Trademark Fraud for the "The Conjuring"

The Warner Bros. subsidiary isn't happy that the producer who sold rights to the forthcoming film then made a deal with Lionsgate for a TV show with the same title.

Next month, The Conjuring spooks its way into theaters. The supernatural thriller directed by James Wan is about two paranormal investigators -- Ed and Lorraine Warren -- who help out a family terrorized by a haunted house. The film garnered good buzz last week at the Los Angeles Film Festival, and Warner Bros. has high hopes for it.

But as the film studio prepares to frighten audiences, the deal that got the movie made has conjured its own scares in arbitration.

On one side is Warners subsidiary New Line, which claims that Tony DeRosa-Grund's Evergreen Media Group has acted in bad faith. Evergreen produced the film for New Line, but then made a second deal with Lionsgate for a Conjuring TV series. New Line is crying foul over the prospect of an entertainment property with the same title.

"New Line declines to comment on the lawsuit other than to say that it intends to vigorously protect its rights to the title of its film."

In turn, Evergreen believes that New Line should live with the express provisions of a contract drafted by studio lawyers. The defendant in the arbitration maintains that it has reserved rights for television and comic books and is upset with how New Line is potentially getting in the way of a Lionsgate series. Evergreen is eyeing a possible counterclaim, we hear.

In general, titles are tricky. They're not protected by copyright, and movie and TV agreements have a lot of technical language about rights and media, but usually address titles only in passing.

At the moment, the dispute is playing out behind closed doors at arbitration. However, New Line is opposing Evergreen's attempts to trademark "The Conjuring," and papers lodged earlier this month at the USPTO shed some light on the controversy. (See trademark opposition.)

According to New Line, the deal over The Conjuring was made on November 11, 2009 and included an "option quitclaim agreement" (OQA). Warners says that this agreement conveyed rights to exploit the property and that under the agreement, New Line has "the right to secure...trademark registration and protection thereof in all countries and territories where such protection is available."

New Line is making the case that Evergreen is not authorized under its agreement to register or use the mark. The studio also points to activity from DeRosa-Grund's company to support the notion that its actions weren't proper. As New Line argues, "That [Evergreen] approached New Line soon after filing the Applications to offer New Line a license for the Mark is evidence that [Evergreen] intended to use the Mark in connection with the Project in violation of the OQA and, thus, that [Evergreen’s] intent was not bona fide or in good faith."

New Line says that its production partner on The Conjuring has "committed fraud on the United States Patent & Trademark Office."

Evergreen is not taking these allegations lying down, of course.

The company believes that New Line is using tactics to stall Lionsgate by raising legal claims that will make the TV project uninsurable.  As it stands now, the dispute mainly centers on use of "The Conjuring" as a title but potentially goes beyond that. New Line's position is that Evergreen only has reserved limited rights that cover certain stories of the Warrens, but not others. The subject matter of the unproduced TV show could in fact trigger more legal hassling depending on what the series turns out to be.

"I have the utmost respect for Toby [Emmerich] and Richard [Brener] as well as the development executives over at New Line and that is why I decided to produce The Conjuring with them in the first place," says DeRosa-Grund.

Read More.... http://www.hollywoodreporter.com/thr-esq/new-line-claims-conjuring-partner-574065

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"The Bourne Identity" - Warner Brothers Escapes Lawsuit

After giving up the right to produce The Bourne Identity nearly 15 years ago, Warner Bros. won't face any additional punishment for this misjudgment. Last week, a New York judge refused to allow the studio to be entered as a defendant in a lawsuit three decades in the making.

The lawsuit comes from the widow of Anthony Lazzarino, who in the early 1980s operated a company called Windwood/Glen Productions that actually held film rights to the Robert Ludlum novel. The adaptation rights were then sold to Warners' predecessor, Orion Pictures, in exchange for a 3.75 percent interest of revenues and a presentation credit.

At the time, a movie starring Burt Reynolds as the title character was being planned. But that never happened, and in 1999, Warners allowed the rights to revert back to Ludlum, who then negotiated a deal with Universal Pictures. In 2002, the Matt Damon starrer came out and grossed more than $214 million worldwide. Three sequels were made.

