Rearden LLC v. Twentieth Century Fox Film Corporation

Background

Rearden LLC and Rearden Mova LLC sued defendants, alleging copyright, trademark, and patent infringement based on the alleged use of Rearden’s MOVA Contour Reality Capture Program in the production of defendants’ motion pictures. The order addresses defendants’ motion for reconsideration of the court’s August 17, 2021 summary-judgment order. That earlier order granted summary judgment for defendants as to Terminator: Genisys, Avengers: Age of Ultron, Night at the Museum: Secret of the Tomb, and Fantastic Four, but denied summary judgment as to Beauty and the Beast, Guardians of the Galaxy, and Deadpool.

The present motion concerned only the earlier denial of summary judgment for Guardians of the Galaxy and Deadpool. The order also concerns a companion case involving Rearden and The Walt Disney Company; the court states that the defendants’ motions in both cases would be granted.

Legal standard

Under Ninth Circuit law, a copyright owner seeking indirect profits under 17 U.S.C. § 504(b) must present sufficient non-speculative evidence to create a factual dispute about a causal connection between the alleged infringement and the profits generated indirectly from it. The defendants sought reconsideration under Local Rule 7-9(b)(3), arguing that the court had failed to consider material facts or dispositive legal arguments previously presented.

Court’s analysis

For Guardians of the Galaxy, Rearden relied on a draft press release referring to MOVA and an online interview with Kevin Feige, identified in the order as the president of Marvel Studios. The court found no evidence that the draft press release had been released publicly and said it could only speculate about any effect on viewership or defendants’ gross revenues. The court also found no evidence that the interview’s reference to facial-tracking dots resulted in movie sales or other revenue.

For Deadpool, Rearden relied on a 19-second excerpt from an 80-minute promotional featurette that appeared on a Blu-ray, DVD, or stream of the film. The court found no evidence that the featurette promoted the movie because it could be viewed only by someone who had already purchased or rented it. Rearden offered only a claimed likelihood that a viewer might later decide to see the film in a theater, without expert or other evidence supporting that connection.

The court contrasted this evidence with the evidence concerning Beauty and the Beast. There, Rearden had pointed to a trailer containing at least nine clips based on MOVA technology, record trailer views, studies concerning how trailers affect movie discovery and attendance, and testimony and declarations linking trailer views with box-office revenue. The court said Rearden provided no similar causal evidence for Guardians of the Galaxy or Deadpool.

Rearden alternatively argued that MOVA reduced defendants’ costs and thereby increased profits. The court did not decide whether cost savings could legally substitute for evidence of increased gross revenue because Rearden had not shown that MOVA actually reduced costs for either film. The cited expert testimony indicated that MOVA could provide higher-quality facial performances or require less labor than traditional techniques, but it did not establish the actual comparative costs or any savings for these films.

Disposition

The court concluded that it had erred in denying summary judgment as to Guardians of the Galaxy and Deadpool. It therefore granted defendants’ motions for reconsideration. The conclusion does not separately state a disposition using the phrase “summary judgment granted,” although it says the earlier denials of summary judgment were erroneous. Judge Jon S. Tigar signed the order.