Meta-Film Associates, Inc. v. MCA, Inc.

Citations: 586 F. Supp. 1346; 222 U.S.P.Q. (BNA) 211; 1984 U.S. Dist. LEXIS 16708Docket: CV 79-1272 MRP, CV 79-3811 MRP

Court: District Court, C.D. California; May 14, 1984; Federal District Court

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Defendants MCA, Inc., ABC, and others filed motions for partial summary judgment in the case brought by plaintiff Meta-Film Associates, Inc. regarding alleged copyright infringement related to the film 'Animal House' and its television sequel 'Delta House.' The court assessed these motions during a hearing on January 16, 1984, and this Opinion serves as its Findings of Fact and Conclusions of Law. 

The background includes the fact that 'Animal House,' a successful satire released in 1978, was based on a treatment by National Lampoon Incorporated. Meta-Film claims that both 'Animal House' and 'Delta House' were derived from its unpublished screenplay 'Frat Rats.' The plaintiff's First Amended Complaint contains four counts: federal copyright infringement and unfair competition, common law copyright infringement, breach of confidence, and breach of contract. As of August 15, 1983, the breach of confidence and breach of contract claims were dismissed, along with certain allegations related to the 'Delta House' series, leaving the remaining claims under scrutiny.

The defendants' motions include requests to establish that (1) the plaintiff has standing to sue only for material contributed by William Kerby, (2) the creators of the Treatment had no prior access to 'Frat Rats,' (3) the plaintiff failed to register its copyright assignments before filing suit, and (4) to seek summary judgment on the unfair competition and common law copyright claims.

Frat Rats consists of four drafts completed between 1975 and 1977. James Hart wrote the first two drafts, with the first draft finished around December 1975 and the second in April 1976. William Kerby authored the third and fourth drafts, completed in March and May 1977, respectively. The defendants assert that the plaintiff only holds rights to the third and fourth drafts (the 'Kerby drafts'), claiming that Hart did not assign rights to the first two drafts (the 'Hart drafts'). The plaintiff counters that it obtained rights to all drafts through two assignments from Hart, including a 'Loanout Agreement' from December 29, 1976, and an 'Assignment and Assumption Agreement' from June 24, 1977, which transferred rights in the Kerby drafts to the plaintiff. While the defendants do not dispute the validity of the assignment for the Kerby drafts, they challenge the plaintiff's rights to the Hart drafts, noting they had not received a signed assignment for the Hart drafts until an exhibit was provided with the plaintiff's December 22, 1983, memorandum. This assignment appears to transfer all rights in Frat Rats to the plaintiff. The court denies the defendants' motion regarding this standing issue but grants them an extension to investigate the authenticity of the Hart assignment. Additionally, the defendants challenge the plaintiff's compliance with copyright laws, specifically the failure to record the assignment for the Kerby drafts before litigation, arguing this lack of recordation affects jurisdiction under Section 205(d) of the Copyright Act. The plaintiff contends that recordation is not required and that any previous deficiency was remedied by subsequent recordation. The court finds the plaintiff's second argument sufficient to resolve the motion without addressing the first.

The legal discussion centers on the interpretation of 17 U.S.C. § 205(d), which stipulates that a person claiming ownership of a copyright through a transfer cannot initiate an infringement lawsuit until the transfer instrument is recorded with the Copyright Office. The plaintiff acquired rights to the "Frat Rats" screenplay through two assignments from James Hart but did not record these assignments before filing suit, only doing so after being served with a motion. The court considers whether this late filing affects its jurisdiction. While the language of § 205(d) suggests that recordation is a prerequisite for filing suit, the court notes that previous rulings, such as Roth Greeting Cards v. United Card Co., have not strictly enforced such requirements. In Roth, the Ninth Circuit concluded that failure to register before filing suit did not preclude jurisdiction, as the pretrial order followed registration. Similarly, in Co-Opportunities v. National Broadcasting Co., the court allowed late recordation to relate back to the original filing date, thus preserving jurisdiction. The current court agrees with this interpretation, concluding that the plaintiff's late filing cures the initial failure and allows the court to maintain jurisdiction over the copyright claims.

