February 23, 2012 8:15am PT by Eriq Gardner
CBS, Paramount Sued Over Film Rights to James Patterson Novel
Six years after Viacom and CBS split, a dispute has erupted that calls into question how the companies intermingled properties during their time together and unwinded assets thereafter. At stake are rights to develop a film adaptation of James Patterson's novel, Virgin. The question posed in a new lawsuit filed on Tuesday in California federal court is whether rights passed through Paramount Pictures, which remained with Viacom, or whether rights still belong to CBS Corporation, which spun off from Viacom in 2006.
The plaintiff in the case is Balagan Enterprises, a production company that says it acquired film rights to the novel and has made considerable expense developing a new adaptation only to be threatened with a copyright infringement lawsuit by CBS.
In the lawsuit, Balagan looks back at more than two decades worth of deals. Many of these deals were made in an era where the plaintiff says Viacom affiliates "transferred rights and properties among themselves arbitrarily."
According to the lawsuit, Paramount made a co-production/development deal in 1988 with another company, Wilshire Court Productions, whereby WCP would acquire properties and develop and produce them for Paramount. According to the plaintiff's interpretation of the terms of this deal, WCP was to obtain rights to various properties, develop and produce them, and then transfer the rights to Paramount.
In 1990, WCP optioned Virgin from Patterson, who is currently an author for CBS Corp.'s Simon & Schuster publishing unit
The following year, Paramount is said to have financed a TV movie titled Child of Darkness, Child of Light, based on Patterson's book. The movie was shown on USA Network. The plaintiffs believe that Patterson conveyed his rights to WCP, which then assigned the copyright on the film to Paramount.
In 1994, Paramount made another co-production deal. This time, it was with two companies, Wizan Films Properties and Xxcellent Films. The deal purportedly had a reversion provision that stipulated that if Paramount elected to abandon a project, all rights in the project would revert to the producer (Wizan/Excellent) provided Paramount got back its monetary investment on the abandoned project in the form of a lien.
After this deal was signed, Paramount's new partners undertook production of a new adaptation of Virgin. A film entity was set up, writers were hired, but eventually Paramount decided to abandon the project in 2000. The lawsuit reports that after this happened, Paramount sent a letter to its producer-partners stating that "all rights in and to the Picture have revered to Producer," identifying the heads of Wizan and Xxcellent. The reversion is also said to have been confirmed in 2009 by one of Paramount's outside lawyers.
In 2002, A&E Industries is said to have acquired rights from Wizan/Xxcellent. Thereafter, A&E assigned them to the plaintiff, Balagan.
It's a complicated chain of title, so here's a quick review of the plaintiff's custody theory:
James Patterson >> Wilshire Court Productions >> Paramount Pictures >> Wizan Films & Xxcellent FIlms >> A&E Industries >> Balagan Enterprises
CBS is disputing this. The company maintains that it is the rightful successor to WCP and thus owns the rights to the Patterson book. In a letter sent to the plaintiff's lawyer in 2010, CBS Films general counsel Rik Toulon writes, "I am at a loss as to how your client believes that the underlying rights in the Novel were owned by Paramount since there is no agreement transferring any such rights to Paramount."
Balagan aims to show that CBS is mistaken, ignoring WCP's agreements with Paramount to transfer property rights. To prove it, the plaintiff attaches 232 pages of exhibits with its complaint, containing all of the referenced deals. The plaintiff says that CBS is interfering with its film adaptation and that by threatening to sue, CBS will make the developing film's contractors and service providers "reluctant to assist Plaintiff in the production out of fear of being sued themselves."
Balagan is now seeking declaratory relief that it owns the rights to the movie.
The lawsuit also names Paramount as a co-defendant, and the film company might be in an odd position of repudiating past statements. Although CBS and Paramount no longer share the same corporate parent, Sumner Redstone is the executive chairman and controlling shareholder of both companies.
We've contacted both CBS and Viacom and if we hear anything from them, we'll update.