16 Casa Duse, LLC v. Merkin

In copyright dispute between production company and director hired to direct and edit short film, court found that director had no objectively reasonable basis for asserting and registering copyright, granted summary judgment in favor of producer, and awarded producer attorneys’ fees and costs, as well as sanctions against director’s attorney.

Plaintiff, a production company owned and operated by Robert Krakovski, financed and produced a short film titled “Heads Up,” purchased the screenplay from its author, assembled the film’s cast and crew, and eventually hired approximately 30 people, all of whom agreed to assign their rights in the film to plaintiff.

Krakovski approached Merkin in September 2010 to serve as the film’s director. The parties exchanged but never signed a director’s services agreement. Krakovski decided to proceed with filming without a signed agreement, and Merkin proceeded to direct the film. After filming concluded, Krakovski provided Merkin with a hard drive containing the film’s raw footage so that Merkin could prepare an initial edit of the film. Because the parties had not signed a director’s services agreement, they entered into a short media agreement to protect the footage. The agreement permitted Merkin to begin editing the footage but stipulated that “the footage would not be licensed, sold, copied, exhibited, or transferred without Plaintiff’s prior written consent.”

Merkin and Krakovski’s relationship deteriorated as they continued to negotiate the terms of both a director's services agreement and a revised media agreement. When negotiations foundered, Krakovski requested that Merkin return the hard drive storing the film’s raw footage. Plaintiff was beginning to speak to various film festivals about screening the film, but in the meantime, Merkin registered a copyright for the film with the United States Copyright Office, claiming to be the sole copyright claimant for the film.

While plaintiff was speaking to film festivals (including the New York Film Authority (NYFA)) about the film, Merkin’s attorney intervened and asserted ownership rights on behalf of Merkin. In light of the clouded title and Merkin’s threats to sue, the New York Film Authority declined to screen the film at its festival. Litigation ensued, with both parties asserting claims under federal copyright law and state common law.

Considering the cross-motions for summary judgment, the district court found that plaintiff at least shared in the authorship of the film by virtue of his work-for-hire agreements with every member of the cast and crew besides Merkin. Those agreements made plaintiff, as a matter of law, the author of any original contributions to the film by the cast and crew. As to Merkin’s purported claims to authorship, the court applied Second Circuit precedent concerning “joint author” scenarios, finding that there was a glaring absence of any “factual indicia” of Merkin’s ownership or authorship. As plaintiff was at least the dominant author, with no evidence that the rights were intended to be shared, the court granted plaintiff a declaratory judgment that Merkin held no ownership interest in the film. The court further ruled that plaintiff was entitled to summary judgment invalidating Merkin’s copyright registration.

The court also granted plaintiff’s motion for summary judgment on the return of the hard drive. The court further found that Merkin tortiously interfered with NYFA’s screening of the film. Because plaintiff suffered injury as a result of Merkin’s wrongful interference in its relationship with a film festival, the court granted summary judgment as to its tortious interference claim and found Merkin liable for $1,956.58, the full amount sought by plaintiff.

Finally, the court engaged in an analysis of attorneys’ fees, finding it “was objectively unreasonable for Merkin to assert the right to enjoin plaintiff from screening the film and to argue that plaintiff is liable for copyright infringement.” Beyond awarding costs and fees to plaintiff under Section 505 of the Copyright Act, the court took a critical look at the conduct of Merkin’s attorney during the litigation. The court concluded that Merkin’s attorney had acted in bad faith, maintaining positions that were patently unsupported by the law and refusing to concede points once their glaring deficiencies were apparent. The court awarded sanctions against him under 28 U.S.C. § 1927.

For more information, please contact Jonathan Zavin, W. Allan Edmiston, David Grossman, Tal Dickstein or Meg Charendoff.

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