In a separate issue, the plaintiffs claim that the creators of the "Animal House" treatment had access to "Frat Rats" through various channels, while defendants argue there is no reasonable possibility of such access and seek a court order to assert that the treatment's authors had no opportunity to view or copy "Frat Rats."

Plaintiffs claim that the creators of *Animal House* became aware of *Frat Rats* through a series of communications starting with the submission of the *Frat Rats* screenplay to director John Badham in 1975. At the time, Badham was under contract with Universal for the film *Bingo Long and the Traveling All Stars*, which he completed filming around August 1975. Following this, he worked on post-production until December 17, 1975, when attorney Chase Mellon submitted *Frat Rats* to him, believing it was for potential direction by Badham. Badham confirmed the submission was personal and not through Universal, and Mellon supported this view in his deposition.

Badham found *Frat Rats* to be poorly written and did not share it with anyone at Universal, nor does he recall discussing it with Universal executives during post-production for *Bingo Long*. He typically returns scripts after reading them, maintaining an index card system to track submissions. His records indicate he returned *Frat Rats* to Mellon on January 8, 1976, although he could not find the accompanying cover letter, which is normally part of his process.

During the time Badham was editing *Bingo Long*, the *Animal House* treatment was being developed by Douglas Kenney, Chris Miller, and Harold Ramis in New York, initially as a parody of high school life. Following discussions, the focus shifted to college and fraternity life. The completed treatment was submitted to Matty Simmons in early March 1976 and delivered to Gerald Miller at Universal around March 17, 1976. Miller read it and reported favorably to Ned Tanen, leading to discussions that resulted in *Animal House* being acquired by Universal.

Representatives from Universal and National Lampoon communicated about the film "Animal House" before the Treatment was submitted in March 1976. The initial contact occurred on December 9, 1975, when Gerald Miller of Universal expressed interest in a National Lampoon project after reading a Variety article. Following this, Matty Simmons from National Lampoon contacted Miller on December 16, 1975, to discuss the Treatment's development. Miller met Simmons in New York in early February 1976 and again in March 1976, where Simmons, with Ivan Reitman, delivered the Treatment to Miller. Miller asserts he did not suggest any character or story elements during these discussions and claims he was the sole Universal representative in contact with National Lampoon prior to receiving the Treatment.

The creators of the Treatment, Harold Ramis and Chris Miller, stated they had no prior knowledge of a screenplay titled "Frat Rats." Simmons only learned of "Frat Rats" when the lawsuit was initiated in 1979. The plaintiff proposed that the Treatment creators might have accessed "Frat Rats" through various individuals, including Tim Matheson, Peter MacGregor-Scott, and Verna Fields. A dinner involving Matheson, where a submission was allegedly made, actually took place in early 1977, contradicting claims that it occurred in 1976. Evidence confirms that Matheson's dinner coincided with the filming of "Almost Summer," which began in January 1977. Additionally, MacGregor-Scott received "Frat Rats" from Hart between October and December 1976, and a version was submitted to Fields in March 1977 by Hart and Michael Viner.

To establish copyright infringement, a plaintiff must demonstrate ownership of the copyright and that the defendant copied the work. Direct evidence of copying is often unattainable, so plaintiffs typically rely on circumstantial evidence, showing that the defendant had access to the copyrighted work and that the two works are substantially similar. If the plaintiff makes this showing, the burden shifts to the defendant to prove independent creation. Even without proof of access, a plaintiff can prove copying if the works are strikingly similar, making independent creation unlikely. Access is shown by demonstrating that the defendant had an opportunity to view or copy the plaintiff's work, which requires more than a mere possibility; there must be a reasonable possibility of access.

In this case, the plaintiff attempts to establish access through a speculative chain of hypothetical transmissions involving multiple parties and their interactions regarding the Frat Rats screenplay. However, this speculation lacks evidentiary support. Key individuals involved, including Badham and Miller, deny any connection or discussions about Frat Rats, and there is no evidence that the writers of the treatment had any knowledge of it prior to their submission to Universal. This insufficient proof of access fails to meet the legal standard, warranting summary judgment on this issue.

