219-Page Antitrust Complaint
Total Page：16
File Type：pdf, Size：1020Kb
INTRODUCTION This action arises under federal antitrust laws in the context of the worldwide motion picture industry (the “movie industry” or the “WMPI”). Defendant LIONSGATE ENTERTAINMENT CORP. (“LIONSGATE”),1 a corporate entity of foreign origin which currently trades on the New York Stock Exchange, has become a dominant market force in the movie industry during the last five years on the strength of a fresh WMPI business model known as the “tentpole franchise.” Beginning in 2001 with the theatrical debut of the highly successful movie series Harry Potter, the tentpole franchise has proven to be the most lucrative way of doing business for largescale (i.e., billion-dollar-plus annual revenue) movie studios. This business model contemplates a series of motion pictures as one “brand” or single property under which all economic and speech activity can be consolidated, owned, controlled and monetized by the studio. But as this case demonstrates, the newfangled model – which actually has roots in 19th century popular entertainment - has the potential to threaten the existence of the already limited “Fair Use Zones” populated by independent filmmakers, parodists and other “counter-cultural” artists who create separate or derivative works that may be related to, inspired by or comment upon the pop culture events that dominate the national Cineplex and, by extension: the attitudes, perspectives and behaviors of the populace. Defendants’ anticompetitive conduct sets the benchmark example for why James Madison and Thomas Jefferson were apprehensive in the months leading up to the Philadelphia Convention about granting authors even limited copyright monopolies over their works: the 1 Defendant SUMMIT ENTERTAINMENT, LLC (“SUMMIT”) is a fully-integrated and wholly-owned division or department of LIONSGATE. Defendants LIONSGATE and SUMMIT are therefore referred to throughout this Complaint as one common enterprise: “Defendants” JH FREEMAN LAW 2 S.D.N.Y. COMPLAINT Chief Architects of the U.S. Constitution feared that powerful, consolidated enterprises would abuse such statutory privileges as a means to suppress the voices of ordinary citizens. And that’s exactly what’s happening here. Defendants’ first major offering in the movie industry using a tentpole franchise model - The Twilight Saga - has been propagated by a high degree of reckless disregard for this Nation’s copyright and trademark laws through what media observers have called Defendants’ “ridiculous-to-insane overreaches of intellectual property law.” [Ex. K (BTL_000583)] The Twilight Saga is a five-part series of feature-length motion pictures, released from November 2008 through November 2012, that have collectively generated over $3.3 billion in worldwide box office revenues derived from exploiting their limited copyright monopoly in the “A Market,” which Plaintiff defines in Count III2 as the marketplace of original intention targeted to consumers of teen fantasy romance. But Defendants have not been content with dominating the discussion of fantasy romance in movie theaters. They have also sought to monopolize the conversation in adjacent (or downstream) anti-trust markets in which speech content is used to comment upon or criticize Defendants’ “A Market” offerings through the creation of novel works that are either inspired by The Twilight Saga (defined herein as the “JX Market”) or, in the case of Plaintiff, repulsed by The Twilight Saga (defined herein as the “Z Market”). Defendants have achieved the monopolization of these “Fair Use Zones” through a highly oppressive intellectual property (“IP”) enforcement policy that uses sham C&D Notices and a compendium of prohibited trademark / servicemark registrations to chill speech in the “JX Market” and exclude ALL competition from the “Z Market.” In the case at bar, Plaintiff Between the Lines Production, LLC, a Los-Angeles based 2 See Chart on page 112 of this Complaint for “Quickview Reference” of Anti-Trust Markets. JH FREEMAN LAW 3 S.D.N.Y. COMPLAINT independent filmmaker, produced a feature-length motion picture entitled Twiharder through its own independent methods and means of production, based on an 100% original copyrighted screenplay. Plaintiff’s motion picture, which was marketed with complete transparency as a “parody, ” utilized Defendants’ vampire romance movie franchise as an object of ridicule, criticism and sociopolitical commentary. None of the actual cinematographic, audio-visual or musical content (i.e., “1s and 0s”) from any of Defendants’ copyrighted motion pictures, images or soundtracks was used in Plaintiff’s motion picture. The actors featured in Plaintiff’s film portrayed hyper-exaggerated caricatures from The Twilight Saga movies and lampooned expressive