Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Creator of Twilight Movie Parody Accuses Lions Gate of Misusing Copyrights and Trademarks to Create Monopoly, (May 31, 2013)

By Cheryl Beise, J.D.

An independent film studio has filed an antitrust lawsuit, accusing Canadian motion picture studio Lions Gate Entertainment Corp. and its Summit Entertainment subsidiary (collectively, “Lions Gate”) of misusing the copyright and trademark laws in connection with its Twilight Saga film series saga for the purpose of prohibiting competition and foreclosing protected expression. The 219-page complaint was filed in the federal district court in New York City (Between the Lines Productions, LLC v. Lions Gate Entertainment Corp., May 28, 2013).

Between the Lines Productions, LLC (“BLP”) owns the copyright in a motion picture entitled Twiharder, which purports to be a parody of motion pictures Twilight (2008) and The Twilight Saga: New Moon (2009) and a sociopolitical commentary on The Twilight Saga motion pictures. The title Twiharder is a parody of “Twihard,” the term used to describe an obsessed teenage fan of the Twilight franchise.

The complaint alleges that Lions Gate became a dominant market force in the movie industry during the last five years through the business model known as the “tentpole franchise.” The tentpole business model contemplates a series of motion pictures as one “brand” or single property under which all economic and speech activity can be consolidated, owned, controlled, and monetized by the studio, according to the complaint.

Lions Gate’s Twilight Saga is a five-part series of feature-length motion pictures, released from November 2008 through November 2012, which has generated over $3.3 billion in worldwide box office revenues, allegedly by exploiting the limited copyright monopoly in the “A Market,” which the complaint defines as the marketplace of original intention targeted to consumers of teen fantasy romance. The complaint also asserts that Lions Gate “has sought to monopolize the conversation in adjacent (or downstream) anti-trust markets in which speech content is used to comment upon or criticize Defendants’ ‘A Market’ offerings.’” Lions Gate allegedly achieved the monopolization of these so-called “Fair Use Zones” through “a highly oppressive intellectual property (“IP”) enforcement policy” that uses sham cease and desist notices and a prohibited trademark registrations to chill speech and exclude competition, according to the complaint.

BLP alleges that it became a victim of Lions Gate’s anticompetitive conduct in 2012. During that time, several major motion picture distributors allegedly had expressed interest in licensing Twiharder for worldwide distribution so as to coincide with the theatrical release of The Twilight Saga: Breaking Dawn (Part Two) in November 2012. But after word spread that BLP had received cease-and-desist letter from Lions Gate, the distributors allegedly revoked their offers. The cease-and-desist letter asserted that the copyrighted content of Twiharder violated the Lanham Act by diluting by tarnishment the “well-known wholesomeness” of the Twilight brand movie franchise.

BLP’s complaint seeks:

• A declaration that Twiharder should be accorded full protection under the guarantees of the First Amendment to the U.S. Constitution;

• A declaration that Twiharder constitutes a non-infringing fair use by virtue of parody, i.e., imitative references to copyrighted elements embodied in Lions Gate’s works;

• Compensatory damages in the amount of $125 million, plus attorneys’ fees, for lost business opportunity caused by Lions Gate’s intentional material misrepresentations in violation of Section 512(f) of the Digital Millennium Copyright Act “destroying Plaintiff’s economic relations with WMPI distributors and E&O Insurers in June-July of 2012, thereby foreclosing any possibility of bringing Twiharder to market in a timely and relevant manner”;

• Treble damages pursuant to Section 4 of the Clayton Act of no less than $375 million for Lions Gate’s unlawful monopolization in violation of Section 2 of the Sherman Act;

• Injunctive relief pursuant to Section 16 of the Clayton Act, prohibiting Lions Gate from sending sham cease-and-desist notices, obtaining prohibited trademark registrations, and engaging in further anticompetitive conduct causing harm to the consumer marketplace;

• Recovery of costs and attorneys’ fees under Sections 4 and 16 of the Clayton Act;

• Cancellation of Lions Gate’s registered TWILIGHT, NEWMOON, and TWIHARD marks;

• Under a theory of restorative justice, disgorgement of a portion of Lions Gate’s profits and placement in a public trust “to fund an expedient and legitimate effort to re-codify the common law doctrine of ‘Fair Use’”;

• A declaratory judgment invalidating portions of Sections 101, 106, 107 of the Copyright Act “as unconstitutionally overbroad and void for vagueness in contravention of the First Amendment to the U.S. Constitution, with respect to feature-length motion pictures and literary works created with the comedic intent to parody, mock, satirize or ridicule a pre-existing feature-length dramatic motion picture (or series of motion pictures).”

The case is No. 13-cv-3584 (JSR).

Attorneys: James H. Freeman (JH FREEMAN LAW) for Between the Lines Productions, LLC.

Companies: Between the Lines Productions, LLC; Lions Gate Entertainment Corp.; Summit Entertainment, LLC.

News: Antitrust NewYorkNews