June 27, 2012 7:37am PT by Eriq Gardner
Hayden Christensen Wins Big Victory Against USA Network in 'Royal Pains' Appeal
Hayden Christensen has scored a major success at the 2nd Circuit Court of Appeals.
A decision by the appellate circuit Tuesday revives his claims against USA Television Network for allegedly stealing his concept to create the series Royal Pains and represents a significant setback for Hollywood studios at large in contending with idea-theft lawsuits.
In 2005, Forest Park, the production company operated by Christensen, best known for his role as Anakin Skywalker in the Star Wars prequels, along with his brother Tove Christensen, formulated a concept for a TV show called Housecall, in which a doctor, after being expelled from the medical community for treating patients who couldn't pay, moves to Malibu and attends to the rich and famous.
Forest Park created a written series treatment for the idea, including character bios, themes and storylines, and sent it to Alex Sepiol, a programming executive at USA Network. The Christensens then had meetings with Sepiol, who later testified he had never heard of doctor who makes house calls to the rich and famous before hearing the pitch. However, the meetings never amounted to much.
Then, in 2009, USA introduced Royal Pains, a show with a similar concept, which led the Christensens to sue. Most important, the Christensens didn't allege copyright infringement but rather a red-hot claim known as breach of implied contract. Under such a claim, when an idea is submitted and accepted for review, as the Christensens asserted here, there's an expectation that if the material is later used, the writer will get something.
It's a cause of action that has troubled many entertainment studios accustomed to successfully defending copyright infringement lawsuits. Plaintiffs fail in such cases because ideas are not protected by copyright; only substantially similar expression gets legal cover.
In fighting implied-contract claims, studios have argued that state-based contract allegations are pre-empted by federal copyright law.
Last year, NBCUniversal suffered a big loss in a similar case concerning Syfy's Ghost Hunters when the 9th Circuit Court of Appeals rejected that theory. The case was significant enough that when it was appealed up to the U.S. Supreme Court, the MPAA and others in the industry submitted an amicus brief. The Supreme Court denied a review.
Since the loss, Hollywood studios and their lawyers have consoled themselves by figuring that it was just one appellate circuit and that there were others out there with the opposite conclusion.
But now Darth Vader has come along.
Last year, a federal judge dismissed Christensen's lawsuit against USA Network, agreeing with the network that copyright law pre-empted the implied breach of contract claim and that since his allegations entailed the theft of unprotectable ideas, the lawsuit had no merit.
On Tuesday, 2nd Circuit Judge John Walker Jr. wrote an opinion that reversed this judgment and held that Christensens' claims were not pre-empted by copyright law. "There are several qualitative differences between such a contract claim and a copyright violation claim," he writes, adding that sister appellate circuits recently have come around to this same conclusion.
The judge says that a plaintiff can't avoid pre-emption simply by labeling a claim "breach of contract" but must actually allege elements of an enforceable contract, "including offer, acceptance, and consideration, in addition to adequately alleging the defendant’s breach of the contract."
To survive pre-emption, plaintiffs like Christensen have to bring proof of an "extra element" such as mutual assent or a promise to pay for use of a submitted idea. Other circuits have interpreted the "extra element" standard in varying ways, and in this case, Walker notes that "we need not address whether pre-emption is precluded whenever there is a contract claim or only when the contract claim includes a promise to pay."
But Walker sees that the Christensens are alleging that when USA Network took the pitch meeting, it voluntarily accepted their ideas "knowing full well that Plaintiffs had submitted those ideas in confidence and for economic gain, and with the clear expectation of payment in the event those ideas were utilized by USA Network."
As such, he writes that this is qualitatively different than any copyright allegation and has thus decided to reverse the lower court's decision and remand the case back to the district court for further proceedings.
The full decision is on the next page.