When the Director differs from the script
<p>Let's assume Alice wrote a bestseller. Then she made a script from it. This script is then given to the movie studio in Hollywood, who contracts Director Bob to make the actual film. The studio doesn't have the greatest lawyers, so it signs conflicting contracts:</p>
<p>The contract between the studio and the author was written by the studio's lawyer, but the author demanded two provisions: It explicitly states that the studio or its employees and contractors may not alter the script (except for minimal things) without the written approval of the change by Alice, though it is not expressly said if said approval needs to be prior or could be gotten after the fact. The very next clause prescribes that if the approval provision is breached, the license to make and distribute the adaption is void without the need of further notice.</p>
<p>The contract of the studio with the Director was drafted by the Director's lawyer as his <em>standard contract</em> and the studio representative just signed it off after being handed it. It allows him <em>artistic leeway</em> over how to alter the script but never specifies what that means. It doesn't contain any damage clause. During the negotiation with the representative, Bob did not inquire about the licensing contract the studio had with Alice or the script author and thus didn't read it, though he could have gotten a copy if he had asked.</p>
<p>Filming starts, and Director Bob does as he does, starting to edit the script by altering the dialogue and merging characters as he sees fit, using what he calls <em>artistic leeway</em>. He also never sends his alterations to the studio to have them check them for approval by the author.</p>
<p>Then, Alice decides to request a pre-premiere of the film and is given so by the studio (Director Bob would never approve!). As a result, Alice discovers the substantial alterations and points out that the license was voided, prohibiting the distribution.</p>
<p>Which brings us to the questions of law of this situation:</p>
<ul>
<li>Was the studio representative [grossly] negligent in granting Director Bob the <em>artistic leeway</em> clause, not expressly informing Bob about the licensing terms and not checking up on changes when it was bound to get approval for such by its contract?</li>
<li>Is Director Bob liable for the expenses and damages incurred by bringing the studio into the breach of its licensing contract?</li>
<li>Did, through the voiding of the license, the film become an unlicensed derivate and thus it is wilful copyright infringement? If so, at what moment did it become so?</li>
</ul>

<blockquote>
<p>Was the studio [grossly] negligent in granting Director Bob the artistic leeway clause and not checking up on changes when it was bound to the contrary by its contract?</p>
</blockquote>
<p>The studio (or its agent/representative, per your subsequent edit) was even reckless for agreeing to <em>artistic leeway</em> despite knowing that the production ought to adhere to Alice's script. The term <em>artistic leeway</em> denotes or implies permission to make non-negligible changes to the script. The contract between studio and director should have addressed the issue carefully.</p>
<blockquote>
<p>Is Director Bob liable for the expenses and damages incurred by bringing the studio into the breach of its licensing contract?</p>
</blockquote>
<p>The director cannot be liable for violating constraints which are missing in his contract with the studio. In fact, the term <em>artistic leeway</em> gives the misleading impression that the studio is not under such constraints.</p>
<blockquote>
<p>Did, through the voiding of the license, the film become an unlicensed derivate and thus it is wilful copyright infringement? If so, at what moment did it become so? it is not expressly said if said approval needs to be prior or could be gotten after the fact</p>
</blockquote>
<p>The film becomes an unlicensed derivate if Alice is not timely informed about the non-negligible changes the director made. <em>Timely</em> in this context refers to the possibility of rolling back the changes in the event that Alice rejects them.</p>
<p>The hypothetical scenario you outline is the converse of the movie example in section <em>Practical Consequences</em> of <a href="https://www.finnegan.com/en/insights/articles/understanding-the-importance-of-derivative-works.html" rel="nofollow noreferrer">this page</a>. Here, Alice took the precaution of requiring the second clause you mention.</p>

copyright contract-law licensing california derivative-work