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Idea Theft Case Allowed Proceed

In a case of “idea theft,” film industry defendants who argued the right to free speech protected them against a claim of stealing a screenplay that was later made into “The Purge” films were recently slapped down by the Ninth Circuit Court of Appeals (Jordan-Benel v. Universal City Studios Inc., et al., No. 15-56045 (9th Cir., 2017).

In 2011, screenwriter Douglas J. penned a screenplay entitled “Settler’s Day,” depicting a futuristic landscape of lawlessness and chaos, which he registered with the U.S. Copyright Office. Douglas’s agent submitted the screenplay to persons at United Talent Agency (UTA). After saying it would pass on the screenplay, UTA forwarded it to other clients of UTA, who allegedly adapted it into “The Purge.” The film and its sequel were released in 2013 and 2014, produced by Universal City Studios and four other production companies.

In 2015, Douglas filed a complaint for copyright infringement against UTA and the production company defendants, claiming breach of an implied-in-fact contract based on defendants’ implied agreement to compensate and credit him as a writer/creator should his idea be used. He alleged that defendants breached this agreement by using and profiting from his ideas without compensation or credit, seeking declaratory relief.

The defendants sought dismissal from the federal court under California’s anti-SLAPP statute, whose purpose is to deter lawsuits “brought primarily to chill the valid exercise of the constitutional rights of freedom of speech.” To prevail on an anti-SLAPP motion to strike, the defendant must show that the plaintiff’s suit arises from an act in furtherance of the defendant’s rights of petition or free speech. (SLAPP stands for Strategic Lawsuit Against Publication, and is most often used in the context of political activism.)

The Purge producers contended that Douglas’s claims arose from the “creation, production, distribution, and content of expressive works” which falls within the ambit of anti-SLAPP, because without it Douglas would have no claim. The district court didn’t buy it, and on appeal, neither did the Ninth Circuit. “It is defendants’ failure to pay [Douglas for his idea] that gives rise to the [breach of contract] claim, [which] is not an act in furtherance of free speech, so anti-SLAPP does not apply,” the court concluded.

Douglas argued, and the court agreed, that even if producing a popular film series were protected speech activity, his claim did not arise from that activity because it was not the specific wrongful act giving rise to his claim, but rather the failure to pay him.

The Ninth Circuit cited California Supreme Court doctrine in noting that because a claim is “triggered” by a protected speech activity—in this case the production and release of the film—does not mean that it arises from or is based on that activity for purposes of anti-SLAPP.

“The California Supreme Court has held that contract law may protect a person who submits an idea to others with the understanding that the idea is submitted in consideration for a promise of payment for its use.”

Under Ninth Circuit precedent, in order to state a claim for breach of an implied-in-fact contract based on the submission of a screenplay, or “idea theft,” a plaintiff must allege that: (1) he submitted the screenplay for sale to the defendants; (2) he conditioned the use of the screenplay on payment; (3) the defendants knew or should have known of the condition; (4) the defendants voluntarily accepted the screenplay; (5) the defendants actually used the screenplay; and (6) the screenplay had value. Douglas’s complaint contained these elements.

The implied promise to pay transforms the action from one arising under the Copyright Act to a contract action, the court said.

The court declined to rule on whether anti-SLAPP applied to any claims based on defendants’ failure to credit Douglas as a writer/creator of The Purge.Super Lawyers named Illinois business trial attorneys Peter LubinVincent DiTommasoPatrick Austermuehle and Andrew Murphy Super Lawyers or Rising Stars in the Categories of Class Action, Business Litigation and Consumer Rights Litigation. DiTommaso Lubin Austermuehle’s Illinois business trial lawyers have over thirty years of experience in litigating complex class action, copyright, non-compete agreement, trademark and libel suits, consumer rights and many different types of business and commercial litigation disputes including lawsuits between businesses or between shareholders and owners of the same business.  Our Winnetka, Hinsdale and Kennilworth business dispute lawyers handle emergency business law suits involving copyrights, trademarks, injunctions, and TROS, covenant not to compete, franchise, distributor and dealer wrongful termination and trade secret lawsuits and many different kinds of business disputes involving shareholders, partnerships, closely held businesses and employee breaches of fiduciary duty. We also assist businesses and business owners who are victims of fraud. You can contact us by calling (630) 333-0000 or our toll free number (877) 990-4990.  You can also contact us online here.