July 05, 2013 11:45am PT by Eriq Gardner , Gregg Kilday
'The Butler' Fight: Warner Bros. Slams 'Weinstein Exception' in Letter to David Boies
Warner Bros. has responded to letters sent by David Boies, attorney for The Weinstein Company, over allegations that the MPAA's title registration process was abused in the run-up to an arbitrator's decision ordering that the title of Lee Daniels' The Butler be changed.
In the letter sent July 4, Warner Bros. attorney John Spiegel slams Harvey Weinstein's company, pointing to a "disturbing pattern and practice of flagrant [Title Registration Bureau] rules violations," detailing instances of past title disputes and offering more information about the dispute in hand. In fact, Warners' lawyer says that its adversary seems to think there is a "Weinstein exception,” and points to what happened in the months leading up to the ruling over The Butler.
“The fact that TWC is now using a campaign of misinformation about those rules and procedures to gin up publicity for the film is not lost on anyone,” writes Spiegel.
On July 2, following an arbitration, the MPAA’s Title Registration Bureau ruled that TWC could not use the title, which is also the name of a preexisting 1916 short film that now resides in the Warner Bros. library. Spiegel's letter doesn't cite that film specifically, but explains that under TRB rules, a company may designate up to 500 titles as "permanent original releases," and in May 2010, Warners added The Butler to its list.
In response to the arbitration ruling, Boies fired off letters to the MPAA and Warners on July 3.
That same day, Daniels sent a personal plea to Warner Bros. Entertainment CEO Kevin Tsujihara.
Tsujihara has responded to Daniels in a private letter, although Warners, which would not comment on the latest developments, declined to make that letter public.
Spiegel's letter sets out a detailed timeline about the controversy. It alleges that TWC began promoting its film under the title "The Butler" in September 2010, two months before it attempted to register the title. When that request was denied, it continued to use the title and waited four months before seeking a waiver from Warners. Even after Warners denied the waiver, TWC persisted in using the title.
TWC, however, has presented a different version of the events, claiming that it expected no problem when it first began promoting The Butler since one of its distribution execs had discussed it with his counterpart at Warners, who didn't foresee an issue. In fact, studios regularly grant each other waivers, as TWC did when it granted Warners the right to use the title The Good Lie (for an upcoming film starring Reese Witherspoon) even though TWC controlled the similar title The Good Life.
Meanwhile, TWC and Warners were negotiating a separate piece of business -- which neither TWC nor Warners will discuss -- but, according to the Boies version, Warners suddenly used the title "The Butler" as leverage in that separate negotiation.
Contrary to earlier statements from TWC executives that TWC tried to register the alternative title Lee Daniels' The Butler, but was denied that title as well, the Warners letter claims "TWC could have registered any number of alternative titles featuring the word 'Butler.' In fact, TWC registered the title 'Lee Daniels’ The Butler,' which Warner did not protest and which TWC could easily have used. Instead, TWC insisted on continuing to use an unregistered, uncleared, protested title, giving Warner no choice but to bring an arbitration against TWC, not only to defend Warner’s own rights in this case but to defend the integrity of the TRB rules and procedures."
Commented one producer with ties to Warners,"If you're Lee Daniels, how are you feeling right about now, knowing Harvey could've registered 'Lee Daniels' The Butler,' didn't, and it would've been approved? To me, that's the headline!" Daniels could not immediately be reached for comment.
Other sources add a further wrinkle to the dispute, claiming that TWC had successfully cleared the title Lee Daniels' The Butler prior to the arbitration, but Warners challenged it during the arbitration, which then ruled TWC could not use the title.
The Warners letter also cites what it claims are past abuses of the MPAA's title registration process by The Weinstein Co. and the Weinstein brothers' previous company Miramax. "Over the years," Spiegel argued, "TWC and its principals have operated in the TRB process with breathtaking hypocrisy. They have used the TRB rules and procedures to extract concessions from, and initiate arbitration against, other subscriber companies in order to advance TWC’s own interests." But while TWC has used the rules to protect its own titles, he writes, at the same time "TWC has flouted those same rules if and when they have happened to conflict with TWC’s interests."
The letter claims that Miramax used the title Scream in 1997 without having cleared it, then lost an arbitration ruling but continued to use the title despite monetary sanctions. "Similarly egregious violations of the TRB rules by your clients in connection with the motion pictures 'Il Postino' ('The Postman') and 'Control' resulted in the imposition of similar injunctions and sanctions."