Plaintiff's reliance on previous cases is deemed inappropriate as those cases featured a strong connection between the defendant and the individual who had knowledge of the plaintiff's work, which allowed for a reasonable assumption of access to that work. In contrast, the relationships in the current case do not establish such a nexus. In referenced cases like *Bevan v. Columbia Broadcasting System, Inc.*, access was determined due to the close involvement of the intermediary in the defendant's project, including participation in pre-production meetings where ideas could be exchanged. Similarly, in *Smith v. Little, Brown Company*, the managing editor's evaluation of a submitted manuscript and subsequent discussions about a similar project provided sufficient grounds for access, despite claims of ignorance from the involved parties. The courts found that the interconnected roles and the nature of the projects supported a reasonable inference that knowledge of the plaintiff's work could have been transferred to the alleged infringers.

Miss Jones's transmission of information about the plaintiff's work to Mrs. Meyer is reasonably inferred due to their extensive prior contacts. The court's conclusion that access was established is supported by evidence, as access is interpreted as a reasonable opportunity to learn about the plaintiff's work. In *Morrissey v. Proctor & Gamble Co.*, the First Circuit ruled that mailing rules created an inference of access, rejecting the defendant's affidavits claiming ignorance. The court indicated that the plaintiff's mailing to the defendant's main office suggested delivery to the relevant division unless the defendant could provide evidence to the contrary. Conversely, in *Vantage Point, Inc. v. Parker Brothers, Inc.*, the court granted summary judgment to the defendant due to a company policy that insulated game development staff from unsolicited submissions, despite the submission reaching the president. 

In this case, the court noted that Badham, while under contract with Universal, lacked a significant connection to the creators of the allegedly infringing work. He was not in a supervisory role nor involved with other projects outside of his directed film. The court concluded that the mere existence of a contract and office space does not automatically imply access, especially when the defendant presents unchallenged evidence refuting the transmission of the plaintiff's work. Therefore, the plaintiff must provide more substantial evidence than just having sent his work to Badham.

The plaintiff's cited cases do not challenge the court's position regarding the necessity of a close relationship between an intermediary and an alleged copier, which extends beyond merely sharing a common employer. The court emphasizes the impracticality of assuming that one individual's knowledge can be attributed to all others in a large business environment, particularly when unsolicited scripts are frequently submitted across various individuals at studio lots. The concept of 'bare corporate receipt' as sufficient for establishing access is rejected. The plaintiff attempts to argue that Badham's direct contacts with Ned Tanen, a Universal executive involved with *Animal House*, provide a basis for access. However, the court finds this argument unconvincing, distinguishing it from *Kamar International, Inc. v. Russ Berrie and Co.*, where the interactions involved direct creative contributions regarding identical subject matter. In contrast, Badham's interactions with Tanen were unrelated to *Animal House* and instead pertained to a different project, *Bingo Long*. The court concludes that there must be some overlap in subject matter between the plaintiff's work, the intermediary, and the alleged copier to establish access.

In De Acosta v. Brown, the court determined that the plaintiff's submission of a screenplay to an agent established the defendant's access to the work, which is critical in copyright infringement cases. In contrast, Ferguson v. National Broadcasting Co., Inc. illustrates that mere dealings between a composer and BMI concerning unrelated subjects do not suffice to prove access to a previously submitted composition. The Fifth Circuit affirmed the dismissal of the plaintiff's claim in Ferguson, emphasizing that finding access would require speculative assumptions about BMI’s actions and the honesty of the composer, which were not supported by evidence.

Applying this reasoning, the plaintiff's submission to Badham was insufficient, as it occurred after the completion date of Universal's Treatment. Similarly, other submissions made to individuals after March 1976 did not establish access to the plaintiff's work prior to the Treatment's completion. 

