The U.S. District Court for the Southern District of New York granted in part and denied in part a documentary production company’s motions to dismiss with respect to its 2012 film Venus and Serena. The Court found that the plaintiff United States Tennis Association’s (“USTA”) unjust enrichment claim under state law was preempted by federal copyright law, but allowed its promissory estoppel claim to proceed.
The USTA is a not-for-profit organization which governs tennis in the United States and stages the annual US Open tournament. The USTA grants licenses to third parties to record and broadcast footage of the US Open, and also licenses the use of archival footage from the tournament, including “footage of on-court match play, award presentations, press conferences, player interviews and “8 Roll” footage of the stands and grounds” of the stadium.
In 2011, filmmakers Maiken Baird and Michelle Major approached the USTA regarding the use of footage from the USTA’s archives and behind the scenes footage of the 2011 US Open in their documentary film about the lives of Venus and Serena Williams. In their letter to the USTA, Baird and Major stated that “…we are entirely willing to agree to film only where and what your organization will allow.” The USTA agreed to work with Baird and Major, subject to its standard licensing policies and “rate card.” Baird and Major agreed to this arrangement and provided a “wish list of footage” they wished to obtain, including “Venus and Serena playing their matches with on court sound (which we understand we will have to license).”
Baird and Major began working with the USTA’s PR department concerning the “details, scope and parameters” of the footage that the USTA’s videographer would be allowed to record to be subsequently licensed to the filmmakers. However, the USTA’s videographer became unavailable and, as a “one time concession,” the USTA permitted Baird and Major to bring their own film crew to the tournament to record footage for use in their film. This concession was made with the understanding that Baird and Major would enter into the USTA’s standard footage license agreement for any footage actually used in their film and would “film only where and what [the USTA would] allow.”
Following the 2011 US Open, the parties continued to negotiate. Ultimately, however, a contract was never signed and the filmmakers never paid any license fees to the USTA. According to its complaint, the USTA believed that Baird and Major’s project had been abandoned, or that the filmmakers had decided not to incorporate any US Open footage therein. However, the USTA subsequently discovered thatVenus and Serena had been commercially released in theaters and on cable television and included twenty minutes (of a ninety minute running time) of US Open footage. The footage included eight minutes of archival match footage and twelve minutes of footage captured by Baird and Major at the 2011 Open.
The USTA brought a claim for copyright infringement (which the filmmakers did not challenge in their motion to dismiss), unjust enrichment and promissory estoppel. On the filmmakers’ motion to dismiss, the court dismissed the unjust enrichment claim but permitted the promissory estoppel claim to advance to the next round.
To plead an unjust enrichment claim, a plaintiff must allege that (1) the other party was enriched; (2) at the plaintiff’s expense; and (3) that it is against equity and good conscience to permit the other party to retain what is sought to be recovered.
Here, defendants Baird and Major disputed the USTA’s unjust enrichment claim, arguing that it is preempted by the Copyright Act. Section 301 of the Copyright Act preempts a state law claim when “(i) the work at issue comes within the subject matter of copyright” and “(ii) the right being asserted is equivalent to any of the exclusive rights within the general scope of copyright.”
The defendants argued that the unjust enrichment claim was made in connection with their “misappropriation” of Open film footage, a work of authorship that falls within the “subject matter” of the Copyright Act. In response, the USTA argued that the unjust enrichment stemmed not from the misappropriated footage (i.e., the archival match footage), but from the access to the National Tennis Center and Baird and Major’s subsequent filming of tennis footage, along with the exploitation of that footage without permission. The USTA argued that it has the right to restrict who may obtain footage at the Open, to set conditions for recording, and to charge a fee for filming such footage. It claimed that it “would have never agreed to the total length of the US Open footage used, or to certain of the subject matter depicted in the footage determined by the USTA not to be in the best interest of the sport,” which unjustly enriched Baird and Major.
The Court held that the USTA’s unjust enrichment claim was preempted by the Copyright Act because the claim “involves a work that falls within the subject matter of copyright and the right it is asserting is equivalent to the rights within the general scope of copyright.” While the Court noted that “proof of defendant’s enrichment is required for an unjust enrichment claim, but not for a copyright infringement claim,” it stated that this additional burden does not “render the state law claim “qualitatively different” from the rights protected by copyright law.”
Under New York law, a cause of action for promissory estoppel requires the plaintiff to prove: “1) a clear and unambiguous promise; 2) reasonable and foreseeable reliance on that promise; and 3) injury to the relying party as a result of the reliance.”
Baird and Major argued that the promissory estoppel claim must be dismissed because they never made a clear promise to abide by the USTA’s policies. They contended that their statements to the USTA reveal solely that they were “willing to film only where and what your organization will allow” and that, during negotiations, they would need to seek a license for footage of “Venus and Serena playing their matches with on court sound.” The filmmakers argued that these statements were misconstrued to allege an understanding that they would license all US Open footage and “otherwise comply with the USTA’s policies” on a broader basis. Baird and Major claimed that nothing in the USTA’s complaint evidences or event alleges that they knew of such policies or promised to abide by them.
However, the Court noted that in its complaint, the USTA alleged that it “advised defendants that a necessary condition to any license agreement would be a restriction on the time period in which the Film could be aired on cable and on-demand television.”
The filmmakers also argued that there was no “clear and unambiguous promise.” However, the USTA plead that it had alleged a number of specific promises made by Baird and Major, upon which it relied in allowing them access to the National Tennis Center. These included the filmmakers’ statement that they were “willing to film only where and what your organization will allow” and that, at some point, Baird and Major thought they would need to seek a license for footage of “Venus and Serena playing their matches with on court sound.”
The Court held that the USTA’s complaint asserts that it was injured as a result of its reasonable and foreseeable reliance on Baird and Major’s promises, as it granted them access to record footage from the 2011 US Open (which was included in their film) without receiving any license fee or other compensation. Accordingly, the Court denied the defendants’ motion and declined to dismiss the promissory estoppel claim.
In defending against the motion to dismiss, the USTA focused on the defendants Baird and Major’s alleged abuse of the access they had been granted to the 2011 US Open. The Court’s dismissal of the USTA’s unjust enrichment claim is arguably a blow to all live events venues and rightsholders, as it denies them an additional state law recourse in the event that a third party films footage without authorization, or surpasses the agreed scope of a legitimate license. The Southern District declined to discuss at length the USTA’s assertion that “would have never agreed to the total length of the US Open footage used, or to certain of the subject matter depicted in the footage determined by the USTA not to be in the best interest of the sport,” preferring to lean on a straightforward reading of the statute and established precedent that the “overwhelming majority” of courts in the Second Circuit have held that an unjust enrichment claim based upon the copying of subject matter within the scope of the Copyright Act is preempted. The decision is unusual in that it dismissed a claim regarding footage notowned by the plaintiff, but where the copyright interest more appropriately lies with the defendants – although the language of the complaint did not clearly specify which footage was at issue.
On the other hand, the Court’s refusal to grant Baird and Major’s motion to dismiss with respect to the USTA’s promissory estoppel claim should serve as a warning to filmmakers that, even absent a signed agreement, they can be held to deal terms agreed to via email or phone correspondence. Thus, filmmakers could find their use of footage restricted or enjoined under a promissory estoppel theory, even in instances where they created the footage themselves and would otherwise enjoy unrestricted use under their sole copyright ownership. Accordingly, representatives of live venues and other rightsholders would be well advised to consistently stipulate the necessity of a license upfront, even at the tentative discussion phase, in order to maximize their ability to enforce an agreement even without a signed contract.