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"If a lot of people love each other, the world would be a better place to live."

Johnny, The Room.

Wiseau Studio, LLC et al. v. Harper et al., 2020 ONSC 2504 (CanLII)

(CanLII case link)

A failed lawsuit against an amateur Ottawa-based documentary team leaves Tommy Wiseau - the eccentric writer, director, producer, and star of the cult classic The Room - on the hook for $550,000 USD in compensatory damages and $200,000 CDN in punitive damages.

FACTS

The case begins in 2011 when the defendants sponsored a screening of Wiseau's The Room in Ottawa and paid for the star's attendance. The Room is a cult-hit, known for being so uniquely terrible that it is transfixing. Its one-of-a-kind strangeness has inspired a dedicated subculture and fanbase. The film is often screened before jeering and rambunctious audiences which, from time to time, Wiseau will attend to meet fans, answer questions, sell merchandise, and so forth. Such appearances help fuel the enduring interest in the 2003 film, as does the curio of Wiseau's personality and his elusive biography (e.g. Wiseau refuses to reveal his birth name, his birth place, or how he financed his film).

Making the movie

In 2011, the defendants raised the idea to Wiseau of making a documentary about The Room and its peculiar fandom. Initially, Wiseau was supportive of the project, and agreed to participate. Soon after, the defendants began pre-production purchases and hires. However, about a month in, they received an email from a “John” on behalf of Wiseau, withdrawing the invitation to participate.

The defendants, nonetheless, pressed on and spent the next 4 and half years working on their documentary. They interviewed most of the actors from the film, and investigated Wiseau’s background, which included traveling to Europe and tracking down his origins in Poland.

They invested approximately $74,000 of their own money, and raised $26,000 through Kickstarter. The product of their labour was the 109 minutes-long documentary Room Full of Spoons - its title a reference to the audience tradition of hurling plastic spoons at the screen during showings. The documentary contains about 7 minutes of clips from The Room, all of which are short and played with commentary.

Wiseau's complainants

In 2015, although the documentary was not yet complete, Wiseau began to attack it. He filed a complaint with Kickstarter alleging that the defendants had stolen footage and were making false statements about him. The defendants attempted to negotiate a license agreement with Wiseau. However, discussions became unproductive when Wiseau demanded a large sum and “Final-Cut Privileges”.

Wiseau continued to publicly criticize the documentary and its makers, notably on YouTube in a series of videos titled "Shame on You." He claimed the documentary was disrespectful, and a copyright and trademark infringement. 2

After viewing a "courtesy copy", Wiseau, through an intermediary "Raul", took issue with references to his origins, original name and birth date, the amount of time devoted to his family in Poland, reference to a California civil court action against him for fraud, and claims by a Sandy Schklair, credited as script supervisor of The Room, that he actually directed 90% of the film. Further, he complained that the documentary was “too negative” and said it “could be framed with more positivity by at least 60 percent.”

In 2016 and early 2017, Room Full of Spoons was screened at 10 film festivals in Europe and North America. Wiseau threatened legal action against screenings, which resulting many being cancelled.

In 2017, the defendants were in discussions with Gravitas Ventures, LLC to complete a distribution agreement for their documentary. Gravitas hoped to distribute it around the release of the film The Disaster Artist, a Hollywood film about the creation of The Room starring well-known Hollywood actors (notably: James Franco, Seth Rogan, Zac Efron, Sharon Stone, and Bob Odenkirk). The agreement was not concluded due to legal steps taken by Wiseau in 2017.

The 2017 injunction

In June 2017, Wiseau threatened to bring an injunction application unless the film's release was postponed by two weeks. The defendants agreed to postpone release as “a gesture of good faith” in order to continue to pursue a settlement.

Rather than negotiating, Wiseau brought a motion seeking an injunction to prevent the release of Room Full of Spoons. Wiseau's lawyers gave a few hours’ notice to a lawyer in Ottawa who had acted as a corporate solicitor for the defendants in the past. As that lawyer could not accept service, the motion proceeded ex parte.

