New Line Claims 'Conjuring' Partner Committed Trademark Fraud

The Conjuring Farmiga Wilson - H 2013
Warner Bros. Pictures

The Conjuring Farmiga Wilson - H 2013

Next month, The Conjuring spooks its way into theaters. The supernatural thriller directed by James Wan is based on the "true" story of two paranormal investigators -- Ed and Lorraine Warren -- who come to the aid a family living in a haunted house. The film garnered good buzz last week at the Los Angeles Film Festival, and Warner Bros. has high hopes for it.

But as the film studio prepares to frighten audiences, the deal that got the movie made has conjured its own scares in arbitration.

On one side is Warners subsidiary New Line, which claims that Tony DeRosa-Grund's Evergreen Media Group has acted in bad faith. Evergreen produced the film for New Line, but then made a second deal with Lionsgate for a Conjuring TV series. New Line is crying foul over the prospect of an entertainment property with the same title.

LAFF REVIEW: The Conjuring

In a statement given to The Hollywood Reporter, the company says "New Line declines to comment on the lawsuit other than to say that it intends to vigorously protect its rights to the title of its film."

In turn, Evergreen believes that New Line should live with the express provisions of a contract drafted by studio lawyers. The defendant in the arbitration maintains that it has reserved rights for television and comic books and is upset with how New Line is potentially getting in the way of a Lionsgate series. Evergreen is eyeing a possible counterclaim, we hear.

In general, titles are tricky. They're not protected by copyright, and movie and TV agreements have a lot of technical language about rights and media, but usually address titles only in passing.

At the moment, the dispute is playing out behind closed doors in arbitration. However, New Line is opposing Evergreen's attempts to trademark "The Conjuring," and papers lodged earlier this month at the USPTO shed some light on the controversy. (See trademark opposition.)

According to New Line, the deal over The Conjuring was made on Nov. 11, 2009, and included an "option quitclaim agreement" (OQA). Warners says that this agreement conveyed rights to exploit the property and that under the agreement, New Line has "the right to secure … trademark registration and protection thereof in all countries and territories where such protection is available."

New Line is making the case that Evergreen is not authorized under its agreement to register or use the mark. The studio also points to activity from DeRosa-Grund's company to support the notion that its actions weren't proper. As New Line argues, "That [Evergreen] approached New Line soon after filing the Applications to offer New Line a license for the Mark is evidence that [Evergreen] intended to use the Mark in connection with the Project in violation of the OQA and, thus, that [Evergreen’s] intent was not bona fide or in good faith."

New Line says that its production partner on The Conjuring has "committed fraud on the United States Patent & Trademark Office."

Evergreen is not taking these allegations lying down, of course.

The company believes that New Line is using tactics to stall Lionsgate by raising legal claims that will make the TV project uninsurable.  As it stands now, the dispute mainly centers on use of "The Conjuring" as a title but potentially goes beyond that. New Line's position is that Evergreen only has reserved limited rights that cover certain stories of the Warrens, but not others. The subject matter of the unproduced TV show could in fact trigger more legal wrangling depending on what the series turns out to be.

"I have the utmost respect for Toby [Emmerich] and Richard [Brener] as well as the development executives over at New Line, and that is why I decided to produce The Conjuring with them in the first place," says DeRosa-Grund.

"With regards to The Conjuring," he adds, "New Line agreed that Evergreen reserved several rights including all rights to create a television series from the underlying rights pursuant to the parties’ agreement. Also, pursuant to our agreement Evergreen retained the right to use the title 'The Conjuring,' which I created, in connection with these reserved rights including television.  Unfortunately, New Line is improperly claiming that it retains the sole and exclusive right to use the title 'The Conjuring' even in connection with rights that it admits it does not own, such as television. Evergreen is following the terms of the agreement 100 percent and only asks that New Line do the same. "

Twitter: @eriqgardner