Last time: well, last time there was just way too much to summarize, so just click here to read it if you haven’t already.
Basically, with a trial date set for January 31, 2017 and no settlement announced yet, the case has entered the discovery phase. (So yes, “Star Trek: Discovery” now means two totally different things to CBS!)
During discovery, both the plaintiffs and the defendant must provide the other side with any piece of evidence they ask for that is relevant to the case. Witnesses are questioned (deposed), documents are collected and shared, and queries are submitted in writing requiring honest and open answers…and all this months before a jury is ever seated and the clerk says, “This courtroom will now come to order.”
The vast majority of civil cases never get past the discovery phase…believe it or not. Most cases are settled at some point before the trial begins because one side or the other either realizes 1) they can’t win, 2) settling for an agreed upon amount would cost less than a drawn-out litigation or a large punitive verdict, or 3) something comes out in discovery that one side or the other doesn’t want becoming a matter of public record.
As I’ll explain shortly, I suspect CBS and Paramount will encounter the third scenario. That said, I need to state up front that I am not a lawyer and I have no formal legal training. And although my wife is a litigator with a large firm here in Los Angeles, she refuses to discuss the Axanar case with me at all. She has simply confirmed to me that, yes, the vast majority of civil cases she handles do, indeed, settle before they reach trial.
Now, this might just be my view from the cheap seats, but Ares Studios and Axanar only date back about three years while Star Trek dates back fifty years. In other words, I suspect Alec Peters’ legal team at Winston & Strawn will be requesting and receiving a LOT more evidence from CBS and Paramount during discovery than the studios request of him.
One thing I suspect will be requested is all documentation relating to the transfer of ownership of the Star Trek copyright over the years from Desilu Studios through CBS…with stops along the way at Paramount, Gulf+Western, and Viacom. As was mentioned in Axanar’s first response to the initial legal complaint:
Which Plaintiff owns which alleged copyrights is critical to Defendants’ investigation into Plaintiffs’ claims, as it could be that the only works that Plaintiffs are actually alleging Defendants infringed are owned by one Plaintiff as opposed to the other. Plaintiffs’ joint ownership allegation is not plausible in light of the contradicting information in the Complaint regarding assignment, presenting another ground upon which dismissal is proper.
In other words, there might be aspects of the Star Trek copyright that are still owned by Paramount and not CBS, or vice versa. This will affect which studio can make money from licensing what elements. Right now, the two studios have it worked out that CBS pretty much owns everything Star Trek except for the three most recent “Kelvin-verse” feature films, which were specially licensed to Paramount by CBS for the purpose of producing movies. If it sounds kind of convoluted and confusing (and potentially messy), it is. But both studios enjoy a “gentleman’s agreement” of sorts where they don’t push the other to grab more than they have. It works for them.
But if documents produced during discovery threaten to upset that apple cart, the studios will have to think very carefully about proceeding further in the case. Any evidence produced during discovery becomes a matter of public record once the actual trial starts. And a judge’s ruling, such as, “Paramount Pictures has no legal standing to remain as a plaintiff in this case because they do not own the Star Trek copyright,” can have a potentially disastrous impact on Paramount’s ability to generate revenue from licensing Star Trek in any form. And right now, Paramount can use all the revenue it can get!
And speaking of disasters, transferring the ownership of a copyright properly is a very well-defined procedure in law. If it wasn’t handled properly along the way (and remember that we’re talking transfers dating back to the 1960s), the judge could actually rule that neither CBS nor Paramount can claim any legal ownership of the Star Trek copyright. I’m NOT saying that such a thing will happen, but if it does: triple red alert! CBS and Paramount do NOT want such a determination of their non-ownership of Star Trek to EVER be uttered aloud…especially by a federal judge! If the case is suddenly dropped (not settled but dropped) seemingly for no reason before reaching trial, chances are, that’s what happened.