Lazzarino sued and alleged that he was due a percentage of profits and credit. Eight years after filing the claim, and after Lazzarino died last June at the age of 88, the lawsuit is still going on. But it survives in a more modest form after a judge agreed with Warners that it should not be part of the litigation.

When Lazzarino held rights, he did so with Ludlum's literary agent, Henry Morrison. Together, they ran Windwood/Glen Productions until the two men had a falling out and reached a settlement with each other that gave Lazzarino sole control over Winwood.

Around the turn of the century, when Warners allowed rights to be reverted back to Ludlum and then those rights were sold to Universal, it was Morrison who helped broker the deal even though he was allegedly under some obligation per the settlement not to "interfere or diminish" Winwood's rights over Bourne Identity.

In 2005, Lazzarino sued the film companies as well as Morrison. He claimed that Orion had given Windwood/Glen a "right to match" any sale of film rights and that after Universal had come out with its film, he was contractually due a 3.75 percent interest and a presentation credit on any film "produced or caused to be produced by Orion."

After the original judge in the case in 2008, dismissed claims against the studios but allowed a breach of contract claim against Morrison to survive, nothing happened at all in the case for five years. Then suddenly, Lazzarino's widow looked to revive the lawsuit and add Warner Bros. back into it.

New York Supreme Court judge Marcy Friedman won't allow the case to go quite so far.

In her ruling last week, she concludes that the claim falls outside of the statute of limitations, pointing out that the "claim is barred as against the Warner Bros. defendants because they executed the last agreement with Ludlum, without preserving the right to match, on May 4, 1999, more than six years before the commencement of this action."

The judge lifts the stay as it pertains to Morrison, but because the Orion agreement only contemplated an Orion-produced film, she says, with separate remedies in the event that such a film was not made with Burt Reynolds' involvement, Lazzarino's widow can't claim a 3.75 percent interest or presentation credit from Universal's blockbuster film.

Read More... http://www.hollywoodreporter.com/thr-esq/warner-bros-escapes-lawsuit-bourne-565581

Law Offices of Jonathan Franklin
Open Evenings and Weekends this Summer
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'Dungeons and Dragons' Film Hasbro Not Playing Game We Own the Rights and Sues Warner Bros.

On Monday, the toy company filed a lawsuit against producer Courtney Solomon's Sweetpea Entertainment, alleging that it has no right to make a new film that exploits its "Dungeons and Dragons" brand.

Read the lawsuit here... http://www.hollywoodreporter.com/sites/default/files/custom/Documents/ESQ/Hasbro.pdf

Solomon produced the 2000 film version of Dungeons and Dragons and is reportedly working with Warner Bros. on another Dungeons & Dragons movie. That film is based on Chainmail, a board game from Dungeons & Dragons designer Gary Gygax.

But Hasbro has also been reported to have licensed a Dungeons & Dragons reboot to Universal Studios. So the company and its Wizards of the Coast subsidiary has filed a copyright infringement lawsuit against Sweetpea that seeks a declaration that it owns rights to the property and an injunction to stop the planned Warner Bros. film.

Warner Bros. is not a defendant in the lawsuit which also asserts false designation of origin, unfair competition and trademark infringement.

According to the complaint, Sweetpea acquired rights to the property by an agreement in 1994. As part of the agreement, Solomon's company got the right to do a sequel or prequel.

But the lawsuit states, "Sweetpea's claim of ownership of the theatrical motion picture rights in the Property is baseless because the Sequel Rights have reverted to Hasbro."

The complaint filed in California federal court goes onto say that an amendment to the 1994 contract provided that Sequel Rights would "revert on a rolling basis... on the earlier of (i) five (5) years from of (sic) the initial U.S. release or (ii) seven (7) years from final director's cut of the immediately prior picture."

Another provision dealt with the reversion of television rights to the project. Sweatpea produced two TV films including Wrath of the Dragon God for the SyFi Channel in 2005 and The Book of Vile Darkness last year.

"Despite initial plans to release the First TV Movie as a theatrical or non-theatrical sequel based upon the Picture, the production actually was released in the United States as a television motion picture," says the lawsuit. "Thus, the First TV Movie represented an exercise of the Television Rights and did not reset the Sequel Rights' five-year reversion clock."

