Two meanings:

(1) A term for fees paid to actors and writers when movies, television and radio programs and advertising are rerun on the networks, cable and satellite stations, and internationally. The increasing number of channels available through cable and satellite broadcasting has created a rising demand for programming to fill the time, much of which is repeats and re-broadcasts. As a result residual rights are becoming quite lucrative.

In the United States the right to residuals was and is primarily negotiated and administered by SAG-AFTRA (Screen Actors’ Guild-American Federation of Television and Radio Artists.) Residuals on movies are calculated as a percentage of the gross. The rate for residuals set in U.S. productions for television broadcasts of movies are 3.6 percent of broadcaster license fees; video and DVD is 4.5 percent on the first million copies and 5.4 percent thereafter; for television shows residuals are calculated by episode, based on a percentage of the performer’s original pay rate and the number of times the episode has been shown; writers earn 2 percent. The right to residuals outside the U.S. is inconsistently present and typically much more limited.

(2) In the context of a residuals clause in a non-disclosure agreement or know-how license, a provision designed to protect the ability of employees to use the skill developed from experience, including working on the licensed technology. Typically such a clause defines residuals as:

“any information that is retained in the unaided memory of one or more or the recipients employees who have had access to the confidential information pursuant to this NDA/License/Agreement. An employee’s memory is ‘unaided’ if the employee has not deliberately memorized the confidential information for the purpose of retaining and later using or disclosing it. . .”,

linked to a provision to the effect that;

“employer and/or its employees may use ‘Residuals’ for any purpose; provided that the foregoing right does not grant any license or licenses under any of [counterparty’s] copyrights or patents, other than as provided elsewhere in this NDA/License/Agreement.”

Related Terms