Regarding common law copyright claims, defendants argued that these claims are preempted by the Copyright Act of 1976 since the alleged infringement (Animal House) occurred after the Act's effective date. However, the court rejected this argument, noting that under pre-1976 law, unpublished works were protected by common law copyright from creation until publication. The enactment of the Copyright Act eliminated the distinction between published and unpublished works but does not retroactively affect common law protections that existed prior to its implementation.

Under the Act, almost all works are subject to statutory copyright, preempting common law copyright claims, except for those that arose from actions initiated before January 1, 1978. Consequently, state law causes of action prior to this date are preserved. The plaintiff can pursue a common law copyright claim if it originated before 1978, requiring proof of three elements: ownership of a protectible property interest, unauthorized copying by the defendant, and damages resulting from the copying.

Defendants argue that a common law copyright cause of action cannot arise until a motion picture is publicly exhibited, citing cases that suggest injury occurs only upon exhibition. However, this interpretation is inaccurate. The case differs from cited precedents, as the plaintiff claims that prior industry knowledge in 1977 about Universal's production of *Animal House* led to a refusal of producers and financiers to engage with their project, *Frat Rats*, potentially causing pecuniary injury before the film's release. If substantiated, this claim would establish damages independent of public exhibition.

Plaintiff's allegation supports a common law copyright claim based on defendants' copying of *Animal House*, which occurred before the film's release. A declaration from Martin Poll, a producer, indicates he appreciated the *Frat Rats* script but delayed investment until after *Animal House* was released, ultimately deciding against investing upon noting similarities between the two works. This declaration substantiates the plaintiff's claim. Consequently, defendants' motion for partial summary judgment regarding the copyright infringement claim is denied.

The plaintiff also includes a claim for unfair competition, citing three actions by the defendants: (1) the use of the title *Frat Rats* in relation to the *Delta House* television series, (2) failure to credit the authors of *Frat Rats* for their contributions to *Animal House*, and (3) preventing the plaintiff from producing the film, which denied them the screen credit. The first and third actions do not support an unfair competition claim. The second action does establish a claim; however, remedies under California law are limited to injunctive relief. 

While the defendants considered *Frat Rats* as a title for the television sequel, they did not publicly use it in association with *Delta House*. Thus, internal usage alone cannot substantiate an unfair competition claim. The issue of depriving the plaintiff of writing credit complicates matters, as traditional unfair competition law focuses on wrongful conduct harming business interests, with no established protection for individual credit claims. Although the law has evolved under Civil Code 3369 and Business and Professions Code sections 17200 and 17203, the court finds no precedent for a common law action based solely on failure to attribute.

The California Supreme Court addressed the expansion of unfair competition law through the enactment of section 3369, which broadens protections against wrongful business practices beyond the common law definition. Section 3369 defines "unfair competition" to include unlawful, unfair, or fraudulent business practices, allowing courts to enjoin ongoing wrongful conduct in various contexts. The court concluded that the defendants' failure to credit the plaintiff for contributions to the film "Animal House" constitutes a valid claim under Business and Professions Code section 17203. This conclusion is supported by the Ninth Circuit's ruling in Smith v. Montoro, where the plaintiff's alleged removal from screen credits was deemed a violation of fairness standards under the Lanham Act. The Ninth Circuit highlighted that unfair competition law has evolved to include broader definitions of unfair practices, moving beyond mere fraudulent passing off. The court found that the defendants’ actions to misappropriate the plaintiff's contributions deprived him of his associated advertising value and goodwill, establishing a wrongful act. The California Supreme Court considers the Smith case as persuasive authority for its decision.

The plaintiff claims that the defendants wrongfully deprived it of a valuable screen credit, which involves an attempt to misappropriate its talents and efforts. The Court aligns this practice with unfair competition as outlined in California's Business and Professions Code § 17200, asserting that such actions are "wrongful" and thus prohibited. However, while the plaintiff has established a claim under California's statutory unfair competition law, any remedy is limited to injunctive relief, as established by Chern v. Bank of America, where the California Supreme Court ruled that private plaintiffs cannot recover damages under similar statutes. This is supported by lower court cases, affirming that relief is restricted to injunctive actions without the prospect of damages.