Hasbro also cites the fact that Sweetpea paid $20,000 for the "Second TV Movie," an amount it says would have been much "greater... under the License for exercising the Sequel Rights" as well as explaining that this project "neither continued, contained, nor referred to any of the characters, storylines, settings or events from the Picture or the First TV Movie."

Now that Warner Bros. has reportedly gotten on board, Hasbro is looking to collect damages over the defendants "falsely claiming ownership of the Sequel Rights to WB."

Maura Wogan at Frankfurt Kurnit is the lead counsel for Hasbro in the case. Michael Weinsten at Lavely & Singer is local counsel who filed the complaint on Monday.

UPDATED:
“We have made three pictures so far, and we’re going to make more –including the tentpole project that is currently in advanced stages of development with Warner Bros," says Solomon in a statement.
“This is nothing but shameless opportunism on the part of Hasbro, an effort to use the Court and the legal process in an attempt to delay the project,” continued Solomon.  “We intend to deal with them quickly and firmly and we are confident we will prevail – just as we did in the 1990’s, when the last legal challenge ended with a confirmation of Sweepea’s rights."

Read More... http://www.hollywoodreporter.com/thr-esq/hasbro-sues-stop-warner-bros-522262

Warner Brothers Sued by Filmaker Mike O'Dea for "The Ghostman", identical elements from a "Hobbits" lawsuit.

Mike O'Dea says he's been working on a film with "identical" elements since 2010 and is drawing inspiration from a "Hobbits" lawsuit.

From the department of unintended consequences comes a lawsuit against Warner Bros. over The Ghostman, a planned film adaptation of Roger Hobbs' novel about a fixer who aids bank robbers in disappearing after botched heists.

Warners acquired film rights to the novel last year in a six-figure deal, and it's being developed by Kevin McCormick's Langley Park Pictures (The Gangster Squad). The film project hasn't advanced very far yet but it has already drawn a complaint in Massachusetts federal court from a screenwriter who says he's also been working on a heist thriller movie titled Ghostman.

Mike O'Dea, the plaintiff, alleges copyright infringement and violation of the Lanham Act from Warners' "use of the identical theme, central character and title."

Never mind that the film hasn't come out. O'Dea, who says he is in post-production on his own work, is pointing to Warners' recent lawsuit to stop a film with the word "Hobbits" in the title.

Last November, Warners sued Global Asylum, makers of the low-budget "mockbuster" Age of the Hobbits for attempting to trade off the release of its own The Hobbit: An Unexpected Journey. The following month, a federal judge enjoined the distribution of the defendant's film despite arguments that "Hobbits" existed separately from J.R.R. Tolkien's creation and was protected by fair use.

As Isaac Newton's third law of motion states, for every action there is a reaction.

Hollywood studios are well accustomed to defending lawsuits over stolen ideas, but almost always, it happens after some film or TV show has come out. Now, the lesson that O'Dea's lawyer Timothy Perry is drawing from the Hobbit case is that it's open season for lawsuits over yet-to-be released works.

According to O'Dea's lawsuit, Warners was sent a cease-and-desist letter but never responded.

"Warner Brothers failed to respond despite previously filing a similar suit against a competitor for use of the term 'Hobbit' in the title to a film shortly before the release of one of its J.R.R. Tolkien movies," says the lawsuit, which then goes on to reprint in boldface the studio's victory statement about prevailing against Asylum's "cynical business model... designed to profit from the work of others."

O'Dea (suing under his real name Michael Kenney)

Read Full Complaint ... http://www.scribd.com/doc/138876083/Ghost-Man

Read More... http://www.hollywoodreporter.com/thr-esq/warner-bros-sued-by-filmmaker-450165

Who holds lucrative game rights? Warner Bros. or Tolkien Estate.

                 The estate of author J.R.R. Tolkien is testing the principle, "You can't be sued for suing."

In November, the estate and book publisher HarperCollins filed an $80 million lawsuit against Warner Bros., its New Line subsidiary and Saul Zaentz Co. -- which holds the rights to The Hobbit and The Lord of the Rings --  looking for a federal judge to declare that the defendants had overstepped their rights by looking to exploit Hobbit/Rings online slot machines and games.

