BY:
Michael I. Rudell(Originally published in the Entertainment Law column in the New York Law Journal, December 30, 1998.)
A federal court has enjoined the producer and distributor of the motion picture, “I Know What You Did Last Summer” (hereafter “Summer”) from using an advertising campaign which falsely designates that film as originating from the same creator as the motion picture, “Scream.”1 In so doing, the Court indicates that information that is literally true is nevertheless misleading and likely to harm the plaintiff.
In December of 1996, plaintiff, a developer and distributor of motion pictures, released the horror movie, “Scream” (hereinafter “Scream”) in the United States. The film was directed by Wes Craven, an internationally renowned director of horror movies, including “Nightmare on Elm Street” . Seeking to capitalize on Craven’s reputation, plaintiff aggressively marketed Scream as “a Wes Craven product,” both in the United States and abroad. Press materials referred to the film as “Wes Craven’s ‘Scream’” and film critics in the United States and the United Kingdom identified Craven as the creative force behind the film.
Within a year after its release, Scream had worldwide box office receipts of approximately $165 million. It became the highest grossing horror movie ever shown in the United Kingdom. Plaintiff expected to derive additional revenues from merchandising activities related to the film, and from ancillary distribution activities in the home video, pay-per-view, cable, free television and syndicated television markets.
On October 17, 1997, defendants released Summer in the United States. Shortly before the release date, plaintiff learned that defendants were marketing Summer as “from the creator of ‘Scream’”. The marketing campaign described Scream with lines such as “the last time he made you scream, this time you won’t have the chance” and “from the creator of ‘Scream’ comes a new chapter in terror.” Such advertisements dominate the written portions of both the television and print advertisements, and “from the creator of ‘Scream’” appears as a headline in large type in print advertisements and as a voiceover in television advertisements.
The only link between Scream and Summer is that the screenwriter, Kevin Williamson, wrote an original screenplay for the former and adapted a novel by Lois Duncan for the screenplay of the latter. In the television and print advertisements, Williamson’s name appears in the small print credit block as the screenwriter of Summer, but he is not named or otherwise identified as the “creator” to whom the advertisements refer.
In affidavits issued in connection with the proceeding, Williamson describes his role as quite different with respect to each of the films. He does not consider himself to be the “creator” of Summer, and affirms that Wes Craven is the person most reasonably perceived to be the “creator” of Scream. Further, when Williamson was first shown a promotional poster for Summer, he immediately indicated to defendants that “people [will] take this as a reference to Wes Craven,” but defendants purportedly told him that “the public will not be confused because we will do everything necessary to eliminate any confusion and we will make it clear we are referring to you.” (Defendants, in their brief filed in connection with the appeal of the Court’s decision, note that in October of 1997 Williamson attended a press junket for Summer at which he gave numerous interviews while surrounded by posters bearing the phrase “from the creator of ‘Scream’”).
On October 15, 1997, prior to the release of Summer, plaintiff commenced its action and moved for a temporary restraining order and preliminary injunction against defendants’ advertising campaign. At the end of the first preliminary injunction motion that commenced a day later, defendants voluntarily withdrew that campaign in the United States.
The Court indicates that, although not disclosed at that time, defendants already had released the disputed advertising material to distributors around the world, and continued to do so until November 10, 1997. Further, newly created materials, without the disputed phrases, were sent only to those foreign distributors who explicitly requested them.
On December 11, 1997, plaintiff returned to court seeking a preliminary injunction to enjoin the foreign promotion. Plaintiff recently had learned that defendants were releasing the film in the United Kingdom on the following day, and were promoting it in that territory by using the same materials that they voluntarily had withdrawn in the United States. Also, on the same day, plaintiff released “Scream 2,” the sequel to Scream in the United States.
In connection with plaintiff’s second motion for a preliminary injunction, defendants produced a memorandum written on October 28, 1997, by defendant Mandalay’s general counsel. This had been sent to Summit Entertainment, the firm that oversees defendants’ activities with their foreign distributors, but had not been sent by defendants to the foreign distributors. The memorandum cited the existence of a lawsuit and withdrew the warranties concerning the promotional materials which defendants had provided, but did not recommend that the disputed materials be recalled.
Under its agreement with foreign distributors of Summer, defendants are obligated to provide promotional and advertising materials and allowed to disapprove any advertisements which deviate from the materials which they so send. In the agreement between defendants and EFD, their United Kingdom distributor, EFD agreed, if requested, to submit for Mandalay’s approval all advertising materials to be used by EFD in the exercise of any of its rights under the agreement.
On December 15, 1997, the Court issued a temporary restraining order pending the hearing on the preliminary injunction motion scheduled for December 18th. That order was stayed by the Court of Appeals pending the December 18th hearing.