There are circumstances under which courts may award monetary relief in unfair competition cases, particularly via restitution as ancillary relief in injunctive actions. Still, since the plaintiff's claim does not involve restitution, this exception does not apply here. The plaintiff also argues that the lack of a production credit constitutes unfair competition. However, the Court finds that the plaintiff did not provide production services for the film "Animal House" and merely hoped to do so in a potential future project based on "Frat Rats." The law protects against the misappropriation of actual efforts, not unfulfilled aspirations. Therefore, the plaintiff's speculative claim for production credit lacks legal standing under California's unfair competition laws. The Court orders that the defendants' motion to limit the plaintiff's standing to sue for infringement of the "Frat Rats" copyright is denied.

Defendants have demonstrated that the creators of the Treatment had no prior access to the Frat Rats screenplay before submitting the Treatment to Universal. The court denied defendants' motions for partial summary judgment regarding the plaintiff's claims of statutory copyright infringement, common law copyright infringement, and unfair competition. Additionally, defendants sought partial summary judgment on the claim that the Delta House television series pilot infringes plaintiff's copyrights, as well as a similar claim against ABC. The court granted these latter two motions since the plaintiff did not oppose them. 

The current copyright act's registration provisions resemble those of the 1909 Act. The court deemed a supplemental pleading unnecessary, aligning with the precedent established in Roth, which allows for an action to be considered instituted upon the supplementation of a pleading. The court accepted that the plaintiff's assertion of compliance with copyright laws is valid under this reasoning, finding it unnecessary to require an amended complaint.

The plaintiff argued that the completion date of the Treatment is a significant fact warranting resolution beyond summary judgment, but the court disagreed. Gerald Miller's deposition indicated that the Treatment was delivered on March 17 or 18, 1976, corroborated by testimony from others, including Jay Emmet and Doris Gilbert. The plaintiff's reliance on Ivan Reitman's testimony, suggesting a later completion date, was deemed insufficient to establish a material issue of fact.

Reitman acknowledged that his recollection of the completion dates for the Treatment was merely a guess, which he later reiterated regarding the specific months of work. His assertion that he delivered the completed Treatment to Gerald Miller in early spring conflicts with evidence indicating a completion date of March 1976. The court finds Reitman's guess insufficient to create a genuine issue of material fact. Even if the Treatment were completed in May or June 1976, it would not affect the court's ruling since all submissions related to Frat Rats to individuals associated with Animal House occurred after June 1976, confirming that the creators of Animal House did not have access to Frat Rats until after the Treatment was completed.

The plaintiff also speculated that Badham's secretary may have read Frat Rats, which could have led to indirect communication with a Universal employee and subsequently to the creators of Animal House. However, the court dismissed this as speculative and insufficient to establish access. Furthermore, the court noted that even if "bare corporate receipt" were deemed adequate to prove access, the submission of Frat Rats to Badham, who was contracted personally and not as a Universal employee, does not meet that standard.

The excerpt also references the definition of publication, which occurs when a copyright owner consents to the sale or distribution of a work. Lastly, defendants argue that the plaintiff, as an assignee of rights rather than the original writer of Frat Rats, lacks standing to challenge the lack of screen credit, asserting that only the original authors, Hart and Kerby, have the standing to raise such a claim.

The court determined that the defendants' argument lacked merit based on the Hart assignment from June 24, 1977, which transferred all existing rights related to "Frat Rats" to the plaintiff, regardless of their current recognition. Under the California Business and Professions Code § 17200, unfair competition encompasses unlawful, unfair, or fraudulent business practices. § 17203 allows individuals engaging in unfair competition to be enjoined by any competent court, which can issue orders necessary to prevent such practices and restore any unjustly acquired property or funds. The court also referenced Learned Hand's remark in Ely-Norris Safe Co. v. Mosler Safe Co., emphasizing the evolving nature of unfair competition law, noting that actions previously unrecognized as wrongful may now be actionable.