But there are actually a few other things that could go wrong during discovery or at the summary judgment phase. What is summary judgment? It’s basically one side or the other asking a judge to decide an aspect of the case (or the whole case) before the trial even begins. In this way, the court and both parties can avoid the time and hassle of a trial entirely if the ruling is so obvious as to not even require a jury. To use my example above, if it turns out that neither CBS nor Paramount has the legal documentation to prove proper transfer of copyright ownership through the entire 50-year history of Star Trek, then neither party has standing to sue, and the trial isn’t necessary. The judge can make that ruling before the trial ever begins. Similarly, if it turns out that CBS owns Star Trek but Paramount doesn’t anymore, then the trial can still continue, but Paramount is dismissed as a plaintiff. Ah, law…
So what else could go wrong for the studios before the case ever gets to trial?
If you look over the infamous amended complaint from the studios, you’ll see that it lists nearly five dozen separate infringing elements from Star Trek featured in Prelude to Axanar…including the uniforms with a gold shirt, triangular-shaped medals, and the Klingon language itself! Each of these elements could present a separate potential legal damages award of $150,000…or $8.55 million in the worst-case scenario for Alec Peters. Yeesh!
So as you can probably imagine, Alec and his defense attorneys are going to want to whittle this list of five dozen violations down at least a little…and so will the judge, most likely, because each alleged violation will take time to defend separately in front of a jury. Just picture in your head the expert witness sitting on the stand, speaking Klingon, in an effort to explain that it’s actually a living language and not subject to copyright. While it could be fun to have a Klingon testify, with 56 other alleged violations to get through, this could be a very looooong trail, and the judge probably doesn’t want that.
And thus will the defense team ask for summary judgment on most, possibly all, of the five dozen violations listed. And let’s say, for the sake of argument, the judge agrees to dismiss the violation dealing with the uniforms because you can’t copyright clothing.
Stop for a moment and consider what this means. A judge has just said that CBS does NOT and CANNOT own a copyright on Star Trek uniforms! There are official licensees making Star Trek uniforms—from Halloween costumes to the amazing Anovos reproductions—and they pay tens or even hundreds of thousands of dollars to CBS for that license. Well, not anymore! A judge has just ruled that CBS doesn’t own Star Trek uniforms, and suddenly anyone can make and sell them.
Uh, oh! This trial to sue an upstart little twerp of a Trekkie making a fan film is now not only costing the studios hundreds of thousands of dollars in legal fees, but it’s also just cost CBS hundreds of thousands in licensing revenue! If I’m Leslie Moonves (head of CBS), I’m gonna tell my general counsel that he’s got some serious ’splainin’ to do!
And that assumes just ONE violation is dismissed by the judge. What if there’s more than one? What if it’s 25 different violations that are ruled not part of the Star Trek copyright? Well, now the licensing revenue impact has just potentially climbed into the millions! And this is a bell that can’t be easily unrung once it comes out of a judge’s mouth in federal court.
So once again, if there’s suddenly an unexpected settlement offered by the studios to Alec Peters that lets him off scot-free, or if the suit is suddenly dropped with no explanation, something like this has probably happened.
But what if the case goes to trial?
Well, there are a number of ways that CBS and Paramount could win the case and still lose. The first is in the amount of judgment awarded. Remember the Chapterhouse case from part 1 of this blog where the final judgement was only $26,000 rather than millions? What if the same thing happened with Axanar? It’s not as far-fetched as some (including the studios) might think!
You see, that $150,000 penalty per violation is based on something known as willful infringement of copyright. But if the infringement wasn’t willful, the legal damages can be as little as $200! Check out this web page and this quote (bolding added by me):
In a case where the infringer sustains the burden of proving, and the court finds, that such infringer was not aware and had no reason to believe that his or her acts constituted an infringement of copyright, the court in its discretion may reduce the award of statutory damages to a sum of not less than $200.
I can hear some of you typing those irate comments already! Please wait one moment and consider something. Before Prelude to Axanar was released, there were about a hundred different Star Trek fan films and series (I counted!) covering more than 250 hours over the span of four and a half decades. NONE of them was ever sued by any Star Trek copyright holder…not Paramount, not Gulf+Western, not Viacom, and not CBS. So if those other fan films weren’t sued, why should Alec Peters have assumed that his fan film suddenly constituted an infringement of copyright?
