'Dungeons & Dragons' Movie Fight: "Son of a Bitch" Sequel Spat Heads to Trial

DnD Cash Illo - H 2014
Courtesy of Wizards of the Coast; iStock

DnD Cash Illo - H 2014

A version of this article appeared in the Sept. 19 issue of The Hollywood Reporter.

On Sept. 16, Hasbro and Sweetpea Entertainment will face off at a trial that could impact how future motion picture projects get developed. The courtroom showdown serves as a proxy war of sorts between two major studios — Warner Bros. and Universal. A California federal judge will decide if tiny Sweetpea Entertainment made proper sequels and retained film rights to the game Dungeons & Dragons and can thus authorize Warners to make a new film or if those rights reverted back to Hasbro, Universal's licensor.

Dungeons is one of the best-selling games on the planet. First published in 1974, the fantasy game allows players to create their own characters, participate in imaginary adventures full of monsters and treasures and be guided through obstacles at the lead of a Dungeon Master.

The present ordeal began when Warner Bros. Pictures executive Jon Berg asked writer David Leslie Johnson (Wrath of the Titans) in September 2011 to prepare a screenplay based on the game. What's remarkable was that Warners didn't then own D&D rights, according to a declaration filed by Berg. So when Johnson's ensuing Chainmail screenplay began circulating to enthusiasm at the studio's offices in August 2012, Berg directed Warners business affairs exec Jun Oh to investigate the possibility of acquiring rights.

Oh had several conversations with Hasbro and the toymaker's reps at William Morris Endeavor, according to her own declaration. He heard back that rights were "complicated." His discussions with Hasbro showed a deal could be had, but there were potential limitations. For instance, he says that Hasbro executive Michael Eisner told her that "Dungeons & Dragon" could only be used as a subtitle that was at most 50 percent of the size of the main title of the film. Around this time, Berg also received an email from Andrew Rona, the president of Joel Silver's production company, who mysteriously stated, "I hear you guys have a good script from David Leslie but don't have right[s] to D&D. Joel has the rights? Is this something we should discuss?"

Warner Bros. decided to put together a sweetheart offer for Hasbro that included $5 million to purchase rights and 5 percent gross on Chainmail. It wasn't enough. Universal Pictures swooped in and scored Hasbro's D&D rights in November 2012. "Son of a bitch," Berg emailed colleagues when he found out. "Need to understand limitations and consider," responded Warners exec Steve Spira. "Just to be clear. They closed their deal at uni and leveraged us to get gross?" wrote back a frustrated Berg.

Warner Bros. wouldn't be deterred. According to Berg's declaration, Hasbro used his studio as "a stalking horse" to obtain a better deal from Universal and was never really interested in letting Warners handle the older D&D intellectual property. But that didn't matter after the studio's executives began conversing with Silver Pictures and Courtney Solomon, president of Sweetpea, having come to the conclusion that it was really they who controlled the necessary rights needed to produce Chainmail.

Hasbro disagreed, and in May 2013 it sued Sweetpea on a variety of claims including contributory copyright infringement. Sweetpea brought counterclaims. The coming trial figures to settle once and for all who owns what rights.

When Warners turned to Solomon, it was putting the fate of its Chainmail project in the hands of a guy who in 1991 acquired an option to D&D from a Hasbro subsidiary for a mere $15,000. In 1994, Solomon executed the option, and in 1997, Sweetpea began principal photography on a D&D movie. The Hasbro subsidiary sued Sweetpea the following year for not starting the project quick enough, and the parties worked out a contract amendment that allowed Sweetpea to go forward with its film — and then have five years to begin work on any sequel.

Solomon was responsible for that original Dungeons & Dragons film, which was produced for $25 million and grossed just $15 million domestic when it was released in 2000. Silver was an executive producer on that film. As Solomon would testify in a deposition, the commercial bomb kicked Sweetpea into "director jail." Nevertheless, after the 2000 film came out, Solomon turned to Silver lieutenant Steve Richards — who "still had a passion for the project," according to Solomon — to develop and produce sequels.

Those alleged "sequels" — Dungeons & Dragons: Wrath of the Dragon God, which premiered on the Syfy Channel in October 2005, and Dungeons & Dragons: The Book of Vile Darkness, which aired on Syfy in November 2012 — are front and center in Hasbro's lawsuit against Sweetpea because under the contract between the parties, putting a sequel into production in a timely fashion means Sweetpea holds on to rights for an additional five years.

Hasbro contends the TV films don't qualify as true sequels. The plaintiff points to the basic fact that the third D&D movie doesn't have characters and plots that flowed from the prior films. Plus, as one of the company's trial briefs put it, "It is unheard of for the producer to have the right to retroactively extend its theatrical motion production rights by starting production of a television motion picture."

Sweetpea points to evidence supporting the theory that The Book of Vile Darkness is a sequel: the film's $2.5 million budget, more than a typical made-for-TV movie; that it was submitted to the MPAA for a rating in hopes of a theatrical release; that it originally contained TV-unfriendly nudity; that labor agreements classified it to be a "low budget theatrical" film; and most especially, that Hasbro had input and never brought forward its nonsequel argument during the project's production. As Sweetpea and Hasbro fight over how to interpret an ambiguous contract, Warners and Universal await word from their licensors about what they have the authority to do. But the case isn't merely about how to define a "sequel." It's also raised the cutting-edge legal issue about whether film projects in early development can amount to copyright infringement. This is something of interest to Hollywood at large. Universal, for example, is currently in court defending itself over Section 6, a film script about the early days of the U.K.'s spy agency MI-6. MGM and Danjaq, rights-holders of the lucrative James Bond franchise, are suing Universal for allegedly infringing the copyright to their famous spy character, while Universal demands an end to what it sees as a lawsuit over "hypothetical future infringement in works yet to be produced."

Interestingly, the fact that Chainmail hasn't been produced didn't stop U.S. District Judge Dolly Gee from ruling last February on summary judgment that the Chainmail script that Warners was developing constituted a violation of Hasbro's rights. For the purposes of figuring out whether contributory copyright infringement claims against Sweetpea could advance, the judge noted that the creation of a script was "intermediate copying" and that the Chainmail script violated the Copyright Act, "even in the absence of a final script or film."

Warners isn't being sued, however. One of the issues being examined at trial is whether Sweetpea encouraged the development of the infringing work after it became involved in the Chainmail project. In 2013, Warners and Sweetpea reached a deal in principle, though the agreement remained unsigned until recently.

Remarkably, Warners has now decided to roll the dice. On June 27, the studio bought Sweetpea's rights to the D&D property for $4 million, plus an additional $1 million to cover Sweetpea's litigation costs. According to an agreement obtained by The Hollywood Reporter, the film has now been given a "greenlight" with the judge's decision informing the scope of rights. Chainmail also has to find a director and cast. Hasbro is seeking an injunction.

Maura Wogan and Jeremy Goldman of Frankfurt Kurnit Klein & Selz are lead counsel for Hasbro and Wizards of the Coast. Patty Glaser and Jill Basinger of Glaser Weil Fink Howard Avchen & Shapiro are lead counsel for Sweetpea.

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