Earlier this month, Warner Bros. brought counterclaims that allege the Tolkien estate's "repudiation" of contractual rights has cost Warners to miss out on millions of dollars of licensing opportunities.

On Thursday, the estate asked a judge to dismiss Warners' move, saying the studio is attempting to dress up an inappropriate claim for malicious prosecution.

Warner Bros., represented by attorney Daniel Petrocelli, says it and Zaentz are the successors-in-interest to merchandising and other rights to Hobbit and Lord of the Rings from a United Artist agreement from 1969. Together, the studios say they have been exploiting the rights for decades and that 16 years ago, Zaentz's rights to online video games were confirmed. Now, there allegedly has been an about-face.

Whether or not that's true, the estate, represented by attorney Bonnie Eskenazi, believes that the objectionable activity "springs from an attempt to enforce the relevant contract," not to repudiate it.

The problem, as Eskenazi spells out in her motion to dismiss (read in full here...  http://www.scribd.com/doc/133001138/Hobbit-Repudiate  ), is that communications made in anticipation of litigation are privileged and can't serve as the basis for a claim. Eskenazi says she brought up the alleged defect in response to the January counterclaims, and as a cure, Warner Bros. simply replaced "challenging Warner's exploitation" to "repudiation."

Read More... http://www.hollywoodreporter.com/thr-esq/tolkien-estate-challenges-warner-bros-431720

The Owner Superman Rights is Warner Brothers, Judge confirms, However...

However, the ruling suggests that more litigation could be coming.

Warner Bros. scored another win in the war over Superman rights Wednesday when a federal judge confirmed the enforceability of a 2001 agreement between DC Comics and the estate of Superman co-creator Jerome Siegel.

The decision follows a Ninth Circuit Court of Appeal decision in January that held that contrary to the Siegel estate's pursuit of terminating a copyright grant, the Siegels made a deal 12 years ago to settle a war over rights.

However, the decision by U.S. judge Otis Wright to confirm the continued enforceability of the agreement points to a lawsuit that seems likely to come from the Siegels and their lawyer, Marc Toberoff.

Toberoff argued that after the studio agreed to a deal in 2001, "DC anticipatorily breached by instead demanding unacceptable new and revised terms as a condition to its performance; accordingly, the Siegels rescinded the agreement, and DC abandoned the agreement."

Judge Wright admits, "Subsequent events may have affected the present enforceability of that contract, as by a material breach followed by an effective rescission of the deal."

But he adds, "The Siegels’ breach and repudiation defenses do not affect the enforceability of the agreement, but rather constitute grounds for termination or a breach-of-contract action."

Read Full Ruling... http://www.scribd.com/doc/131715688/gov-uscourts-cacd-166872-235-0

The judge notes that up until now, the Siegels haven't attempted a rescission. Such an event can only happen if the rescinding party gives proper notice, and here the judge finds "as a matter of law" that letters sent in the months of 2002 "do not constitute proper notices of rescission" as "neither letter even recognizes a contract at all, much less expresses the intent to rescind the contract."

The judge further notes that the heirs might make a proper case by arguing in a separate breach-of-contract lawsuit that Warners failed "to provide a royalty statement to the Siegels by March 31, 2001, as agreed in the October 19, 2001 Letter, and failed to pay or offer to pay the Siegels their royalties.”

Such a claim might have big statute of limitation hurdles, but given the stakes and the never-ending madness over Superman rights, it won't be surprising to see such a lawsuit filed soon.

Judge Wright doesn't entirely dispense with the case because he says there is still the "lingering issue of what to do with Superboy and the early Superman ads."

Warners is safe as it prepares to release its big-budget Superman reboot Man of Steel, directed by Zack Snyder and produced by Christopher Nolan, but there may be more fussing on works like the TV series Smallville, before the case is firmly wrapped up.

Read More... http://www.hollywoodreporter.com/thr-esq/judge-confirms-warner-bros-owns-430323

Claims from Warners Brothers Tolkien Estate Breached 'Hobbit' Contract

The studio alleges that repudiation of online game rights not only cost it millions of dollars but also decreased exposure for "Hobbit" films.

Warner Bros. is going after the estate of author J.R.R. Tolkien hard in litigation over online slot machines and games tied to the lucrative Lord of the Rings and Hobbit properties.

