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IP/Entertainment Case Law Updates

Baisden v. I’m Ready Productions, Inc., et al.

The district court granted in part and denied in part defendant theatre production company’s motion to dismiss for failure to state a claim, and allowed the plaintiff author to file an amended complaint.

The plaintiff wrote and owns the copyright in a novel called The Maintenance Man. He entered into an agreement with the defendant that allowed the defendant to produce a play based on the novel for a period of three years. The plaintiff claimed that the defendant exceeded the term of the agreement by continuing to produce the play after the three year period ended and that the defendant exceeded the scope of the agreement by producing a DVD based on the play. The plaintiff also claimed that the defendant breached the agreement by failing to pay royalties (for productions of the play during the term of the agreement), as required by the agreement.

The defendant moved to dismiss for failure to state a claim, arguing that the plaintiff’s claim of copyright infringement failed because the agreement indicated that the defendant would own all rights in the play, including the copyright. The agreement said that “[p]roducer [the theatre company] agrees to create an original play script together with associated music and lyrics based on the Novel. Producer owns and shall retain the sole and exclusive copyright to the Stageplay and publishing rights to the associated music and lyrics. These copyright and publishing rights are limited to the play script and associated music and lyrics created by the Producer.” The defendant also argued that the plaintiff’s claims for breach of contract, unfair competition and unjust enrichment were insufficient because they were preempted by the Copyright Act.

The court held that the defendant theatre company’s copyright in the play related only to new material added in the play, and that the plaintiff could sue for copyright infringement in the underlying work (i.e., the novel), for acts outside the scope of the license. The court found that the plaintiff’s claim for copyright infringement was sufficient to state a claim because he alleged that the defendant exceeded the scope of the agreement by creating a motion picture based on the novel and because the agreement licensed the ability to create the play for the limited purpose of conducting live performances and not for the purpose of creating a motion picture; and the defendant exceeded the term of the agreement by continuing to produce live performances of the play after the three-year period of the agreement. The court, therefore, denied the defendant’s motion to dismiss the copyright claim.

The defendant also moved to dismiss the breach of contract claim, arguing among other things that the claim fails because the plaintiff cannot seek damages for both breach of contract and copyright infringement arising from the same conduct. The court denied the motion because the plaintiff’s allegations assert that (1) there existed a valid contract between the parties, (2) the plaintiff fully performed his obligations under the contract, (3) the defendant breached the contract by failing to compensate him under the contract and by failing to provide quarterly accountings of all revenues associated with the play as called for by the contract, and (4) the defendant’s breach of contract caused him to suffer damages in the form of lost profits. The court concluded that the plaintiff stated a claim for breach of contract and the claim contained an extra element so it was not preempted by the Copyright Act.

The court granted the defendant’s motion to dismiss the unfair competition and unjust enrichment claims, but allowed the plaintiff to amend his complaint to more fully support these claims.