Although TWC now faces MPAA fines of $25,000 per day for continuing to use the title, it continued to promote the movie, which opens Aug. 16, in theaters over the Fourth of July weekend. TWC declined to comment Friday about the latest developments.
Here's a copy of the full letter:
Dear Mr. Boies:
We represent Warner Bros. Pictures (WBP) and Warner Bros. Family Entertainment (collectively, “Warner”). I write in response to your July 3, 2013 letter on behalf of The Weinstein Company’s (TWC). TWC’s cries of unfairness and its threats to sue Warner are unproductive and unwarranted responses to a situation that TWC alone has created.
Your letter conspicuously omits to discuss the actual course of events in this case. That is no oversight, of course, because TWC has flagrantly and repeatedly violated the rules of the Title Registration Bureau (TRB) of the Motion Picture Association of America, Inc. (MPAA). For many years, TWC (including its affiliates and its predecessor in interest, Miramax Film Corporation) has subscribed to the TRB rules and procedures. The TRB functions as the central registration bureau for its subscribers’ film titles of U.S. theatrical motion pictures. TWC is a voluntary subscriber to the TRB. In other words, TWC chooses to avail itself of the many services and benefits the TRB provides. In exchange, TWC, like anyone else who voluntarily elects to participate in the TRB process, agrees to be bound by the TRB’s rules and procedures. Over the years, however, TWC and its principals have operated in the TRB process with breathtaking hypocrisy. They have used the TRB rules and procedures to extract concessions from, and initiate arbitration against, other subscriber companies in order to advance TWC’s own interests. See, e.g., Phoenix Pictures/Miramax-Dimension Arbitration (Oct. 5, 1999) (awarding the Weinstein-controlled Miramax relief against Phoenix’s release of “Got To Be You”); New Line Productions/Miramax-Dimension Arbitration (Dec. 17, 2003) (awarding the Weinstein-controlled Miramax relief against New Line’s “Curse of the Mask”). At the same time, TWC has flouted those same rules if and when they have happened to conflict with TWC’s interests.
As TWC is well aware, TRB subscribers must register each and every one of their film titles and cannot use a title for which they do not have the rights under the TRB rules. See TRB Rules 3.1 and 5.1.2. Pursuant to TRB Rule 184.108.40.206, each subscriber may designate up to five hundred (500) titles as “Permanent Original Releases.” WBP chose to add its title, “The Butler,” to this list in May of 2010. Where, as here, a subscriber submits a title for registration that is identical to the title of a Permanent Original Release, TRB Rule 220.127.116.11 clearly provides that registration will be denied unless a waiver is obtained from the subscriber with the protected title. If a waiver is not obtained, the subscriber seeking to register the identical title can instead register a variation of that title. If the subscriber with the similar permanently protected title protests, the subscriber seeking to use the similar title can request an arbitration, and a panel of arbitrators then decides, based on numerous factors, including equitable considerations, whether or not there is “harmful conflict” between the titles, such that the party seeking to use the permanently protected title should be precluded from doing so.
These are the rules and procedures -- among many others -- which have been in place for decades, with which TWC is intimately familiar, and which TWC has invoked many times for its own benefit. And yet, as it has also done several times in the past, TWC has chosen to proceed in reckless disregard of the rules, apparently relying on a self-spun “Weinstein exception” to the rules whenever and wherever those rules do not solely favor TWC.
TWC’s violation of the rules in this case include the following:
(1)TWC began promoting its film in September 2012, two months before TWC even attempted to register the title with the TRB;
(2)TWC attempted unsuccessfully to register the title in November 2012, and continued to use the title without authorization for eight months after its registration was denied
(3)TWC delayed for four months seeking a waiver from WBP, during which time TWC continued to make unauthorized use of the title;
(4)TWC failed to timely register a similar title, that Warner would likely not have protested and, even had the matter gone to arbitration, would likely have resulted in TWC’s being able to use the similar title; and
(5) TWC continued to use the title for months after Warner declined to grant a waiver.
