Good fiction tells stories about people. And some of the best stories are real ones, actually lived by actual persons. Not only are many real stories interesting, but audiences want to read about "real" stories even more than they want to read pure fiction. That's why so many stories -- and here we're talking exclusively about fiction that takes time to write and to publish, and thus generally reaches its audience weeks, months, or even years after the "true story" has left the headlines, making the fiction subject to more rigorous privacy laws in ways that "news" stories may not be -- are sold as "ripped from the headlines" or "based on a true story."
The problem for a writer who wants to write about people is if you write about a real person, you need their permission before you can sell what you've written. And not everyone who lived a great story wants you to write about it. They may want to sell it to another writer, or they may not want anyone at all to write about them.
So what's a writer to do?
You have to take liberties with the truth.
The general rule is: If an average person who reads your story or sees it on the screen has a good chance of identifying the people you are writing about, then you need those people's written permission. However, if the people in your story are not recognizable as specific individuals, then logically you have no need to obtain anyone's permission to write and sell your story.
1) What if Law and Order tells a story that's taken from the headlines?
Law and Order does change a "true" story by 50% or so, but often it is still recognizable. However, Law and Order has a lot of money. They may pay something for the rights to the story they want to copy. Also, they usually allow the lawyers they have on staff to vet the stories, so they're far less likely to be judged liable in a court of law, and/or far more likely to be able to deflect or defend any lawsuits that may come in. When you have billions, you can do the same.
2) What if the story is from overseas?
Foreign stories carry less chance that people who lived it will see what you do with their story. But anyone can sue at any time, so why leave yourself exposed? If foreigners sue you over there, you may never be able to travel to that country again without having to pay the financial judgment against you!
3) What if you are writing about a serial killer. Do they have rights?
Yes, they have rights. What's more, they're not allowed to profit from their crimes, so the families of the victims are often entitled to the killer's earnings and would probably come after you for even more money. If your story is recognizable, you've got to get the killer's permission and you've also got to deal with the victims' families. Isn't it easier to change your story enough so this is not a problem?
4) What about stories that are based on an unauthorized biography?
"Famous" people have fewer rights to their own stories. However, the line is fuzzy. You can write about Brittany (or any celebrity) all you want and she can't stop you, but if you say something too offensive, she can sue you. "The truth" is a valid defense, of course, but any celebrity has enough money to hire lawyers who can cause you an expensive problem, even if he or she doesn't prevail in court. If you want to write about a celebrity, be very sure you don't step over the fuzzy line. Study what other people are writing about other celebrities. Look at some of the lawsuits filed by celebrities to see where the line might begin -- not just the cases celebrities win, but the lawsuits they file. You don't want them filing against you. If there is any doubt at all, have an experienced attorney look over your story and make changes until s/he feels strongly that you're not going to get sued for it.
Two key things to remember are: 1) Everyone gets married. Everyone has parents. Lots of people wear glasses. Lots of people buy red cars. Those kinds of elements in your story are generic and do not serve to identify particular individuals. You can include them in your story without fear of penalty. What's more, there are certain "required scenes" (called "scenes a faire" in legal terminology) that must happen in any good story. If your hero turns and confronts his attacker, it may echo what happened in another story or what happened in real life to a particular person. But a confrontation is a required scene when writing drama, so the existence of the scene in your story is not considered proof that you stole the idea. On the other hand, if your story contains characters who grew up in a certain town at a certain time, got married at a certain age in a certain location, worked at a certain company, had certain special talents or interests, had a certain number of children in specific years, lived in a certain kind of house in a certain neighborhood, and so forth, these are not "scenes a faire." Such details convey enough specific material so a reader can easily identify a real individual on whom you modeled your character, and now you need permission.
2) Successful novels and screenplays draw lawsuits. If you write a good story, there's a good chance you'll get sued by someone claiming you stole their idea, modeled your story after their life, or both. Since you can't avoid this, don't try. And don't worry about it. A portion of your profits will go to legal defense. That's the nature of our society. Just make sure you document where you get your ideas for your stories, so when the suits do come, you can show they are without merit.
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