While the injunction was in effect, James Franco's The Disaster Artist was released. During that time, the defendants were unable to complete their agreement with Gravitas due to the injunction. Nor were they able to screen the documentary, distribute DVDs, or otherwise release copies while the litigation continued.

This created problems for them with those who had provided money supporting the project on Kickstarter, and who had expected to receive copies of the documentary in return for their investment. Some contributors asked for their money back. Social media platforms promoting the documentary were bare, several interview requests could not be accepted, which "[created] a cloud over the film."

An expert calculated the damages by analyzing the revenues of other documentaries that were released in the wake of linked feature films, finding that Room Full of Spoons would likely have earned revenues of approximately $1.1 million USD , of which the defendants would have received about $660,000 USD.

The injunction is lifted

In November 2017, the injunction was lifted, one month before the theatrical release of The Disaster Artist. In lifting the injunction, Koehnen J. found that the Wiseau fell seriously short of the sort of disclosure required for an ex parte proceeding. It was found that Wiseau misled the court by portraying himself as a "serious filmmaker", and failing to disclose that "The Room’s fame is not because it is a serious film, but because it is terrible." Koehnen J. observed that "people attend the film to mock it, not 3

to admire it." Further, Wiseau misled the court by falsely relating Room Full of Spoons content to the court. Moreover, Wiseau “did not draw the court’s attention to the fact that he would not lose exclusivity of copyright if the defendants’ use of excerpts from The Room amounted to “fair dealing.”

Due to the material non-disclosure by the plaintiffs, Koehnen J. awarded costs to the defendants on a substantial indemnity basis in the amount of $97,034.68, inclusive of disbursements and taxes.

ISSUES AND ANALYSIS

Wiseau Studio LLC and Wiseau (doing business as Wiseau-Films) made several claims against the defendants, all of which were rejected by Schabas J. of the Superior Court.

Breach of copyright

Standing

The starting point of a copyright case is to determine who owns the copyright. Schabas J. found that Wiseau owned the copyright to The Room despite an apparent misstatement by in the plaintiff's pleadings as to which of Wiseau's companies had been assigned the copyright. Wiseau's statement of claim stated that Wiseau Studio LLC is “the copyright owner in the plaintiffs’ works at issue.” However, the statement of claim attaches also stated that the owner of the copyright is Wiseau-Films. The defendants, thus, denied the assignment to Wiseau Studio LLC, and put the burden on the Wiseau to prove the assignment. On this point, no evidence was led by the plaintiffs that Wiseau Studio LLC was indeed assigned the copyright to The Room.

Schabas J, nonetheless, gave Wiseau standing, commenting, "it would seem odd result, that the claim should fail because the creator of the work…has pleaded he has assigned the copyright to the other plaintiff but has failed to prove it." Schabas J cites subsection 34.1 of the Copyright Act in resolving this issue, which provides that, in the absence of assignment, the maker of the work is presumed to be the owner of the copyright.

Substantial taking

The next step is to ask whether the defendant’s use of The Room constituted a “substantial” taking from the copyrighted work. Schabas J finds that it did. Although, Room Full of Spoons did not seek to replace or copy The Room, the clips used were essential central to the film.

Fair dealing exception

Schabas J found that use of The Room fell within the "fair dealing" exception. In order to make use of this exception, the defendants had to satisfy several criteria:

First, they must properly attribute the copyrighted material to its copyright owners as per section 29 of the Copyright Act. Schabas J. found that the attribution requirements were clearly met.

Second, they must demonstrate that dealing was for one of the allowable purposes listed in Copyright Act under section 29.1 or 29.2. This branch is considered relatively easy to satisfy, with most of the heavy-lifting occurring in the final stage. Schabas J. held that the documentary 4

was created for the allowable purpose of critique. In the case of a documentary, whether or not it may be regarded as a “tabloid-style exposé” or a “hit piece,” has little to do with whether the first step of fair dealing has been met.

