Two recent film cases related to copyright law have relevant lessons for film producers and distributors. Both decisions were reached on motions to dismiss, with one court affirming dismissal and the other denying. The subtext in the first case is the need to have all rights properly cleared, and to obtain errors and omissions insurance, before distribution of a film. Both cases show the importance of copyright registration to film producers and content creators because without it, neither of the plaintiffs would have been able to file suit.
Copyright Infringement Based on a "Chain of Distribution" Theory
In ITN Flix, LLC v. Univision Television Group, Inc., a media broadcaster’s motion to dismiss was denied and the case allowed to proceed based on the plaintiff’s allegations in a second amended complaint. The film at issue was entitled “Machete” which allegedly infringed upon the plaintiff’s film “Vengeance.” Interestingly, both films starred Danny Trejo and featured characters seeking vengeance for a family’s murder, among other uncanny similarities in plot sequencing, costumes, scenery, themes, pace, and even specific lines of script. Ownership of copyright registrations for “Vengeance” was key to the plaintiff’s ability to sue.
Proving copyright infringement requires either evidence of direct copying, or (1) that the defendant had access to the copyrighted work and (2) substantial similarities between the works. The defendant argued correctly that it had no access to the work, or even participated in its creation. However, under a “chain of distribution” theory, the court held that a distributor, publisher or broadcaster can be liable for copyright infringement by broadcasting or otherwise distributing a work that has copied protected elements of plaintiff’s copyright, even if they did not know beforehand that a work was infringing.
The court acknowledged the “chain of distribution” theory “may seem unfair to ‘innocent resellers’” such as the defendant, but stated that the Copyright Act “prioritizes recovery…to protect against insolvent or unavailable reproducers over fairness to downstream distributors.” The moral of the story according to the court was for distributors to protect themselves “by diligent inquiry to avoid infringement, an indemnity agreement, or insurance.”
Allegations of Copyright Infringement Related to "Pirates of the Carribean"
In Mathew v. Disney, the creator of supernatural pirate stories in the ‘80’s and ‘90’s alleged that after directly providing copies of his works to Disney, the movie giant then developed the “Pirates of the Caribbean” movie franchise without payment or credit to him.
After registering his works with the U.S. Copyright Office, the plaintiff filed a copyright infringement suit in 2006. Disney argued that it independently created the movies' concepts, and presented artwork that later became a book (“Pirates of the Caribbean: From the Magic Kingdom to the Movie”). The plaintiff then gave up the suit and signed a release agreement in which he promised to refrain from filing any more copyright infringement suits against Disney based on his works.
In 2009 Mathew discovered inconsistent crediting of the artwork in the Disney book and claimed Disney made fraudulent misrepresentations that induced him to sign the release. However, he didn’t provide notice of his intent to rescind the release agreement until he filed suit in 2013.
The appellate court affirmed the district court’s ruling that the four-year delay substantially prejudiced Disney because the company invested heavily during that period to develop, promote, and exploit the movie franchise. As a result, the plaintiff could not rescind the release, and his suit was dismissed with prejudice.
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Film Reel photo by Runner1616 (Own work), CC BY-SA 3.0 or GFDL via Wikimedia Commons.