Intellectual Property

Strange Things Happening? How Implied-In-Fact Contracts May Succeed Where Copyright Infringement Claims Can’t Do So

Claiming an implied-in-fact contract based seems a no-so-veiled backdoor attempt to obtain recourse when copyright infringement claims won’t pass muster.

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Having grown up through high school and college in the 1980s, it should come as no surprise that I am a fan of the Netflix series Stranger Things.  Part 80s retro-nostalgia, part science fiction-thriller mixed with a healthy dose of paranormal mystery, the series revolves around a group of adolescents living in the fictional town of Hawkins, Indiana.  Stranger Things is like a cherished mix-tape of the era, combining some of the most iconic themes of the 1980s within a thematic construct that Stephen King would (and according to his Twitter praise, does) admire.  This series has been wildly successful for Netflix, garnering a devoted fan base (yours truly included).  Unfortunately, this series is no stranger to controversy, namely the litigation filed in Los Angeles Superior Court by filmmaker Charlie Kessler against the creators of the series, Matt and Ross Duffer, claiming that they “stole” Mr. Kessler’s ideas to create the series.  Oddly, “Stranger Things” is an accurate title for this dispute, at least as far as the underlying cause of action is involved.

The case stems from an alleged meeting between Mr. Kessler and the Duffer Brothers during the Tribeca Film Festival at a party in New York in 2014 where Mr. Kessler allegedly discussed the concept underlying his 2012 short film, Montauk (a six-minute teaser involving a boy, a government facility on the beach in that area of Long Island, NY, that Mr. Kessler apparently wanted to turn into a feature film to be titled “The Montauk Project”).  According to Mr. Kessler’s complaint as relayed by The Hollywood Reporter, the Duffer Brothers liked his concept, so much so that they used his ideas as the basis for creating Stranger Things. In defense, the Duffer Brothers completely deny that the alleged conversation at a film festival party has anything to do with their development of Stranger Things, claiming that they began developing the concept in 2010, never saw his short film, and that the lawsuit is baseless and without merit.  So far, you have probably heard this type of fact pattern many times before when it comes to copyright infringement, except for one thing:  Mr. Kessler’s lawsuit doesn’t claim copyright infringement. Are you getting a Stranger Things vibe yet?

The basis for Mr. Kessler’s claim against the Duffer Brothers is not copyright infringement, but rather, implied contract.  That’s right — as a result of the meeting between Mr. Kessler and the Duffer Brothers, he claims that they reviewed his script for The Montauk Project, expressed an interest in working with him during their conversations, and that this interaction formed the basis for an implied contact for the parties.  The Duffer Brothers moved for summary judgment, but the judge ruled in favor of Mr. Kessler, finding that triable issues of fact exist regarding the creation of an implied-in-fact contract. Oddly, the trade publication Variety reported that the Duffer Brothers originally sold Stranger Things to Netflix under the name “Montauk” back in 2015.  Strange, indeed. Although discovery in this case may parse more facts about this interaction between the parties, the underlying claim is breach of implied contact, not copyright infringement.

This begs the question: why no claim of copyright infringement?  Because copyright generally does not protect such underlying ideas and concepts.  Under the Copyright Act, copyrights protect original works of authorship fixed in a tangible medium of expression.  Specific plot elements and concepts simply do not rise to the level of protectable expression; Section 102(b) makes clear that “[i]n no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.”  For example, a group of kids working together to overcome a paranormal antagonist is nothing new — fans of Stephen King would recognize this plot devise from his novel It, using a group of kids calling themselves the Loser’s Club to overcome an evil entity that manifests itself as Pennywise the Clown.  Stranger Things Season 1 uses a similar plot device when its adolescent stars work together to save one of their own from an alternate dimension (and its monsters) opened by secretive government experiment at a research facility in the town.  Creepy? Yes.  Infringement? No.  Copyright law protects original expression, and when it comes to repackaging a popular genre of repurposing known plot devices or themes, there may not be enough to claim a derivative work that rises to the level of copyright infringement.

Unfortunately, this is where things get, well, strange — claiming an implied-in-fact contract based upon conversations or industry interactions seems a no-so-veiled backdoor attempt to obtain recourse when copyright infringement claims won’t pass muster.  Of course, such claims are a far cry from seeking statutory damages under copyright law. The plaintiff has a substantial burden of proving the implied-in-fact contract under state law, as opposed to copyright infringement claims where the burden of proving the existence of a valid copyright and that the defendant infringed it is an easier lift.  Here, there are some legitimate questions that need to be resolved between Mr. Kessler and the Duffer Brothers regarding his claims; however, I worry that breach of implied contract may be the new norm when it comes to claims of “concept theft” regarding original works of authorship that fail the copyright infringement test.  Maybe I am just being paranoid and reading too much into it, or maybe I am touching on the tip of the proverbial litigation iceberg when it comes to claims of “concept theft” of entertainment properties.  Either way, stranger things have happened.

Tom Kulik is an Intellectual Property & Information Technology Partner at the Dallas-based law firm of Scheef & Stone, LLP. In private practice for over 20 years, Tom is a sought-after technology lawyer who uses his industry experience as a former computer systems engineer to creatively counsel and help his clients navigate the complexities of law and technology in their business. News outlets reach out to Tom for his insight, and he has been quoted by national media organizations. Get in touch with Tom on Twitter (@LegalIntangibls) or Facebook (www.facebook.com/technologylawyer), or contact him directly at tom.kulik@solidcounsel.com.

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