v23 #3 Cases of Note

by | Jul 14, 2011 | 0 comments

Copyright v. Implied Contract

Column Editor:  Bruce Strauch  (The Citadel)  <strauchb@citadel.edu>

Larry Montz; Daena Smoller v. Pilgrim Films & TV; NBC Universal et al., UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT, 2011 U.S. App. LEXIS 9099.

This scintillating column has frequently covered the litigation travails of poor shlubs who shop their screenplay idea to a movie company and then see it appear under someone else’s name.  Unable to claim copyright to an idea, their lawsuit ends up with zilch.  So why didn’t they follow the script of this case?

As far back as 1956, the California Supreme Court recognized an implied contractual right when a writer submitted his work to a producer.  Desny v. Wilder, 46 Cal. 2d 715, 299 P.2d 257 (Cal. 1956).  And this Desny claim” has been around for fifty years.  See Gunther-Wahl Productions, Inc. v. Mattel, Inc., 104 Cal. App. 4th 27 (2002).

But is it preempted by federal copyright law?  Not according to Grosso v. Miramax Film Corp., 383 F.3d 965 (9th Cir. 2004), cert. denied 546 U.S. 824 (2005).  The expectation of payment for the use of an idea adds a new element that takes it out of the realm purely protected by copyright.  “Contract law, whether through express or implied-in-fact contracts, is the most significant remaining state-law protection for literary or artistic ideas.”  Benay v. Warner Bros. Entm’t, Inc., 607 F.3d 620, 629 (9th Cir. 2010).

Let’s Learn About Larry

Our plaintiff Larry Montz is a parapsychologist and naturally had a super-duper idea for a TV series to feed America’s prodigious appetite for the weird and unexplained.  A crack team of paranormal sleuths would roam the world with cool gear like magnetometers and infrared cameras investigating paranormal happenings.  Ghosts.  Poltergeists.  Magnetic ley lines.  Doubtless some sexy babes mixed in.  Hoo-ha!  Reality TV at its finest and just the stuff that makes America the world’s leading cultural imperialist.

Daena Smoller, publicist and producer, made the pitch to NBC, the Sci-Fi Channel and others.  Montz and Smoller were not amateurs at this, and showed screenplays and videos to illustrate this cutting-edge, high-concept series.  But the studios showed no interest.  Or at least feigned disinterest.

Because shortly thereafter, NBC partnered up with Pilgrim Films to produce Ghost Hunters in which — wait for it! — a crack team of paranormal sleuths with cool gear roamed the earth investigating weird stuff.

So Montz and Smoller went to law.

The Suit Against the Suits

Montz and Smoller alleged an implied-in-fact contract pursuant to custom and practice in the industry.  Their ideas would be confidential and not be divulged without Montz and Smoller sharing in the moolah.  And NBC and Pilgrim exploited the ideas for big bucks without cutting in Montz and Smoller.

Defendants won a dismissal on the basis of federal copyright claim preempting the state-law claims.

The Law of the Case

Ideas pitched to movie and TV producers can’t be protected by copyright.  They are after all ideas and not expression.  17 U.S.C. § 102.  But they can sho’ nuff be stolen.  And that violates the implied contract to pay the writer if the idea is used.

Desny involved an idea pitched to the famous director Billy Wilder of Sunset Boulevard and Witness for the Prosecution.  Ace in the Hole was based on Floyd Collins being trapped in a cave for two weeks.  Wilder failed to pay the idea pitchman and lost the lawsuit.

But what about this preemption thingy?  It kicks in trumping state law whenever the issue is “within the general scope of copyright.”  17 U.S.C. § 301(a).  But ideas not within a fixed medium are not within the scope of copyright.  Which is to say the yow-yowing of a fast talking pitchman.  Which the case calls ideas that are “still purely airborne.”  Or hot air if you will.  And even if written down, [i]n no case does copyright protection for an original work of authorship extend to any idea …[or] concept … embodied in such work.”  17 U.S.C. § 102.

To escape preemption, the state cause of action must assert rights different from those protected by copyright.  A Desny claim has that extra element — the agreement to pay for the use of an idea.  This implied agreement is a personal one between the parties and has nothing to do with the monopoly protection of copyright.  See Rokos v. Peck, 182 Cal. App. 3d 604, 617 (1986).  Implied-in-fact contracts are personal between the contracting parties and effective only between them.  Id. at 617.

“A copyright is a right against the world.  Contracts, by contrast, generally affect only their parties; strangers may do as they please, so contracts do not create ‘exclusive rights.’”  ProCD, Inc. v. Zeidenberg, 86 F.3d 1447, 1454 (7th Cir. 1996).  Which is to say an evesdropper not party to the contract could grab the idea and run with it.

Some More History

Defendants had been removing Desny cases to federal court and arguing preemption with some success.  Resulting in a law review article of course.  See Glen L. Kulik, Copyright Preemption: Is This the End of Desny v. Wilder?, 21 Loy. L.A. Ent. L. Rev. 1, 14 (2000).  And Worth v. Universal Pictures, Inc., 5 F. Supp. 2d 816, 822 (C.D. Cal. 1997) boldly held “[m]ovie screenplays, the subject matter at issue, are encompassed within the federal copyright law.  Therefore, Plaintiffs’ cause of action for breach of implied contract is preempted.”

But then a lowly district court held an implied-in-fact contract claim survived preemption.  “[T]he whole purpose of the contract was to protect Plaintiff’s rights to his ideas beyond those already protected by the Copyright Act…” Groubert v.  Spyglass Entm’t Group, No. CV 02-01803, 2002 U.S. Dist. LEXIS 17769, 2002 WL 2031271, at 4 (C.D. Cal. July 23, 2002).

And the Great Nimmer descended from on high and expressly penned an approvalSee Nimmer § 19D.03[c][2].

And all the copyright leaders and followers and get-out-of-the-way-ers prostrate themselves before the sacred writ of Nimmer.  Not least of which is the 9th Circuit.


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