At that hearing, plaintiff presented a consumer survey designed by a professor at the Wharton School showing that 17% to 20% of those who had seen or were about to see Summer thought that the film was a sequel to Scream, that the creator of Summer produced Scream, that the creator of Summer directed Scream, or that the creator of Summer was Wes Craven. Only 1% to 2% of those participating in the survey thought that the advertising for Summer communicated that it was by the writer of Scream or by Kevin Williamson.
The Court credited this testimony as indicating that the advertisements are likely to have a similar impact in the United Kingdom and that there is consumer confusion regarding the advertisements.
In its discussion, the Court indicates that the case is not easy to pigeonhole. It is a false advertising case because the misleading words appear in advertisements and promotional materials. It is analogous to false designation of origin and false endorsement because the advertisements identify the origin of Summer with the origin of Scream and it is analogous to trademark law because defendants’ advertisements identify the source.
The decision analyzes the elements necessary in order for a preliminary injunction to be issued: (a) irreparable harm; and, (b) either (i) a likelihood of success on the merits of the claim, or, (ii) sufficiently serious questions going to the merits of the claim to make it fair ground for litigation and the balance of hardships tips decidedly in favor of the moving party.
In concluding that plaintiff is likely to succeed on its claim that the Scream phrases are misleading, the Court relies on the survey proffered by the plaintiff that shows that an appreciable number of consumers hold false beliefs as to the connection between the two films. Also, plaintiff has established that the advertising campaign is the source of the consumer confusion.
The decision indicates that the instant case is one in which irreparable harm may be presumed. Plaintiff’s case is analogous to three types of Lanham Act claims in which irreparable harm has been presumed if the plaintiff establishes likelihood of success on the merits: false advertising, false designation of origin and false endorsement.
The case most analogous to this one is King v. Innovation Books.2 There the defendant entitled and advertised its motion picture as “Stephen King’s ‘The Lawnmower Man’” a designation of origin that literally was false because King had no involvement in and had not approved the screenplay or the movie. The harm that presumptively faced King, the wrongful attribution of responsibility for a movie over which he had no control and the potential for loss of reputation with the public, is present here.
The likelihood that plaintiff has been harmed is not diminished by the fact that the designation of origin in the King case was literally false whereas the designation in the instant case is misleading. Although plaintiff cannot rely on the presumption of confusion that would be available in a case of literal falseness such as King, plaintiff has been able to demonstrate that defendants’ advertisements confuse consumers in the relevant market about the source of Summer. The type of harm that flows from this confusion does not depend on whether the confusion results from a literally false designation of origin as opposed to a misleading designation of origin. Although the former might, depending on the circumstances of a given case, be presumed to cause a greater degree of harm, it is the type of harm rather than the degree of harm that permits the reviewing court to presume irreparable injury.
The decision notes that its conclusion is reinforced by the manner in which courts resolve irreparable harm questions and false advertising and trademark cases. Irreparable harm has been presumed in false advertising cases involving direct competitors, and because there is credible evidence that Summer competes at the box office with Scream and “Scream 2,” such cases are relevant.
Irreparable harm also has been presumed in cases involving trademark infringement. Even if plaintiff does not have a trademark in Scream, defendants’ advertisements explicitly represent that the source of Summer is the source of Scream, thus performing the same source identification function as would a trademark.
In sum, the harm to be avoided in this case is the same type as the harm to be avoided in the King case and the false advertising and trademark cases discussed above provide guidance as well. Plaintiff has an interest in protecting itself from deceptive association with a product it doesn’t control. Additionally, it has an interest in protecting Scream from source confusion.
Accordingly, the Court ordered that defendants immediately direct in writing all agents, representatives, successors, licensees, distributees and entities to whom any of the foregoing had supplied advertising materials or promotional materials for Summer in territories appearing on the release lists to remove the Scream phrases from all advertising and promotional materials for the film.
Defendants appealed, raising issues as to whether an order entering a mandatory preliminary injunction should be reversed (i) where irreparable injury was presumed rather than proven in a Lanham Act case with no heightened public interest, (ii) where the plaintiff asserting a Lanham Act claim conceded the truth of defendants’ advertisements and proffered only unreliable evidence of consumer confusion which was never linked to the advertisements at issue and (iii) where the District Court directed extraterritorial application of the Lanham Act in the absence of any consumer confusion abroad. After the appeal was brought, the parties settled the dispute.
1 Miramax Films Corp. v. Columbia Pictures Entertainment, Inc., and Mandalay Entertainment, Inc. 996 F. Supp. 294 1998, U.S. District Court for the Southern District of New York (March 5, 1998).
2 976 F.2d 824(2d Cir. 1992).