Lastly, the defendants must show that the dealing was fair.

On this final branch, Schabas J. ruled that the dealing was fair on the basis of the six factors provided by the Supreme Court in CCH Canadian Ltd. v. Law Society of Upper Canada.

1. Purpose of the dealing

The purpose of the documentary and its use of the plaintiffs’ material are to provide review, critique and information about The Room, the phenomenon it has created, and its creator.

Schabas J. noted that, "the copying was not for a commercial purpose but simply to make a documentary; the defendants had no expectation when making the documentary that they would profit from it, nor did they appropriate The Room to their benefit."

2. Character of the dealing

The use of the clips for the purpose of commentary is a character of dealing that is appropriate and supports a conclusion that the dealing was “fair.”

3. Amount of the dealing

"While the documentary’s use of footage from The Room is not trivial, it is also not excessive". Clips constitute less than 7% of the documentary. The longest clip is 21 seconds.

Further, Room Full of Spoons has a number of components and is not just about The Room or copyrighted material. Rather it takes a wider scope than simply the film itself, and informs viewers about the experience and culture surrounding its fans.

4. Alternatives to the dealing

This factor considers whether there is a non-copyrighted equivalent of the work that could have been used instead of the copyrighted work to achieve the objectives of the user.

"In this case, this factor has little application." Room Full of Spoons is about The Room and Wiseau. Schabas J. noted that "[t]here is no alternative to the copyrighted material to make the points that are made." Moreover, the facts demonstrate that it was impossible for the defendants to obtain licenses without giving up editorial control, thus depriving them of a reasonable alternative.

5. The nature of the work

This factor considers the nature of the copyrighted work, and the extent to which it has already been disseminated. 5

The Room has been widely available for close to two decades, and its clips are available free online. This factor also favours the defendants.

6. Effect of the dealing on the work

This factor considers whether the reproduced work is likely to compete with the market of the original work.

Schabas J. does not view Room Full of Spoons as an alternative to The Room. On the contrary, the documentary is likely to generate interest in The Room, as demonstrated by the fact that festivals and cinemas have been interested in playing double features.

All factors suggest the dealing was fair. Accordingly, the defendants were able to rely on the fair use exception to infringement.

Breach of Wiseau’s moral rights under the Copyright Act

Wiseau claims that Room Full of Spoons violates his moral rights by:

1. using low-quality video clips of The Room unlawfully “ripped” from a Blu-ray disc or from YouTube; and 2. by being associated, against his will, with the film, which he finds “reprehensible."

Moral rights involve a consideration of both the subjective views of the plaintiff and objective evidence. They are not determined solely on the feelings or opinions of the creator of a work.

On the first complainant, no evidence was led on the quality of the clips, and whether they were sub- standard. In addition, Schabas J. comments, that since Wiseau would not license the use of any clips without acquiring full editorial control, Wiseau "might have only himself to blame for his view that his work was somehow not presented in the way he would have liked."

On the second complainant, Room Full of Spoons makes clear that Wiseau did not cooperate, let alone collaborate, in the making of it. In fact, it was promoted as “the documentary Mr. Wiseau does not want you to see.” Viewers would not believe that Wiseau was promoting or endorsing the documentary. This is despite limited promotional material created by the defendants that featured images of Wiseau's character from The Room.

Further, Schabas J. notes that even if Wiseau is associated with Room Full of Spoons, it does not prejudice his honour and reputation. Schabas J comments that " [t]o the extent the documentary portrays Wiseau as someone who made a terrible movie, there is nothing new about that. The Room may be a somewhat popular cult classic, but that is because it is so bad, and made badly by Wiseau." In addition, The Disaster Artist, which Wiseau authorized, calls The Room the “greatest worst movie” in its tagline, suggesting Wiseau endorses, or at least acknowledges, his film's reputation.