In November, the Tolkien estate and its book publisher HarperCollins filed an $80 million lawsuit that claimed that Rings/Hobbit producers including Warner Bros. had infringed the copyright in the books and breached a contract by overstepping their rights.

Rings/Hobbit rightsholder Saul Zaentz Co. already made its own counterclaim that the Tolkien estate has breached an implied covenant of good faith and fair dealing by going down this road.

Now, it's Warners' turn.

The studio, represented by pit bull attorney Daniel Petrocelli, is striking back at the estate of the revered fantasy writer, who died in 1973, with amended counterclaims that allege the Tolkien estate's repudiation has cost Warners to miss out on millions of dollars of licensing opportunities. The studio demands damages for the alleged breach of contract.

Read Court Filing here... http://www.hollywoodreporter.com/sites/default/files/custom/Documents/ESQ/hobbitcounterclaim.pdf

Warners says it and Zaentz are the successors-in-interest to merchandising and other rights to The Hobbit and The Lord of the Rings from a United Artist agreement from 1969. The studio says it has been exploiting the rights for some time, and that 16 years ago, the parties confirmed that Zaentz had rights to online video games.

Attorney for Tolkien estate, responds:
                        "The defendants’ amended counterclaims are nothing more than an effort to sue the Tolkiens and HarperCollins for suing them. They are entirely without merit and are a classic example of studio “bullying tactics.”  The Tolkiens and HarperCollins filed this lawsuit in order to force WB and Zaentz to live within the boundaries of the contract to which they agreed. WB’s and Zaentz’s amended counterclaims are simply an attempt to punish the Tolkiens and HarperCollins for having the nerve to stand up to the studios and tell them that they can’t take more rights than were granted to them by contract. Luckily, the law protects people like the Tolkiens and HarperCollins from these kinds of intimidation tactics."

Read More... http://www.hollywoodreporter.com/thr-esq/warner-bros-claims-tolkien-estate-428390

Judge Won't Sanction Attorney of Superman Creators' Heirs

There was "no deliberate attempt to mislead," a judge rules in turning down Warner Bros.' efforts to punish Marc Toberoff for alleged discovery misconduct.

Marc Toberoff, the attorney representing the estates of Superman co-creators Jerry Siegel and Joe Shuster, got some welcome news after a disappointing few months in battles over rights.

On Friday, U.S. District Judge Otis Wright has denied Warner Bros.' bid for sanctions against Toberoff.

The studio's DC Comics subsidiary demanded that Toberoff be penalized for how he has shielded documents on the basis of attorney-client privilege in the discovery process.

But the judge references some of the drama over many of the documents in question.  Toberoff had documents stolen from him, and after cooperating with authorities in the investigation of the theft, an appeals court ruled that Warners could use them.

Wright said he has reviewed the vast discovery records of this case.

"The Court comes away from the investigation with the view that DC's Motion for Evidentiary Sanctions is really just a rehashing of the tortured course of discovery in these Superman matters," he wrote.

The judge said he was "deeply troubled" by Toberoff's failure to update privilege logs but determined there was "no deliberate attempt to mislead."

Here's the full ruling... http://www.scribd.com/doc/129359588/Sanctions

Read More... http://www.hollywoodreporter.com/thr-esq/judge-wont-sanction-attorney-superman-426989

Warner Bros. Defends Allegations It Abused Anti-Piracy Tool

In court papers filed this week, the studio reveals its views on whether fair use needs to be considered when causing files to be removed from the Internet.

Very few actions cause more controversy online than when a copyright holder causes the takedown of material argued to be completely legitimate. For example, an uproar ensued last month when Lionsgate Entertainment registered a takedown notice on a remix video “Buffy vs Edward: Twilight Remixed." The video was removed from YouTube for a short time. Before the mash-up of Twilight and Buffy the Vampire Slayer was reinstated after widespread news attention, the creator of the video cried foul since the video was cited as a quintessential example of fair use by the U.S. Copyright Office.

Since then, there have been efforts to collect a database of false DMCA takedowns. Meanwhile, there's been a legal debate over whether copyright holders must consider fair use before sending takedown notices.

Last month, in a long-running case, a federal judge paved the way for a trial over Universal Music's takedown of a video showing a toddler dancing to the 1984 Prince hit "Let's Go Crazy."

