Should Authors Panic Over ‘Gravity’ Case?
Excuse me while I brush off a bit of the dust on my keyboard.
Now, if you are a creative type or movie buff that hasn’t seen articles with big headlines about Tess Gerritsen‘s suit against Warner Brothers over money she claims is owed due to the production of the film Gravity [I originally linked to the film’s official site, but dislike websites that auto-play sound]. Some blogs aimed at writers and screenwriters have made a larger deal of the impact this could have on future contracts with studios.
Why? Well because it looks like if you sell a property to a studio and that studio later gets acquired by another company, the new owner could use your work without having to honor the original studio’s responsibilities.
And that would be bad. I just don’t think we’re there, and any talk of precedent (in the important legal sense) is probably extremely premature considering that all we have a is an order based on preliminary motions.
So What’s Going On?
The crux of Gerritsen’s position is this:
1) The rights to her book were purchased by the Katja Motion Picture Corp., an arm of New Line Productions, Inc.
2) The contract between her and Katja was guaranteed by New Line, who it was understood would actually be making the movie; she claims that Katja was a wholly-owned subsidiary of New Line that it used to acquire and develop literary property.
3) The movie was in the works with, unknown to Gerritsen at the time, the future director of Gravity attached to direct and he would have been given her book as well as additional material.
4) She created a modified version of the story for production that’s more like the movie than the book initially was.
5) The director and his son sometime later wrote a screenplay that not only is very similar to her novel, including a fidelity to scientific details, but to the additional modifications she produced for Katja.
6) Warner Brothers acquired control of New Line and Katja, and therefor all its rights and obligations regarding her work.
7) A year later the director and son transferred all their rights to their Gravity project to Warner Brothers.
8) Her contract has not been honored, and the film was indeed based on the book.
The contract in question would have given her a $500k production bonus if a movie was made, credit on a title card, and potentially a percentage of profits (as tricky as those can be to nail down). In her complaint she asked the court to find a Breach of Written Contract, a Breach of Continuing Guaranty, and require an Accounting by all defendants.
The judge has issued an order in favor of the defendants motion to dismiss. The reason given by Judge Morrow can be briefly summarized as this: Gerritsen’s presented evidence was not strong enough to “pierce the corporate veil” (quotation marks indicating a bit of oft-quoted legal jargon, not a statement by the judge).
Alter Ego & The Corporate What?
A huge amount of her claim comes down to the court accepting that Katja was not truly distinct from New Line as well as the idea that New Line and Katja are now complete shells that exist only for the use or benefit of Warner Brothers, which means that she is taking aim squarely at the protections that corporations and LLCs were created to produce.
For example, Gerritsen points to Katja’s failure to object when another studio (Warner Brothers) produced a film that it could easily be argued infringed on their property (the film rights to her novel and additional material) as proof that there was no corporate separation between the companies. The defendants spent a good deal of time coming up with a chart of differences between the book and Warner Brother’s film specifically to try and show that Katja had good reason not to object.
She’s saying that these other companies are just different names that Warner Brothers uses to do business, now. An alter ego.
This is why, in her recent blog post, Gerritsen emphasizes that she does not see this as an issue of copyright infringement; as far as she is concerned Warner Brothers owns the rights to her book, used them, and owes her. The defendants argue the situation is not nearly so cut-and-dried.
So, Why Not Panic?
It’s easy to see why people are concerned about big companies playing shell games with contracts and rights, though at the same time it’s precisely these situations which cause companies to take great pains maintaining a separation of resources (and why creative types often ask fans not to send them pitches or scripts, hoping to avoid bad feelings or lawsuits should they ever use a similar idea).
The fact of the matter, however, is that that even on the facts as presented by the author this cannot be read simply as a case of one company acquiring another and using their material without honoring the contract; Warner Brothers is denying the alleged nature of its relationship with Katja’s intellectual property rights, not to mention the role of New Line in the whole affair, and the script created by the director (which was previously attached to an entirely different studio before Warner Brothers acquired the rights) adds an entirely new wrinkle.
Personally I think it is entirely likely that someone at the studio saw the very similar script written by the Cuarons as a way of side-stepping the hurdles of getting access to Katja’s book rights without weakening the borders between the companies, or that Warner Brothers was already going to use Gerritsen’s book but saw getting Cuaron and the script as a way to shore up their legal position.
What the court has determined, however, is that the nature of the relationships as alleged by Gerritsen requires more proof than was present in her original complaint. To that end, her attorney is going to file an amended complaint and seems confident her case will move forward.
But What Can We Do Now?
If you are a worried screenwriter or author, the first thing you should do is make sure you have an attorney representing you on important contracts and that they are familiar with situations like Gerritsen’s.
They almost certainly will be, but it may set your mind at ease and keep the sort of situation everyone wants to avoid at the forefront when it comes time to review that all-important contract language.