elements embodied in Defendants’ pre-existing works through imitative reference. The title of Plaintiff’s motion picture, Twiharder, is itself a rhetorical parody of the very term used to describe an obsessed teenage fan of the franchise, known as a “Twihard.” Beginning in March 2012, several major WMPI distributors expressed interest in licensing the Plaintiff’s motion picture Twiharder for worldwide distribution so as to coincide with the Defendants’ theatrical release of The Twilight Saga: Breaking Dawn (Part Two) in November 2012. As in the art of comedy, the timing of content delivery in the movie business is everything. This was particularly true here given that: (a) the relevance and success of a parodical work is directly proportional to the widespread public awareness of the object being parodied; (b) no other feature-length parody motion picture was scheduled to be released in conjunction with Defendants’ exploitation of The Twilight Saga: Breaking Dawn (Part Two). From April-July 2012, all reasonable minds who viewed Twiharder, or its 90-second trailer, or any of its supporting marketing materials, were left with the instantaneous and unmistakable impression that Plaintiff’s feature-length film was a parody / comedic spoof of The Twilight Saga movies. Consistent with their own review and analysis of a Twiharder screening, a litigation attorney for GRAVITAS VENTURES, the WMPI distributor who offered JH FREEMAN LAW 4 S.D.N.Y. COMPLAINT Plaintiff a Licensing Agreement; a risk assessment attorney for CHUBB INSURANCE, an E&O Insurer who offered Plaintiff an E&O Insurance Policy; and DONALDSON + CALLIF, an entertainment law firm founded by “Fair Use” expert Michael C. Donaldson, Esq. and retained by Plaintiff to provide a “Fair Use” Legal Opinion, ALL unanimously concluded that the Plaintiff’s motion picture Twiharder constituted “Fair Use” under the four-factor test codified by the legislature in the COPYRIGHT ACT of 1976, 17 U.S.C. § 107. But alas, Hollywood is a “small town” and word about Twiharder’s impending distribution deal reached Defendants. As evidenced by the public record, the affirmative defense of “Fair Use,” as codified by Section 107 and as applied by federal courts for over 35 years, has done little to deter Defendants from asserting serious charges of infringement against a very large universe of potential infringers. Rather than providing any deterrence effect, the unpredictability of the “Fair Use” doctrine has granted Defendants an unfettered license to threaten scores of independent artists with generic, stock allegations of copyright infringement and trademark infringement. On June 27, 2012, Plaintiff became just one more victim in a long line of independent auteurs to receive a sham “cease-and-desist” C&D Notice from Defendants. Within days of disclosing the communication to its contractual offerors, the WMPI distributors and E&O insurers unceremoniously revoked their offers to deal with Plaintiff, whose feature-length motion picture Twiharder was at all times thereafter excluded from distribution in the WMPI. After Plaintiff was notified of formal revocation, the attorney for the WMPI distributor explained to Plaintiff that the merits of Defendants’ allegations (or lack thereof), as contained in Defendants’ C&D Notice, were entirely irrelevant to the distributor’s revocation decision. As a matter of industry custom and practice, the mere fact that Defendants sent a C&D Notice was enough to exclude Plaintiff’s motion picture from the ONLY market networked into the JH FREEMAN LAW 5 S.D.N.Y. COMPLAINT ordinary channels of essential distribution (e.g., theatrical box-office release, packaged home media, video-on-demand, pay-per-view, or electronically stored transmission). Defendants’ false claims of trademark and copyright infringement against Plaintiff, which have continued unabated through the filing of this Complaint, are ALL based on a vexatious legal strategy that seeks to collapse every conceivable intellectual property right granted by copyright or trademark law (e.g., motion picture content, single-work titles, movie series titles, images, compositions, slogans, logos, trade dress, phrases, symbols, characters, themes) into ONE omnipotent “movie brand.” After consolidating all of its statutory interests into a single “bundle” of proprietary rights, Defendants then make generic allegations of “infringement” or “tarnishment” based on their purported right to protect the entire “brand.” In the case at bar, Defendants have registered no less than a dozen names for its series franchise, thereby multiplying the universe of potential infringers exponentially. This approach, which is clearly evident on the face of the sham C&D Notices and the Principal Register, manifests Defendants’ intent to utilize the “tentpole”