USCA Second Circuit, March 2, 2009 (summary order)

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The Second Circuit held that plaintiffs’ declaratory judgment and copyright infringement claims against Phoenix Pictures and Mike Medavoy failed because plaintiffs did not hold legal title to copyrights in the screenplay The Thin Red Line. The court affirmed the district court’s grant of summary judgment for the defendants and affirmed the district court’s denial of plaintiff’s motion for summary judgment on defendants’ affirmative defenses as moot.

Regarding plaintiffs’ copyright claim, the Second Circuit held that Briarpatch Film Corp., an entity distinct from plaintiffs, held legal title to the copyrights at issue and that plaintiffs’ contention that Briarpatch Film Corp. transferred legal title to plaintiffs was not supported by any writing, as required by the Copyright Act.

In addition, the court held that plaintiffs, who had invested in the development of the property, failed to provide sufficient evidence that defendants had knowledge that Briarpatch Film Corp., from whom defendants acquired rights in The Thin Red Line, breached any duties to plaintiffs. Under New York law, defendants were bona fide purchasers of the copyrights because they did not have notice that the copyrights they acquired had allegedly been wrongfully obtained, and as bona fide purchasers defendants took title to the copyrights free of any equitable interest that someone else might have claimed.

The court stated that the evidence plaintiffs provided was insufficient for a trier of fact to infer that defendants had knowledge that the actions of Briarpatch Film Corp., Robert Geisler, or John Roberdeau breached any duties to plaintiffs. “At most, the evidence that plaintiffs identify shows that defendants were aware of Rubin’s existence and the fact that he had invested money with Geisler and Roberdeau for the purpose of developing the project to which the copyrights related. That knowledge, however, is not enough to allow a reasonable inference that defendants (1) were aware that Rubin had any specific relationship with Briarpatch Film Corp., Geisler, or Roberdeau, and (2) were further aware of specific terms of such a relationship that Briarpatch Film Corp., Geisler, and Roberdeau were breaching.”

The court also held that plaintiffs’ claim that defendants aided and abetted a breach of fiduciary duty failed for the same reasons. Plaintiffs’ evidence was insufficient to allow an inference that defendants had knowledge of a limited partnership agreement between plaintiffs and Briarpatch Film Corp. and its terms, “let alone an inference that defendants knew that Briarpatch Film Corp., Geisler and Roberdeau were going to fail to comply with those terms.”

The court remanded plaintiffs’ motion for attorneys’ fees and costs relating to a defaulting defendant to the district court so that the district court could articulate its reasons for denying plaintiffs’ motion.