Misappropriation of personality

Although no firm definition has been adopted in Canada, this tort is generally established where one’s personality has been appropriated in a manner “amounting to an invasion of his right to exploit his 6

personality by the use of his image, voice or otherwise with damage to the plaintiff." This analysis is performed with regard to concerns for the public interest and freedom of expression.

Schabas J. notes that Wiseau enjoys "being a man of mystery", and he uses that image to promote interest in his films. It is the very mystery that he cultivates that is investigated by the documentary. On that point, in cross-examination Wiseau said that he thinks he is “famous.” Schabas J. likens this case to Gould Estate - a case concerning the estate of celebrated Canadian pianist Glenn Gould - in which it was held that a biography in which the celebrity is the subject would not be within the ambit of this tort. Schabas J. comments that "[w]hile Gould – an acknowledged musical genius – and Wiseau may have little in common, they both have fame and are persons of interest to their followers." In any event, Wiseau did not lead any evidence of damage to his personality which are necessary to make out the tort.

Passing Off

There is a 3-part test for passing off:

1. the existence of goodwill; 2. deception of the public due to a misrepresentation; and 3. actual or potential damage to the plaintiff.

Schabas J. found that Wiseau met the first branch but, failed on the latter two. First, there were no misrepresentations by the defendants that would mislead the public. It is clear that Room Full of Spoons is not the work of the plaintiffs, or in any way endorsed by them. Second, no evidence was presented of any actual or potential damage to the plaintiffs arising from the limited use of images of Wiseau or from The Room.

Intrusion Upon Seclusion

This tort is made out where one intentionally intrudes, physically or otherwise, upon the seclusion of another or their private affairs or concerns, if that invasion of privacy would be highly offensive to a reasonable person.

This tort is generally limited to “deliberate and significant invasions of personal privacy” such as “intrusions into…one’s financial or health records, sexual practices and orientation, employment, diary or private correspondence that, viewed objectively on the reasonable person standard, can be described as highly offensive.”

In this case, no personal details of this kind were disclosed by the defendants. Rather, what was disclosed was information that was available from public sources, which is how it was obtained it by the defendants. Although, Wiseau may be sensitive about this information, disclosure cannot be described as “highly offensive.”

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The Defendants' counterclaim

The earlier ruling of Koehnen J. found that the injunction preventing Room Full of Spoons' release was wrongly granted as a result of Wiseau misleading the court.

Damages for a wrongly granted injunction are assessed on the same basis as damages for breach of contract. Causation, foreseeability and mitigation provide the legal framework for the damages analysis.

It was noted that the injunction was issued at a commercially critical time. Schabas J reflects that "[m]ost documentaries are not commercial successes. Few are expected to make money, and the defendants worked on the project without such an expectation." The defendants led evidence that Room Full of Spoons would have earned, conservatively, $660,000 USD had the documentary been released in 2017. Although, the injunction was lifted a month prior the release of The Disaster Artist, it prevented the defendants from completing a distribution deal, and from promoting their film around the "buzz" of the larger film.

Schabas J. did reduce damages in acknowledgement that a market for Room Full of Spoons will, nonetheless, exist when it is finally released. Schabas J estimating that Room Full of Spoons would likely earn something similar to the low end of the expert witness's comparable documentary, which is about US$110,000, and reduce damages accordingly.

The defendants’ counterclaim also sought damages for defamation resulting from Wiseau’s “Shame on You” videos. However, the defendants did not press defamation as a separate finding, instead submitting that Wiseau’s conduct should be considered in support of an award of punitive damages.

