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IP/Entertainment Case Law Updates

Atlantique Productions S.A. v. ION Media Networks Inc.

Between April and July 2012, French television producer Atlantique Productions S.A. and ION Media Networks Inc. discussed the terms of an agreement under which ION would acquire the U.S. rights to a series produced by Atlantique. On July 20, 2012, Marc Zand, ION’s Executive Vice President of Content Acquisition and Business Affairs, emailed Olivier Bibas, General Manager of Atlantique, the “final version” of the proposed term sheet and a draft approval letter from ION. In more than one email exchange, Zand outlined a specific protocol for executing the agreement, whereby Atlantique was to execute the term sheet and then send it to ION to countersign. On July 23, 2012, Bibas sent the term sheet with his signature and the exhibits to Zand via email, but ION never countersigned or returned the term sheet to Atlantique.

Atlantique sued ION for breach of contract, promissory estoppel and fraud. The district court dismissed all three claims. On appeal, the Ninth Circuit first affirmed the lower court’s ruling that California law applied. Although the term sheet included a provision stating that New York law should apply, the district court concluded that the term sheet’s forum selection clause does not bind the parties and that ION did not demonstrate that New York law “materially differs from the law of California.”

On Atlantique’s breach of contract claim, the appellate court found that the district court correctly concluded that a contract had not been formed “because the signature protocol demonstrated the parties’ agreement that signatures were required for the contract to be binding.” ION communicated to Atlantique several times that the agreement would be binding only after both parties signed it and that ION first needed to obtain the requisite internal corporate approvals before signing. The Ninth Circuit noted that Atlantique agreed to this protocol, as evidenced by Atlantique’s sending ION the “partially executed” term sheet for ION’s signature. Atlantique “failed to identify any evidence sufficient to raise a reasonable inference that the parties’ mutual understanding about the signature protocol changed,” said the Ninth Circuit. Therefore, the district did not err in granting summary judgment in favor of ION on the breach of contract claim.

As to Atlantique’s promissory estoppel claim, the Ninth Circuit upheld the district court’s ruling that, where the parties had mutually agreed that the contract had to be signed in order to be binding, it was unreasonable as a matter of law for Atlantique to rely on the contract before ION signed it. Finally, the Ninth Circuit affirmed the district court’s finding that Atlantique’s fraud claim failed as a matter of law because Atlantique failed to provide any persuasive evidence that ION misled Atlantique into believing that a final, binding agreement existed.

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