Focal Point Films, LLC v. Sandhu

Background

Focal Point Films, LLC and its sole member, Bryan Gibel, brought a copyright action seeking a declaration that Gibel was the sole author of the documentary film Sign My Name to Freedom. The film had not been completed. Gibel alleged that Arjot Sandhu worked as an extra camera operator during several shoots and later helped with fundraising. He offered her an Associate Producer credit, but the parties did not reach a written agreement.

Sandhu alleged that she made numerous creative contributions, including conceiving, directing, filming, editing, and helping shape the film. She sought a declaration that she was a co-author and owned an undivided copyright interest. She also asserted counterclaims for unjust enrichment, intentional interference with prospective economic relations, false advertising and unfair competition under the Lanham Act, and false advertising and unfair competition under California’s Unfair Competition Law.

Gibel moved under Rule 12(b)(6), which allows dismissal when a pleading does not state a legally sufficient claim, seeking dismissal of Sandhu’s Lanham Act, California unfair-competition, and intentional-interference counterclaims. He also sought dismissal of Sandhu’s request for punitive damages.

Lanham Act counterclaim

Sandhu alleged that Gibel and Focal Point falsely represented that the film was Gibel’s sole work without crediting Sandhu as a co-author. She argued that the alleged misrepresentation concerned the film’s nature, characteristics, or qualities and therefore supported a false-advertising claim under section 43(a)(1)(B) of the Lanham Act. She also argued that the statements injured her reputation in the documentary-filmmaking community.

The court rejected those arguments. Relying on the Supreme Court’s decision in Dastar and the Ninth Circuit’s decision in Sybersound, the court held that the counterclaim was fundamentally based on alleged misrepresentations about authorship and co-ownership. The court concluded that such allegations did not state a false-advertising claim under the Lanham Act. The court also concluded that Sandhu’s alleged reputational injury arose from the same authorship-related statements and therefore did not avoid that defect. The Lanham Act counterclaim was dismissed with leave to amend because Sandhu might be able to allege commercial reputational injury not based on statements about her authorship.

California Unfair Competition Law counterclaim

Sandhu argued that her California Unfair Competition Law claim was broader than her Lanham Act claim and rested on both unlawful and unfair conduct. The court ruled that the claim failed to the extent it was based on the Lanham Act because California claims under the statute are substantially congruent with Lanham Act claims. The court also rejected the separate theory that Gibel’s conduct was unfair, finding that Sandhu had not alleged an incipient antitrust violation or conduct that significantly threatened or harmed competition. The court dismissed the California claim with leave to amend.

Intentional interference counterclaim

Under California law, a claim for intentional interference with prospective economic relations requires, among other things, an independently wrongful act—conduct unlawful for a reason beyond the interference itself. Sandhu argued that unjust enrichment and the alleged reduction of her copyright interest supplied that independent wrong.

The court disagreed. It found that Sandhu’s unjust-enrichment theory did not establish independently wrongful conduct. It also found that her copyright declaratory-judgment claim was simply a request to determine her copyright interest and did not satisfy the independent-wrong requirement. The court further ruled that Gibel’s alleged threat of legal action did not qualify. The intentional-interference counterclaim was dismissed with leave to amend because a viable amended Lanham Act claim could potentially satisfy the independent-wrong requirement.

Punitive damages

The court agreed that Sandhu had not alleged even conclusory facts showing malice or fraudulent intent. It also stated that punitive damages are unavailable under the Copyright Act and that Sandhu had cited no authority allowing them for unjust enrichment. Because intentional interference can support punitive damages and Sandhu was allowed to amend that claim, the court permitted her to amend the punitive-damages request as well.

Disposition

The court granted the motion to dismiss. It dismissed Sandhu’s third, fourth, and fifth counterclaims with leave to amend. The amended counterclaims were due no later than January 24, 2020. The opinion does not state that Sandhu’s copyright declaratory-judgment or unjust-enrichment counterclaims were dismissed by this order.