When Businesses May Not Own Rights In Their IP
They were once friends, partners and collaborators on an idea for an adventure movie in which the president is kidnapped, but now are the plaintiff and defendant in copyright lawsuit over whether they are joint authors of the screenplay Olympus Has Fallen. The case, which is pending in the Central District of California, considers the thorny issue of when a cause of action begins to accrue for a court declaration of joint authorship in a copyrighted work.
The issue is one that has arisen between former associates, perhaps best known for the falling out between Todd McFarlane and Neil Gaiman over the comic Spawn, in which McFarlane disavowed the rights of his former collaborator. These cases raise two central points. First, business relationships do not define copyrights. They exist independently as a result of authorship and copyrights that are created for or used in a business can be extremely problematic when the business relationship ends. Second, the point at which one collaborator should know that he or she is no longer considered as such becomes very difficult to ascertain while the two are working together.
Joint Authorship Claim Between Former Partners
The case involves Creighton Rothenberger, the credited author, and John S. Green who worked with him on the idea for the screenplay, jointly prepared the initial treatment and, according to the lawsuit, contributed to the final product. The screenplay was more than a decade in development from the initial idea through ultimate successful sale of the work by Rothenberger in 2012. Rothenberger filed suit against Green, seeking a declaration of sole authorship. Green counter-claimed, seeking a declaration that they were in fact joint authors and demanding that the copyright registration be amended. He also asserted a number of business-related claims, including breach of fiduciary duty and breach of a partnership agreement.
The case points out one of the more difficult aspects of any business enterprise that uses material subject to copyright protection. Consider the case in which one person with an idea forms a business with a software developer to develop and commercialize a management program. When the business breaks up, who owns the software. The answer is that the author is the owner of the copyright (although there may be an implied license for the business to continue its use) and whether the company they formed or the individual software designer is the author may be a difficult knot to unravel. An example, Woods v. Resnick, involving a failed relationship between the owners of a company that sold software used by car dealers. One of the important points in the Wood decision is that even if the product is improved by the author as an employee that is not going to divest his original authorship rights.
Intellectual Property Inventory
The easy answer to these types of disputes is to make the choice about who owns the copyrights, or other intellectual property rights, is any creative work, proprietary process, patents, etc. before any relationship turns for the worse. We encourage the owners of businesses to make these decisions when the business is formed. If someone is contributing intellectual property to the venture, it should generally be owned by the venture. Trying to unravel the question of authorship later is difficult and expensive.
Companies that are using intellectual property – and most are – should consider an inventory of their IP assets. They may want to secure assignments, restrictive covenants and non-disclosure agreements from their principals. If these questions aren’t answered adequately, the issues that they raise are expensive to unravel and could have a severe impact on the viability of the business.
In the Olympus Has Fallen case, as well as in the litigation over Spawn, the party claiming co-authorship claimed that he had been lured into not enforcing his rights by the fact that he was treated as co-author. This may be a potent argument, as most appellate courts require a clear, unequivocal repudiation of co-authorship to start the claim running.
The last chapter has not been written on Olympus Has Fallen , the film starring Gerard Butler as the man who saves the president from kidnappers after a terrorist attack on the White House. The movie was released in March by Film District and has grossed nearly $100 million in domestic box office, but behind the scenes, an interesting fight has broken out over between two writers who claim credit for the film. Creighton Rothenberger , the film’s credited screenwriter, first filed a lawsuit seeking a declaration that [...]