disputes. Thus, although the technology escrow may at first blush appear to be an intricate process, when compared with the alternative of incurring substantial overages and delays on a multi-million dollar production, the benefits received from properly implementing and administering a technology escrow far outweigh the costs incurred.
[i] In fact, film itself is a visual effect in that the illusion of continuous motion is created by filming and then projecting a succession of individual frames at 24 frames per second. To illustrate this, a car traveling at 60 mph will travel approximately three and two-thirds feet between each frame and yet appear on the screen to be traveling in one continuous, seamless motion.
[ii] Robert Sklar, “Movie-Made America,” p. 22, Random House, Inc., NY, 1975.
[iii] Richard Edlund, “Motion-Control Cinematography,” p. 425, ASC, American Cinematographer Manual, Seventh Edition, The ASC Press.
[iv] In reality, the integration of digital visual effects into the film industry is an ongoing and continuing process.
[v] It should be noted that processor time does not account for the total hours labored away from workstations by digital artists, software engineers, technical directors, vfx supervisors, vfx producers, etc., in order to make this shot sequence a reality.
[vi] In film production, support can be analogized with continuing to provide changes to the work as required throughout the production process.
[vii] For practitioners representing the VFX facility in negotiating a production deal, it is a good idea to obtain written permission to repurpose the data files in other productions. The film producer’s legal advisor will most probably require written assurances that any future product created with the data files will not be similar to the original work.
[viii] Of course, the film’s production company (or substitute VFX facility) can acquire their own licenses for using such third party libraries.
[ix] i.e., it may take considerably less time for a digital artist to create the work from scratch than trying to decipher the original digital artist’s methodology. Some applications, such as Side Effects Software’s Houdini, incorporate a data flow graphical user interface (GUI) that provides a pipeline flowchart of how the modeling, animation, etc., was created.
[x] It is imperative that notice of expiration of encoded license keys be provided to the licensee since use of the code at the time of expiration could crash the user’s system, causing loss and/or damage to data and equipment, possibly resulting in tort liability to the licensor for intentionally or negligently planting a “software time bomb”.
[xi] In most cases, the VFX facility itself will not be in a position to spare licenses and workstations for the verification process due to the magnitude of work it is creating. Aside from this reason, the verification process should be conducted at a neutral facility or location to avoid the suggestion of tainted results.
[xii] See endnote 11, supra.
† A version of this article, entitled May the Force Be With You, has been published in the June/July 1998 edition of the San Francisco Attorney and has been published online by the Computer Law Association at http://www.cla.org/.
 In fact, film itself is a visual effect in that the illusion of continuous motion is created by filming and then projecting a succession of individual frames at 24 frames per second. To illustrate this, a car traveling at 60 mph will travel approximately three and two-thirds feet between each frame and yet appear on the screen to be traveling in one continuous, seamless motion.
 Robert Sklar, “Movie-Made America,” p. 22, Random House, Inc., NY, 1975.
 Richard Edlund, “Motion-Control Cinematography,” p. 425, ASC, American Cinematographer Manual, Seventh Edition, The ASC Press.
 In reality, the integration of digital visual effects into the film industry is an ongoing and continuing process.
 It should be noted that processor time does not account for the total hours labored away from workstations by digital artists, software engineers, technical directors, vfx supervisors, vfx producers, etc., in order to make this shot sequence a reality.
 In film production, support can be analogized with continuing to provide changes to the work as required throughout the production process.
 For practitioners representing the VFX facility in negotiating a production deal, it is a good idea to obtain written permission to repurpose the data files in other productions. The film producer’s legal advisor will most probably require written assurances that any future product created with the data files will not be similar to the original work.
 Of course, the film’s production company (or substitute VFX facility) can acquire their own licenses for using such third party libraries.
 i.e., it may take considerably less time for a digital artist to create the work from scratch than trying to decipher the original digital artist’s methodology. Some applications, such as Side Effects Software’s Houdini, incorporate a data flow graphical user interface (GUI) that provides a pipeline flowchart of how the modeling, animation, etc., was created.
 It is imperative that notice of expiration of encoded license keys be provided to the licensee since use of the code at the time of expiration could crash the user’s system, causing loss and/or damage to data and equipment, possibly resulting in tort liability to the licensor for intentionally or negligently planting a “software time bomb”.
 In most cases, the VFX facility itself will not be in a position to spare licenses and workstations for the verification process due to the magnitude of work it is creating. Aside from this reason, the verification process should be conducted at a neutral facility or location to avoid the suggestion of tainted results.
 See endnote 11, supra.