Wiseau Studio, LLC Et Al. V. Harper Et Al., 2020 ONSC 2504 (Canlii)

1 "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.

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