Appeals court makes it easier for writers

2nd Circuit says Christensens can sue over USA's 'Royal Pains'

In a decision that bolsters the ability of writers to pursue claims of idea theft, a federal appellate court has ruled that Hayden Christensen and his brother Tove can revive their suit against USA Network over the idea for “Royal Pains.”

The decision by the 2nd Circuit Court of Appeals in New York is significant in that it could make it more difficult for studios to easily dismiss cases of idea theft on the grounds that they are preempted by federal copyright law. The appellate court found that the Christensens could pursue their claim of breach of contract under state law, rejecting arguments by Universal Television Network that federal law preempted it.

The ruling has similarities to a decision by the 9th Circuit Court of Appeals last year involving the Syfy series “Ghost Hunters.” That court ruled that a parapsychologist and publicist producer could pursue a breach of contract claim against the studio and producers even though a copyright claim had been dismissed.

In 2005, the Christensens, through their production company Forest Park Pictures, created the idea for a series called “Housecall,” in which a doctor who is expelled from the medical community for treating patients who cannot pay moves to Malibu and becomes a concierge doctor for the rich and famous. After sending the treatment to USA Network, they secured a pitch meeting with USA executive Alex Sepiol. Sepiol and Forest Park exchanged communications over the next week, but then contact stopped.

Forest Park filed a breach of contract suit against USA over “Royal Pains,” but a district court dismissed the case on the grounds that it was preempted.

But in its decision issued on Tuesday, the 2nd Circuit said, “The alleged contract does not simply require USA Network to honor Forest Park’s exclusive rights under the Copyright Act (assuming the material at issue to be copyrightable); it requires USA Network to pay for the use of Forest Park’s ideas. A claim for breach of contract including a promise to pay is quantitatively different from a suit to vindicate a right included in the Copyright Act and is not subject to preemption.”

The 2nd Circuit also said the breach of contract claim could be pursued even if there was not an express agreement for promise of payment if the idea was used. Instead, it cited Forest Park’s argument that “USA Network knew or should have known” that it was a “standard” in the industry to pitch ideas with the expectation of compensation in the event they are used. Moreover, it noted that California courts enforce such implied-in-fact contracts even if there are not exact price terms “as long as the parties’ intentions can be ascertained.”

Allison S. Brehm, partner at Kelley Drye, said that the decision could mean that studios will have to spend more in legal resources to defend themselves in idea theft cases. “Studios more often than not win these cases, but it costs money to get there,” she said. Studios and production companies had already been tightening their idea submission policies, she said.

The ruling also means that the two appellate circuits covering the centers of entertainment — New York and Los Angeles — have sided with the idea that breach of contract claims are not so easily preempted by federal copyright law.