I would expect blog sites like Fan Film Factor and Star Trek Reviewed will be entered into evidence (geez, maybe I’ll get a subpoena!) by the defense. Their goal won’t be to get all the violations dismissed (although that’d certainly be welcome by the Axanar team). Instead, they’ll be focused toward showing that any infringement that happened was not willful (according to the legal definition I cited above, not the definition by fans rooting against Axanar). Indeed, the burden of proof will likely fall on the plaintiffs to show how Alec had some reason to believe he was infringing…despite him meeting four separate times with studio representatives and not being told by them to stop or alter his proposed film. It’ll be an uphill battle for the studios to get that $150,000-per-violation price tag to stick.
Of course, damages don’t have to be as low as $200 either. Maybe the judge awards $1,000 each for 26 different violations of copyright for example. And that’s $26,000…the same award as was given in the Games Workshop v. Chapterhouse lawsuit. Suddenly, CBS and Paramount don’t look quite as scary. Maybe some Star Trek fan productions even decide to risk a future lawsuit themselves figuring that, with enough crowd-funding, they can likely cover potential minor legal damages. Meanwhile, CBS and Paramount have just risked or even lost hundreds of thousands or millions of dollars of licensing revenue for a measly $26,000 judgment and the effective neutering of their new fan film guidelines.
Another thing that could come out in trial is that Prelude to Axanar was indeed fair use because it was transformative. In other words, a documentary-style fan film would be considered legally permissible because established Star Trek isn’t presented in documentary format. If that happens, expect nearly every major fan film to switch to a documentary style like Prelude to avoid lawsuits in the future. Imagine Tommy Kraft finally producing his Federation Rising sequel to Horizon as a two-hour long documentary about the end of the Romulan War…with no risk of getting sued successfully. If the judge rules fan film documentaries are fair use, then the door is now open to that and the genie is out of the bottle.
So even if CBS and Paramount win this trial, they could still lose. And even with a $26,000 judgment (or even $100,000 or more), Alec Peters could still win. How, you ask?
It’s been reported in a number of places that Alec Peters and Axanar director Rob Burnett are planning to produce a documentary about this whole saga, from making Prelude to Axanar to raising $1.2 million to getting sued. And no matter what happens in this lawsuit, there’s no way for the two studios to stop this ancillary project, as a documentary about the making of a Star Trek fan film is journalistic and does not violate any copyright. So yes, folks, even if we never see the final Axanar movie, Alec Peters could still have the last word.
Now, assuming Alec and Rob are still planning to make this documentary film, going to trial is actually the best possible outcome…regardless of the verdict. Trials make documentaries even more interesting and dramatic. Without the trial, the documentary ends, “And they settled the case quietly.” With a trial, either David beats Goliath or vice versa—happy ending or heartbreaking tragedy. Either way, there’s an emotional punch, and the distribution rights could be worth millions (or so I’m told by a few people in the entertainment business). So if Alec has to pay a judgment in the five- or even six-figure range, and he makes seven figures for his documentary…well, you do the math.
I suspect that, right now, CBS and Paramount can only imagine one outcome to this case: they win outright, the damages are significant, and Alec Peters and Axanar are totally ruined. (And I’m sure some of you folks reading this right now are fist-pumping a “hell, yeah!”) And that is certainly a possible outcome.
But as this editorial points out, even though there’s one way for the studios to win big, there’s a lot of ways where they win but still lose a little, and there’s a few where they potentially lose big. As discovery goes on, it becomes less about desiring the moral victory and seeing justice done and more about crunching the numbers and asking, “Is this really worth it?”
So before you start typing your comments, complaints, rebuttals, and epithets, please remember that I’m not predicting any specific outcome here, my friends…only possibilities. And as Spock said, “There are always possibilities.”