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Week in Review

By Martha Nimmer

Nobody Expects a Spinoff Litigation!

Did you know that there was a seventh member of Monty Python? Neither did I, but, according to Mark Forstater, the producer of the 1975 film Monty Python and the Holy Grail, he is (sort of) a member of the famous British comedy group. The Chancery Division of the High Court of Justice in the United Kingdom has ruled that Forstater is owed a larger share of profits from Spamalot, a musical "lovingly ripped off" from the 1975 motion picture.

The musical at issue, Spamalot, was written by original Monty Python member Eric Idle and debuted in 2005. Forstater claimed that he was due financial compensation arising from "spin-offs" of the Monty Python movie, pursuant to a 1974 agreement between him and the "Pythons, which along with Idle comprise Michael Palin, Graham Chapman, John Cleese, Terry Jones and Terry Gilliam." Under the agreement, Forstater received a "£5,000 fee plus a share of profits." The agreement also mentioned "merchandising" and "spin-off rights," but included provisions and formulas for instances when the Pythons contributed materially to the creation of the new work. In some of these instances, according to The Hollywood Reporter, "50 percent of revenue from exploitation -- the "Top Half" -- would first go to a film company set up by the Pythons, then the remaining money would be then put into a pot for division among all profit participants." The plaintiff argued that he was, for the purposes of profit sharing, the "seventh Python," and that the other members could not reduce his share of the profits without his permission. Additionally, Forstater claimed that he was entitled to a one-seventh share of the so-called "Top Half" earned by Spamalot, and that he should have received "twice as much in money and only paid half as much in expenses." The plaintiff estimated about $400,000 in damages.

Last year's trial, which included readings from one Python's journal, proved both humorous and contentious, with group members stating that Forstater was "ungrateful." In a journal excerpt from 1975, Python member Michael Palin recounted his reaction to the plaintiff's request for more money: ... as we are a soft lot and not at all businesslike, I think it would be in the finest traditions of Python irrationality if we gave Mark an extra £1000 and a silver tray with some cut glass sherry glasses and told him to stop writing to us for more money. Beyond that even I am not prepared to go. Oh, all right, some cheese straws to go with the sherry glasses.

Ultimately, however, a U.K. high court judge agreed with Forstater, ruling that he was due a larger share of profits from Spamalot. The exact amount due the plaintiff, however, has yet to be determined.


Read the decision here: http://www.judiciary.gov.uk/Resources/JCO/Documents/Judgments/forstater-v-pytghon-pictures-other.pdf

Can You Keep a (Trade) Secret?

According to IMAX, one of its former employees could not, and now, the Canadian corporation claims that its trade secrets have wound up in China. IMAX has sued California LLC, GDC Technology USA (GDC)and two companies based in the Caribbean to "stop GDC's illegal commercial exploitation of IMAX's trade secret large format digital theatre projection system and film conversion technologies." The complaint goes on to state that a former IMAX employee, Gary Tsui, stole the proprietary technology in question, and then "surreptitiously provided it to film companies in China, including a company now called China Giant Screen, for which he is the 'chief engineer.' China Giant Screen uses IMAX's trade secrets under the name 'China Film Giant Screen' ('CFGS')." Notably, neither Tsui nor China Film Giant Screen are defendants.

Allegedly, Tsui's bad behavior dates back to 2009. That year, IMAX discovered that Tsui had made off with the company's proprietary and trade secret information relating to IMAX's core projection and conversion technologies, including highly valuable software source code. While working for IMAX, but "unbeknownst to it," Tsui started his own company in competition with IMAX, and "used IMAX's trade secrets to compete against - and beat out - IMAX on a bid for a significant project in China." As part of an international, cross-border investigation, IMAX uncovered "voluminous, conclusive proof of Tsui's retention and theft of IMAX's confidential and proprietary trade secrets, including CDs containing the source code for IMAX's 2D/3D conversion process and re-mastering technology, as well as the repeated use of IMAX's trade secrets to form companies in Canada and China in direct competition with IMAX." Currently, states the complaint, Tsui remains an "international fugitive, and his plan to profit unlawfully from the technology stolen from IMAX has now touched U.S. soil with defendant GDC's efforts to market CFGS with the benefit of public funding."

