Metropolitan News-Enterprise


Friday, June 4, 2010


Page 1


Court Rejects Copyright Action Against SyFy Channel


By STEVEN M. ELLIS, Staff Writer


The Ninth U.S. Circuit Court of Appeals yesterday declined to reinstate a lawsuit accusing NBC Universal and the former Sci-Fi Channel of stealing the idea for the television show “Ghost Hunters.”

A three-judge panel agreed with the district court that state law claims for breach of implied contract and breach of confidence were preempted by federal copyright law because the rights asserted under them were equivalent to the exclusive rights of copyright holders.

Parapsychologist Larry Montz and publicist Daena Smoller claimed they gave NBC screenplays, videos and other materials from 1996 to 2003 in an offer to partner to develop Montz’s idea for a new reality television show following a team of “paranormal investigators.”

NBC told them it wasn’t interested, Montz and Smoller alleged, but then partnered with Craig Piligian and Pilgrim Films & Television to produce a series based on the materials on the network now known as SyFy. “Ghost Hunters,” which premiered in 2004, stars Jason Hawes as the leader of a team of investigators who travel across the country to study paranormal activity.

Montz and Smoller filed suit in 2006 against NBC Universal, Pilgrim Films, Piligian and others contending the defendants engaged in unauthorized use of their materials in violation of Montz and Smoller’s exclusive rights under federal copyright law. They later added Universal Television Networks as a defendant.

The plaintiffs claimed that the defendants, by producing and broadcasting “Ghost Hunters,” breached an implied agreement not to use their ideas and concepts without their express permission and to share profits and credit. Montz and Smoller also claimed the defendants breached their confidence by taking their ideas, exploiting them and then profiting to their exclusion.

U.S. District Judge Florence-Marie Cooper of the Central District of California, since deceased, ruled that Montz and Smoller’s state law claims were preempted by 17 U.S.C. § 301(a), and granted the defendants’ motion to dismiss the breach-of-implied-contract and breach-of-confidence claims for failure to state a claim.

Sec. 301(a) preempts state law claims that assert rights in “works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by [17 U.S.C. §§ 102 and 103]” if those rights are “equivalent” to the exclusive rights of copyright owners set forth in Sec. 106. That statute grants copyright holders the exclusive right to use original works or authorize another to do so.

Montz and Smoller voluntarily dismissed their copyright claim with prejudice and appealed Cooper’s ruling on their state law claims, but the Ninth Circuit affirmed in an opinion by Judge Diarmuid F. O’Scannlain.

Noting that the only issue presented was whether Montz and Smoller’s rights under the state law claims were equivalent to their exclusive rights as copyright owners, he wrote:

“The gravamen of the claim is that the defendants used the plaintiffs’ work, without authorization, to create (and then profit from) a new television program. The rights asserted by the plaintiffs under the implied contract are thus equivalent to the rights of copyright owners under § 106.”

O’Scannlain rejected Montz and Smoller’s argument that their right to receive a share of profits and credit for the show’s concept was an “extra element” that distinguished their breach-of-implied-contract claim from a copyright claim.

Montz and Smoller pointed to the Ninth Circuit’s 2004 opinion in Grosso v. Miramax Film Corp. 383 F.3d 965, where the plaintiffs brought a type of breach-of-implied-contract claim recognized by the California Supreme Court in Desny v. Wilder (1956) 299 P.2d 257 and the Ninth Circuit concluded that the defendants’ implied promise to pay for a movie idea constituted an extra element for preemption purposes.

O’Scannlain, however, said Grasso was distinguishable because the breach of the alleged agreement there violated the plaintiff’s right to a sale, while NBC and the other defendants’ alleged breach violated only Montz and Soller’s exclusive rights to use and authorize use of their work.

“[T]he plaintiffs’ expectation of profits and credit was premised on the fact that they would retain control over their work, whether in partnership with the defendants or not,” he said. “The plaintiffs’ right to receive a share of the profits and credit is thus merely derivative of the rights fundamentally at issue: the plaintiffs’ exclusive rights to use and to authorize use of their work.”

O’Scannlain also said that Cooper did not err in declining to allow the plaintiffs to amend their complaint, explaining that “no allegation of other facts consistent with the complaint could possibly cure” the preemption problem. He said Montz and Smoller could add the extra element necessary to transform the nature of their action by alleging that they offered their work for sale, but he noted that such an allegation would run contrary to statements in their complaint that they offered only to partner with NBC.

Judge Richard C. Tallman and U.S. District Judge Joan Humphrey Lefkow of the Northern District of Illinois, sitting by designation, joined O’Scannlain in his opinion.

Montz and Smoller were represented on appeal by Girardi | Keese partner and current State Bar President Howard B. Miller, who could not be reached for comment. Joseph C. Gjonola and Graham B. LippSmith of Girardi | Keese also represented the plaintiffs.

Katten Muchin Rosenman partner Gail Migdal Title, along with Joel R. Werner and Gloria C. Franke, represented the defendants. Title told the MetNews that her clients were “pleased the Ninth Circuit made clear that not every pitch falls within Desny and that plaintiffs can’t avoid preemption by using the label ‘breach of contract.’”

The case is Montz v. Pilgrim Films & Television, Inc., 08-56954.


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