9th Circuit Resurrects 'Ghost Hunters' Lawsuit

9th Circuit Resurrects 'Ghost Hunters' Lawsuit

By TIM HULL 

     (CN) - In a dispute over the rights to the television show "Ghost Hunters," the 9th Circuit on Wednesday reaffirmed a longstanding Hollywood rule that a pitch session between a writer and a producer creates an implied contract that cannot buckle under federal copyright law.
     The so-called "Densy claim" derives from the California Supreme Court's 1956 decision in Desny v. Wilder, a dispute over the idea for Billy Wilder's 1951 film "Ace in the Hole."
     Dominating the "dog-eat-dog" film and television business in Hollywood for more than 50 years, the rule is meant to protect writers who pitch ideas that cannot be copyrighted but can still be stolen by a producer.
     Over the years, the California courts have "uniformly concluded that Desny claims are not preempted because they flow from agreements and understandings different from the monopoly protection of copyright law," according to a ruling by a full panel of the federal appeals court in Pasadena.
     Parapsychologist Larry Montz found himself in a typically frustrating position for a Hollywood scribe in 2004. After spending years unsuccessfully pitching an idea for a television show about a team of real-life paranormal investigators who search for evidence of ghosts, "Ghost Hunters" debuted on the Sci-Fi Channel without him.
     Montz and producer Daena Smoller had previously pitched the idea to NBC and the Sci-Fi Channel. In 2006, they sued the production company behind "Ghost Hunters," Pilgrim Films & Television," distributors NBC Universal and others for copyright infringement, breach of implied contract and breach of confidence. The lawsuit claims that NBC stole Montz and Smoller's idea and partnered with Pilgrim to produce the show.
     U.S. District Judge Florence-Marie Cooper, of the Central District of California, dismissed the case, finding that federal copyright law preempted the plaintiffs' state-law claims. In 2010, a three-judge panel of the 9th Circuit affirmed.
     After a rehearing before a full panel of 9th Circuit judges, however, Montz and Smoller prevailed. The panel ruled 7-4 to reverse the District Court and revive all of the pair's claims.
     Noting its 2004 ruling in Grosso v. Miramax Film, the circuit said it has consistently held that, as in the Densy claim, "an implied contractual claim is not preempted by federal copyright law." Such a finding is especially important in Hollywood, where ideas are often pitched to multiple producers and studios without the formal protection of a copyright, according to the panel.
     "This approach not only accords with the Copyright Act's preemption guidelines, but it also recognizes the gap that would otherwise exist between state contract law and copyright law in the entertainment industry," Judge Mary Schroeder wrote for the court. "The Desny innovation serves to give some protection for those who wish to find an outlet for creative concepts and ideas but with the understanding that they are not being given away for free. Without such legal protection, potentially valuable creative sources would be left with very little protection in a dog-eat-dog business."
     Writing in dissent, Judge Diarmuid O'Scannlain - who was joined by Judges Ronald Gould, Richard Tallman and Carlos Bea - argued that Montz's claim was sufficiently related to copyright law as to be preempted.
     "Montz does not claim to have sold his rights as a copyright owner," O'Scannlain wrote. "To the contrary, he alleges that he retained those rights, and that Pilgrim implicitly promised not to use or to disclose his ideas without his consent. As the district court properly held, an action to enforce a promise not to use or to disclose ideas embodied in copyrighted material without authorization asserts rights equivalent to those protected by the Copyright Act. Accordingly, the district court's determination that the Copyright Act preempts Montz's claims should be affirmed." (Emphasis in original.)