IMAX seeks a declaratory judgment, an injunction and punitive damages for misappropriation of trade secrets, unjust enrichment and unfair competition. The company also seeks "reasonable royalties" for its trade secrets.



Exciting news for Apple devotees: last month, the company that gave us the iPod, the iPhone and the iPad filed an application with the Japan Patent Office to trademark "iWatch" in Japan for wearable devices. According to the application, Apple is seeking protection for the iWatch name, which is "categorized as being for products including a handheld computer or watch device." This move comes as Apple rival and courtroom sparring partner Samsung Electronics Co. prepares its own wearable smartphone device.

Little is known about what the iWatch will do or when it will be released. Apple is said to employ a team of about 100 product designers working on a watch-like device that could perform some of the tasks currently confined to the iPhone and iPad. iWatch rumors have abounded for most of the year, but to date, there is no clear idea of what the wearable device will look like. One report speculated that the watch would run a version of Apple operating system iOS, but suggested that battery life issues could be an issue, as any iPhone owner can attest. The watch might also include a pedometer and other features to help the product compete with tech accessories like Nike's FuelBand and the Fitbit.

This dearth of information has fueled speculation across the Internet about what the iWatch will look like, with various observers offering their own visions of what may be the next big Apple device. One website has compiled all the known patent diagrams for the iWatch: http://www.businessinsider.com/apples-iwatch-patent-diagrams-2013-7?op=1

In the meantime, feel free to enjoy your Google Glasses before they go the way of the Casio calculator watch.



Don't Scan On Me

Although commenced in 2005, a lawsuit pitting authors and book publishers against the search engine powerhouse Google has still not been resolved. The latest wrinkle in the case came last week when the Second Circuit Court of Appeals vacated a June decision that certified a class of authors suing Google for scanning millions of works without permission as part of their "Google Books" program. In vacating the class certification, the appeals court remanded the dispute to a federal court to examine Google's fair use defense.

The copyright infringement suit, brought by The Authors Guild and the Association of American Publishers over what was then called "Google Book Search," was initially settled when the parties reached a $125 million agreement that "would have set up a new royalty program where rights-holders would have received a share of revenues from institutional subscriptions to the collection of books made available through Google." In March 2011, a judge rejected that settlement agreement, calling it "incongruous with the purpose of the copyright laws to place the onus on copyright owners to come forward to protect their rights when Google copied their works without first seeking their permission." Undeterred by that setback, Google reached another settlement late last year with several large publishing companies, among them John Wiley & Sons, McGraw-Hill Companies, the Penguin Group and Simon & Schuster. As part of that settlement, publishers had the option of making their digitized books and journals available through the Google Library Project. The litigation with the authors pressed on, however.

Google took issue with class certification, citing problems with standing, and argued that the plaintiffs failed to allege sufficient commonality among the plaintiffs who were poised to represent the class of complaining authors. Google did not carry the day with this argument, however, eventually appealing to the Second Circuit. According to the Second Circuit's ruling, which did not directly debate the defendant's claim about class certification, the court believed that the resolution of the lawsuit may lay in Google's fair use defense: "[p]utting aside the merits of Google's claim that plaintiffs are not representative of the certified class -- an argument which, in our view, may carry some force -- we believe that the resolution of Google's fair use defense in the first instance will necessarily inform and perhaps moot our analysis of many class certification issues."

In concluding that the class certification was "premature," the court sent the case back to New York district court, where Google will be able to press its fair use defense.


Read the decision here: http://www.ca2.uscourts.gov/decisions/isysquery/d81662ba-45b4-4c1a-912c-8195ee8ec0ad/1/doc/12-3200_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/d81662ba-45b4-4c1a-912c-8195ee8ec0ad/1/hilite/

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This page contains a single entry from the blog posted on July 9, 2013 10:35 AM.

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