After 'Dungeons & Dragons' Trial, Parties Fight Over Meaning of Movie Sequel

Warner Bros. and Universal are watching the outcome closely
Courtesy of Wizards of the Coast; iStock

It takes a perfect set of facts in a courtroom to tee up a question as esoteric but meaningful as, "What is Hollywood's definition of a movie sequel?" After a six-day trial in September over film rights to the game Dungeons & Dragons, a federal judge is now due to provide some clarity on the entertainment industry's favorite money-making vehicle.

The nominal parties in this dispute are Hasbro Inc., which now owns the company that first published Dungeons & Dragons in 1974, and Sweetpea Entertainment, which exercised an option on film rights in the 1990s and later produced three Dungeons & Dragons movies. However, the dispute is also a proxy battle between Warner Bros., which recently bought rights from Sweetpea, and Universal, which two years ago licensed rights from Hasbro. The outcome of the case will determine which studio is authorized to go forward with a film reboot of the Dungeons & Dragons franchise.

In September, U.S. District Judge Dolly Gee presided over a bench trial where both sides brought witnesses and even came out with a few unexpected tidbits. For example, during the trial, Warners exec Jun Oh talked about the studio's Chainmail project and rumors that Guy Ritchie or Eli Roth would direct and that Russell Crowe would potentially star in the film.

Now that the trial is over, Hasbro and Sweetpea are focused on the essential issue of the case: whether Sweetpea put a proper sequel into production in a timely fashion and held on to film rights. Both sides submitted post-trial briefs this week.

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Under Sweetpea's contracts, producing a sequel means getting an additional five years for another, but Hasbro doesn't think that Dungeons & Dragons: Wrath of the Dragon God nor Dungeons & Dragons: The Book of Vile Darkness — both of which premiered on Syfy — count as true "sequels" as that term is commonly understood in the motion picture industry.

Hasbro's post-trial brief lays out its case.

Roger Toll, the former head of legal affairs for Sony/Columbia Pictures, testified for Hasbro that a sequel is understood to mean a motion picture featuring the same principal characters as the prior picture, with a story that might be substantially different, but following the one in the previous movie. He also pointed to the definition of "sequel" in the Writers Guild of America Basic Agreement.

Sweetpea's post-trial brief provides the alternative theory.

Peter Dekom, a transaction lawyer in the entertainment industry, testified for Sweetpea that a sequel refers to a subsequent motion picture that is linked to a prior production in the minds of consumers by taking place in the same “world” or “universe” as the prior production. Recurring characters aren't a necessity, according to him.

The discussion is further informed by at least two more elements: first, what the parties intended a "sequel" to be when they contracted with each other; and second, how Sweetpea and Hasbro interpreted those Syfy movies when they were made.

On point one, Sweetpea says that the plain language of the contract confirms reversion of rights didn't depend on whether the sequels were distributed theatrically, nontheatrically (such as DVD) or on television. The only thing to possibly cause reversion, according to Sweetpea, is not getting a movie made in the necessary five-year window. Everything else is subordinate.

Hasbro objects to this reading of the contract by saying that the parties intended for theatrical and nontheatrical releases to operate independently of Sweetpea's rights to make television series or films. Consider it to be the rights bucket theory.

As for point two, Sweetpea says it went through all the hoops associated with a nontheatrical release — such as producing Vile Darkness independently of Syfy's control, initially releasing it on DVD in the United Kingdom and including sexual scenes and violence — but in any case, Sweetpea adds that Hasbro knew of Sweetpea's plans for Vile Darkness and didn't utter any word about reversion until much later. "Plaintiffs are estopped from sitting back and allowing Sweetpea to produce and distribute two sequels based on the Parties’ mutual understanding of how the Agreement should operate, but then reversing course when it suits them," states the company's brief.

Hasbro comes to a completely different conclusion, arguing that the best evidence of Sweetpea's intent that Vile Darkness was to be a television movie is that producer Steve Richards wired to Hasbro a $20,000 rights payment with the message: “Dungeons & Dragons, Passive Royalty due per 11.d of March 19, 1998 Agreement,” which it says relates to a provision for TV movies. Further, Hasbro says that when production began, Richards advised the company that "[s]hooting started last week and things are going well. Scyfy [sic] seems pleased as well." Richards is also said to have admitted that the shooting script was formatted for television.

"In fact, the evidence shows that, from inception to release, The Book of Vile Darkness was conceived, budgeted, developed, produced, marketed, released and, most importantly, repeatedly represented to Hasbro, as a television movie for initial and primary distribution on the Syfy cable television network," write Hasbro's lawyers.

This might all seem like an insane amount of bickering over just one word, but then again, transactional lawyers in the industry will agree that even punctuation and capitalization can make huge differences in the interpretation of a rights contract. (In this case, the issue of the noncapitalization of the letter "p" in "picture" has come up.)

And again, two major studios — Warners and Universal — have a direct stake in the outcome of a case that looks likely to get to a federal judge's final determination, which is not an every-year occurrence (or even an every-five-years occurrence) in Hollywood. Judge Gee's findings of facts and conclusions should be coming sometime in the next few months.

Hasbro is represented by Maura Wogan, Jeremy Goldman and Andrew Ungberg at Frankfurt Kurnit as well as Michael Weinsten at Lavely & Singer. Sweetpea is represented by Patricia Glaser at Glaser Weil and Christopher Caldwell at Caldwell Leslie & Proctor.

Email: Eriq.Gardner@THR.com
Twitter: @eriqgardner

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