The case, brought by Stephanie Lenz, is perhaps most famous for an early decision that suggested that copyright owners must consider fair use before sending takedown notices. In describing the good and the bad of a judge's recent ruling, attorneys from the Electronic Frontier Foundation -- representing Lenz -- had this to say in a blog post:

        "The ruling provided further affirmation, if it were needed, that the DMCA does not give copyright owners the right to simply take down content without first considering fair use. Of course, that was already the law. But last week’s ruling also clarified that that "consideration" means making an actual legal determination. Universal had argued that it was enough to consider some facts that might be relevant to a fair use analysis. No cigar, said the court: a content owner must make an effort "to evaluate the significance of such facts" in the context of the fair use doctrine. That’s good news for the Internet – content owners can no longer pretend that the DMCA takedown process does not require actual thought and judgment."

In a notice of supplemental authority on Wednesday, the studio said that while it was true that in 2008, a federal judge in the Lenz case had ruled that a copyright owner must evaluate fair use before sending a takedown notice, the studio added this:

               "The Lenz Court later clarified that it was referring only to 'extremely rare' cases and that 'the Court did not hold that every takedown notice must be preceded by a full fair use investigation."
     
Warners attorneys also wrote that the latest Lenz ruling in January provided more affirmation of its position:
              "Following Ninth Circuit precedent, the Lenz IV decision firmly holds that a 'mere failure to consider fair use would be insufficient to give rise to liability under §512(f). It thus rejects Hotfile's reading of Lenz I, and reaffirms Plaintiffs' position that a 512(f) claim requires evidence that the defendant had actual, subjective knowledge that it was sending a takedown notice on a noninfringing file."

Here's the full brief: http://www.scribd.com/doc/124574397/512f

Warner Bros says that takedown victims have to show "actual, subjective knowledge," whereas the EFF says that takedown victims can demonstrate a copyright owner "willfully blinded itself to the potential application of the fair use doctrine."

Read More... http://www.hollywoodreporter.com/thr-esq/warner-bros-defends-allegations-abused-419756

Director Hal Needham Sues Warner Bros. in Growing Home-Video Royalty Flap

Five studios have been sued in a class-action lawsuit alleging underreporting of home-video revenue.

Director Hal Needham has sued Warner Bros. in an expanding class-action case targeting the way studios calculate home-video royalties for profit participants.

Needham, the director of Cannonball Run, Smokey and the Bandit and Hooper, filed suit Tuesday in Los Angeles Superior Court claiming that he's been shortchanged revenue from the latter film due to the Warner Bros. practice of calculating his profit participation using only 20 percent of the home-video revenue received by the studio.

Read Full Complaint here: http://www.hollywoodreporter.com/sites/default/files/custom/Documents/ESQ/Needham.pdf

The move comes a week after 20th Century Fox, Paramount, Universal and Sony were sued by talent whose decades-old contracts allow them to share in the revenue from hit films. Stanley Donen (Lucky Lady), Charles Bronson (Hard Times) and Colin Higgins (Foul Play and The Best Little Whorehouse in Texas) are the lead plaintiffs in the other cases. Read those lawsuits:
http://www.hollywoodreporter.com/sites/default/files/custom/Documents/ESQ/Twentieth_81.pdf
http://www.hollywoodreporter.com/sites/default/files/custom/Documents/ESQ/Paramount_79.pdf
http://www.hollywoodreporter.com/sites/default/files/custom/Documents/ESQ/Universal_80.pdf
http://www.hollywoodreporter.com/sites/default/files/custom/Documents/ESQ/Sony_82.pdf%20

studios began paying talent based on a 20-percent royalty rate in the early 1980s as VCRs became popular. The lawsuits have been filed by profit participants whose contracts predate the 1980s, so they argue that they should be entitled to share in 100 percent of home-video revenue.

Warners' accounting practices "have allowed WB to wrongfully withhold a substantial amount of money it receives from home video distribution at the expense of Plaintiff and the Class," the Needham lawsuit states.

Exact damages are not alleged, but the claims could total in the millions of dollars.

Read More: http://www.hollywoodreporter.com/thr-esq/director-hal-needham-sues-warner-416688