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Thursday, July 12, 2012

Suit over USA Network's "Royal Pains"

Forest Park Pictures alleges that it created what the industry calls a "series treatment" for a television show called “Housecall,” featuring a doctor who, after being expelled from the medical community for treating patients who could not pay, moved to Malibu, California, and became a “concierge” doctor to the rich and famous.  Forest Park presenting this material to USA Network (“USA”) both in writing and in a face-to-face "pitch." Below is the opening scene of Robert Altman's "The Player" illustrating what a pitch is like:

 

Forest Park alleges an implied agreement by USA to pay reasonable compensation if its ideas were used.  Although Forest Park and USA exchanged further communications, discussions ultimately fell off with no formal agreement to produce the show. 

About four years later, USA produced and aired “Royal Pains,” a television show suspciously simlar to "Housecall."  Forest Park then sued USA for breach of the implied agreement.   The district court granted USA’s motion to dismiss on grounds that the Copyright Act preempted the claim and that the contract was too vague to be enforced.  On appeal, the Second Circuit Court of Appeals vacated and remanded.

Section 301 of the Copyright Act expressly preempts a state law claim only if (1)” the work at issue comes within the subject matter of copyright and (2) the right asserted is equivalent to any of the exclusive rights within the general scope of copyright.” However, if the state law claim includes an  element that supplants or supplements the elements of a copyright infringement claim, there is no preemption.  In this case, the Second Circuit found that Forest Park's claim was not preempted because it alleged that USA had promised to pay Forest Park  for the use of its ideas, an element that made its claim "qualitatively different from a suit to vindicate a right included inthe Copyright Act."  In addition, a copyright grants the owner exclusive rights against the world, whereas a breach of contract claim provides no exclusive rights and asserts rights only against the contractual counterparty. 

The Second Circuit then moved on to consider whether Forest Park had alleged a breach of an implied-in-fact contract.  California has long recognized that an implied-in-fact contract may be created where the plaintiff submits an idea that the defendant subsequently uses without compensating the plaintiff.  Although USA argued that even if the parties were part of an implied-in-fact agreement, the agreement could not be enforced because it lacked a definite price term.  However, California courts allow the enforcement of contracts that lack exact price terms as long as the parties’ intentions can be ascertained.  Taking into account the industry custom of pitching an idea for payment, the court remanded back to the District Court, giving Forest Park a chance to prove that such an industry standard price exists and that both parties agreed to it.

We learn from Wikipedia that "Royal Pains" was renewed for its fourth season last September.

[JT and Chirstina Phillips]

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