In a case closely watched by Hollywood legal types, the Ninth Circuit Court of Appeals recently reaffirmed the viability of stolen idea lawsuits. The case, which is a big win for the little guy, is Montz v. Pilgrim Films & Television, Inc., 2011 U.S. App. Lexis 9099 (May 4, 2011) (en banc).
This case is actually pretty important for anyone pitching a TV show or motion picture concept to a network, studio or production company.
The back story, sadly, is a fairly familiar one in tinseltown: someone pitches an idea around town, the studios pass, then, later, an arguably similar show ends up getting made. In this case, the plaintiffs, a Mr. Montz (a “parasychologist”) and his publicist, pitched a TV show idea around to a few places, including NBC about a team of paranormal investigators would try and use fancy scientific gadgets to document real life paranormal activity. Eventually, NBC passed. Three years later, after seeing a show on Sci-Fi Channel (which is owned by NBC) called Ghost Hunters, Mr. Montz filed a lawsuit against NBC and the production company NBC / Sci-fi hired to produce Ghost Hunters.
The way these cases normally work is that a plaintiff claims that there was a breach of an implied in fact contract, or a breach of confidence. In other words, the plaintiffs allege that they had an agreement with someone to the effect that if the plaintiffs shared their idea, and it turned out to be valuable and go somewhere, then the plaintiffs would be compensated. This is precisely why studios will often times refuse to even look at a pitch until you sign some kind of legal form — they want to get a written contract in place that negates these kind of nebulous “implied” agreements. These kinds of cases are often called Desny claims, after the seminal case decided by the California Supreme Court back in 1956, Desny v. Wilder, 46 Cal. 2d. 715 (Cal. 1956).
The issue in the courts has been whether Desny claims are preempted by federal Copyright Act of 1976. California state courts have permitted these kinds of lawsuits for years. However, more recently, the big studio lawyers have had some success in federal courts getting these kinds of lawsuits tossed out on the grounds that because these lawsuits relate to ideas, and because Copyright law also deals with ideas (albeit only ideas reduced to tangible form), that these kinds of lawsuits are preempted and prohibited by the Copyright Act (28 U.S.C. § 301(a)).
The district court in Montz held that Mr. Montz’s Desny claims were preempted by the Copyright Act. A three judge panel for the Ninth Circuit agreed. On rehearing en banc, the Ninth Circuit majority overruled the three judge panel, and struck a blow for anyone who ever fancies they have had an idea stolen in Hollywood. Reaffirming a prior 2004 decision, the Ninth Circuit held “that copyright law does not preempt an implied contractual claim to compensation for use of a submitted idea.” Montz, at *9.
There are probably two key take away message here: (1) it probably just became a little bit harder to get a pitch meeting without signing legal papers ahead of time (unless you’ve got the juice); (2) independent production companies, like Pilgrim Films & Television need to be really careful. Most of the studios and networks are pretty good about putting policies in place to prevent these kind of lawsuits; it is probably the smaller and medium sized production companies that need to worry the most.
It will be interesting to see if the studios/networks/MPAA seeks cert from the U.S. Supreme Court.