Schabas J awarded $200,000 CDN in punitive damages. Schabas J. noted several factors that justify a punitive damage award:

o Wiseau engaged in bad faith negotiations with the defendants in order to delay or prevent the release of the documentary when it likely would have received much attention and accolades. o Wiseau requested the defendants delay the documentary’s release to continue negotiations but, instead used the delay to prepare an injunction. That injunction was ex parte and based on misleading and incomplete material. o Wiseau created roadblocks to scheduling at almost every attendance. Wiseau also forced his lawyers to bring motions to remove themselves as counsel of record and then attempted to rely on the lack of counsel as a basis for delay, even though the situation was of Wiseau’s own making. As Schabas J. notes "Wiseau’s motivation was made crystal clear when, on the last business day before trial, he sought to discontinue the proceeding with the intention of starting a new claim somewhere else." o Wiseau made misrepresentations to third parties about the legality of screening the documentary. o Wiseau conducted the “Shame on You” campaign which wrongly accused the defendants of illegal conduct, including “stealing” material from Wiseau. o Wiseau accused the defendants of filing “perjurious” affidavits, though he never identified what was allegedly false. o XX notes that the action was brought for the improper purpose of preventing the release of a documentary disliked by Tommy Wiseau. XX notes the similarity to an anti-SLAPP motion, 8

which if the defendants had pursed would have likely been entitled to damages. On that point, the deliberate infringement on the defendants’ freedom of speech caused by the plaintiffs’ actions also supports an award of punitive damages

Conclusion

Wiseau is perhaps a cautionary example of the challenges lawyers can face with artist clients:

o Be wary of broadcasting grievances on YouTube, which in Wiseau's case factored into the award of punitive damages. o There is a gap between how certain artists might envision their reputation and their actual reputation. In the courtroom, an inclination towards the former seems to have caused Wiseau to mislead the court. o This decision recognizes the place of documentaries within the fair use exception. Although, such an analysis must still be cautioned by indications that the work was produced for commercial purposes. o Wiseau's eccentricities seemed to have led to material non-disclosure and issues attended court proceedings. These, doubtlessly, weighed adversely on his credibility.

Other points of interest

Schabas J. writes that "[i]f Wiseau does not like how he is portrayed in Room Full of Spoons, his claim may be for defamation." This comment was in response to the plaintiffs' argument in support of the breach of copyright claim. Much of that argument centred on Wiseau's objections to the allegedly solicitous nature of the documentary. Schabas J. notes that Wiseau did not sue for defamation, which is perhaps an acknowledgement that the documentary is on a matter of “public interest.” Some of Wiseau's complainants might be attributed to confusion on the meaning of "fair" in "fair dealing". Schabas J. writes on this point, "[i]n my view, like the term “fair comment” in defamation law, “fair dealing” is a misleading term, as it is not determined by the plaintiff’s, or the court’s, sense that something is “unfair,” but rather is based on a range of factors that respects the rights of speakers and users to communicate information and views to the public without undue restrictions."

Another point of interest, Schabas J. also allowed the testimony of several "experts" who were likely not properly qualified or impartial. Wiseau called several witness as "experts" in film and entertainment. Schabas J. recognized that each of these "experts" where advocates for Wiseau. Nonetheless, Schabas J. elected to receive their evidence, as "as one might from a self-represented litigant", noting that Wiseau had a revolving door of counsel in the lead up to the trial.

Another interesting note arises from the plaintiffs' attempts to discontinue the proceedings. Before Koehnen J., Wiseau submitted a document entitled "Total Withdraw." (seemingly drafted without Wiseau's counsel) The plaintiffs disclosed that they intended to bring a new action in another jurisdiction for the same relief. Although it was suggested by the plaintiffs that the counterclaim could still proceed, Koehnen J. found that to be inappropriate, as the issues in the counterclaim are “intricately bound up with the main action,” and “require the issues in the main action to be determined.” 9

A final point of interest: it is not addressed how liability will be apportioned between the plaintiffs, which are Wiseau, and two private companies seemingly controlled by him. This is certainly a concern for the defendants should Wiseau refuse to or be otherwise unable to pay.