IP Law Daily, COPYRIGHT—S.D.N.Y.: Paramount’s fraud and infringement counterclaims against screenwriter upheld in Top Gun: Maverick dispute, (Oct 29, 2025)

By Saurabh Kashyap, B.A., M.A., LL.B., LL.M.

Court rejects individual plaintiff’s motion to dismiss; holds counterclaims timely and legally sufficient under federal and New York law.

The federal district court in Manhattan has denied an independent screenwriter’s motion to dismiss counterclaims for fraud and copyright infringement filed by Paramount Global, Paramount Pictures Corporation, and Paramount Streaming Services. The court held that Paramount had adequately alleged Article III standing, that its counterclaims were not barred by the statute of limitations, that New York’s litigation privilege did not apply, and that the company sufficiently pleaded fraud under New York law (Gray v. Paramount Global, No. 25-cv-3484 (JSR), S.D.N.Y. Oct. 27, 2025)).

Background. The plaintiff, Shaun Gray, is an independent screenwriter who claimed co-authorship of the 2022 blockbuster Top Gun: Maverick. The defendants, Paramount Global and related entities, are major U.S. entertainment and media companies engaged in film production and distribution. The dispute arose through Gray’s familial connection to Eric Warren Singer, a professional screenwriter hired by Paramount in 2017 to co-write the Maverick screenplay. Gray alleged that Singer invited him to collaborate informally on the screenplay and that he contributed “key scenes” forming the film’s central action sequences.

Gray’s complaint, filed in April 2025, sought a declaration of joint authorship and ownership of the Top Gun: Maverick screenplay and film, and, in the alternative, claimed copyright infringement under the Copyright Act, 17 U.S.C. §§ 101 et seq. He alleged that his original "Gray Scenes" formed a substantial and protectable part of the film's copyrighted expression. While no individual registration number was cited for Gray's alleged work, Paramount held registered copyrights for the screenplay and the derivative film. Gray claimed these rights should be recognized as jointly owned, while Paramount maintained that Gray's alleged contributions were unauthorized derivative uses of its copyrighted material.

After the court partially denied Paramount's initial motion to dismiss—allowing Gray's infringement claim to proceed—Paramount filed an amended answer in September 2025, asserting counterclaims for copyright infringement and fraud. Paramount alleged that Gray used portions of its copyrighted material to develop the "Gray Scenes" and concealed this fact to claim authorship later, thereby clouding Paramount's title to the Maverick screenplay. Gray moved to dismiss.

Article III standing. The court held that Paramount adequately demonstrated Article III standing. Citing Saba Capital CEF Opportunities 1, Ltd. v. Nuveen Floating Rate Income Fund, 88 F.4th 103 (2d Cir. 2023), the court found that Paramount alleged a concrete and particularized injury arising from Gray’s unauthorized use of its copyrighted screenplay. The injury lay in the infringement of Paramount’s exclusive right to prepare derivative works—“a stick from PPC’s bundle of property rights.” The court relied on The Intercept Media, Inc. v. OpenAI, Inc., 767 F. Supp. 3d 18 (S.D.N.Y. 2025), which recognized that such “downstream infringement” constitutes a cognizable injury-in-fact because it undermines the economic incentives underlying copyright protection. The court further found that Paramount’s fraud counterclaim alleged a separate injury—a “cloud” over title to Top Gun: Maverick—which is a recognized property-based injury under Baptiste-Elmine v. Richland & Falkowski, PLLC, 2025 WL 974346 (E.D.N.Y. Apr. 1, 2025).

Statute of limitations. The court ruled that neither counterclaim was time-barred. For fraud, it applied New York’s six-year limitations period under C.P.L.R. § 213(8), or two years from discovery. Paramount alleged that its injury—the cloud on its copyright title—did not arise until the film’s release in 2022. The court accepted this reasoning, citing VR Global Partners, L.P. v. Petroleos de Venezuela, 2004 WL 1514982 (S.D.N.Y. Apr. 8, 2024).

Regarding copyright infringement, the court applied the three-year period under 17 U.S.C. § 507(b) and declined dismissal because the accrual date was uncertain. Paramount alleged that it first learned of Gray's role in January 2023, placing its claim within the limitations period. Citing PK Music Performance, Inc. v. Timberlake, 2018 WL 4759737 (S.D.N.Y. Sept. 30, 2018), the court reiterated that dismissal is improper where “some doubt” exists regarding accrual.

New York’s litigation privilege. Gray's reliance on New York's litigation privilege also failed. He argued that his 2023 statement to Paramount's counsel and the lawsuit itself were privileged communications. The court disagreed, holding that Paramount's claims arose from pre-litigation conduct: Gray's alleged concealment of his authorship and unauthorized use of copyrighted material. Citing Front, Inc. v. Khalil, 24 N.Y.3d 713 (2015), Sykes v. Mel Harris & Assocs., LLC, 757 F. Supp. 2d 413 (S.D.N.Y. 2010), and Michelo v. Nat’l Colleg. Student Loan Trust 2007-2, 419 F. Supp. 3d 668 (S.D.N.Y. 2019), the court noted that the privilege generally applies to defamation, not to fraud or federal copyright claims. It also affirmed that state-law privileges cannot defeat federal causes of action.

Fraud pleading. The court found Paramount’s fraud allegations sufficient under both Rule 12(b)(6) and Rule 9(b). Restating the elements of fraud—false representation, intent, reliance, and damage—under Chanayil v. Gulati, 169 F.3d 168 (2d Cir. 1999), the court held that Paramount adequately pleaded that Gray concealed his role in writing the screenplay and knew Paramount was unaware. Citing Remington Rand Corp. v. Amsterdam-Rotterdam Bank, N.V., 68 F.3d 1478 (2d Cir. 1995), the court held that a duty to disclose arises when one party has superior knowledge not readily available to the other. Gray's alleged concealment satisfied this criterion even without a fiduciary relationship. The court rejected Gray's argument that Paramount's knowledge through its agents negated reliance, finding agency issues factual and unsuitable for dismissal. Citing Strasser v. Prudential Securities, Inc., 218 A.D. 2d 526 (N.Y. App. Div. 1st Dep’t 1995), the court stated that a duty to disclose extends beyond parties in privity where nondisclosure prevents protective action. Paramount alleged that had it known of Gray’s involvement, it would have required a formal contract, satisfying the reliance element.

Damages. On damages, the court applied New York’s “out-of-pocket” rule, measuring loss by the difference between the value given and the value received. Relying on Lama Holding Co. v. Smith Barney Inc., 88 N.Y.2d 413 (1996), the court held that Paramount adequately pleaded diminution in the value of its copyright, specifically the alleged “cloud” on ownership. Because all the elements of a fraud claim were alleged, dismissal was unwarranted.

The Case is No. 1:25-cv-03484-JSR.

Judge: Rakoff, J.

Attorneys: Marc Toberoff (Toberoff & Associates) for Shaun Gray. Molly Manning Lens (O'Melveny & Myers LLP) for Paramount Global.

Cases: Copyright NewYorkNews