In light of the severity of TWC’s transgressions, it is unsurprising that the arbitrators ruled as they did. Indeed there was ample precedent for their ruling, including TWC’s own disturbing pattern and practice of flagrant TRB rules violations. For example, in 1997, the Weinstein-controlled Miramax released the motion picture “Scream” without having cleared the title in conformance with TRB rules. After the subscriber who protested Miramax’s unauthorized use sought arbitration, the panel, as the panel did in this case, enjoined Miramax from any further use of the title; prohibited Miramax from using the word “scream” in any form; awarded damages and attorneys’ fees to the opposing party; and ordered monetary sanctions for any prospective violations of the arbitration award. Similarly egregious violations of the TRB rules by your clients in connection with the motion pictures “Il Postino” (“The Postman”) and “Control” resulted in the imposition of similar injunctions and sanctions.
When viewed in light of the complete factual background, TWC could not reasonably have expected the arbitration in this matter to yield any result other than the arbitrators’ ruling. On the contrary, given TWC’s extensive experience with the TRB and intimate knowledge of the rules, it is truly astounding that TWC chose once again to flout the rules, especially when there were so many opportunities for TWC itself to obviate the harm that TWC now claims. Had TWC timely sought to register the title and timely sought a waiver from Warner, there would have been ample opportunity for TWC to register a clearly similar title if Warner denied the waiver. TWC could have registered any number of alternative titles featuring the word “Butler.” In fact, TWC registered the title “Lee Daniels’ The Butler,” which Warner did not protest and which TWC could easily have used. Instead, TWC insisted on continuing to use an unregistered, uncleared, protested title, giving Warner no choice but to bring an arbitration against TWC, not only to defend Warner’s own rights in this case but to defend the integrity of the TRB rules and procedures.
I also note that, as your client is well aware and contrary to what you have written in your correspondence, Warner never agreed that TWC could copy Warner’s protected title. TWC attempted to make this argument at the arbitration hearing and it was soundly rejected by the arbitrators. The evidence was clear and unambiguous that Warner expressly rejected TWC’s request for a waiver -- including at least twice in writing -- and that TWC continued to use the title in willful disregard of Warner’s rights and in violation of the TRB rules.
In light of the complete background, it is obvious that the accusations your letter makes are both baseless and fruitless, and that TWC is trying to twist this dispute into something it is not. Warner is in no respect trying “to restrict the marketing and distribution” of TWC’s motion picture. The fact that TWC is now using a campaign of misinformation about those rules and procedures to gin up publicity for the film is not lost on anyone. Indeed, the New York Times noted just yesterday that TWC is following its well-worn path of creating “well-publicized controversies” on the eve of a film’s release. http://artsbeat.blogs.nytimes.com/2013/07/03/its-weinstein-vs-warner-brothers-over-use-of-the-title-the-butler/.
TWC’s attempt to re-litigate a case it lost in arbitration – whether in the press or in court – will never succeed. The TRB rules make it abundantly clear that TRB arbitration is the sole and exclusive remedy for resolving any and all title disputes. The courts do not allow parties like TWC to “sit idle through an arbitration procedure” and then collaterally attack that process in a lawsuit “when the result turns out to be adverse.” Marino v. Writers Guild of America, East, Inc., 992 F.2d 1480, 1484 (9th Cir. 1993). Your suggestion that the TRB rules that TWC voluntarily elected to subscribe to violate the antitrust laws is specious. See Guichard v. Mandalay Pictures, 2005 WL 2007883, at *4 (N.D. Cal. Aug. 22, 2005) (rejecting claim that TRB rules violated antitrust laws); Guichard v. Universal City Studios, 2007 WL 1750216, at *7 (N.D. Cal. June 15, 2007) (rejecting analogous claim that TRB rules were unfair business practices). And, your insinuation that there is some irreparable injury in TWC being subject to sanctions of $25,000 per day for continuing to flout the rules is meritless. If TWC believes that sanction is unwarranted, TWC can make that argument to the arbitration panel or in the appeal process that TWC has voluntarily decided to avail itself of. In all events, the idea that a sanction of $25,000 per day will cause some catastrophic harm to a corporation with the immense resources of TWC and the Weinsteins is self-evidently absurd. TWC’s litigation threats are just more hollow posturing by a party that does not have the facts, law or equity on its side. Let me assure you that Warner will vigorously defend any attempt by TWC to circumvent rules and procedures to which it has voluntarily subscribed and to which it is indisputably bound. It should go without saying that we expect TWC to preserve all relevant documents.
The foregoing is not a complete recitation of all of the facts and law pertaining to this matter, nor a waiver of any of Warner’s rights, remedies, defenses and positions, all of which are expressly reserved.
Very truly yours,
John W. Spiegel