Lights Camera Antitrust Action

January 16, 2004
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GRAND RAPIDS — When the Golden Globes are handed out Sunday for the best films and performances of last year and when the Oscar winners are named next month, there is likely to be a lot of heartfelt thank-yous expressed at both.

But there probably will be little said about antitrust, intellectual property and piracy at either ceremony.

Yet, those three business issues were the featured coming attractions to the award shows last fall, and a Michigan law firm played a starring role in directing the courtroom drama.

Miller, Canfield, Paddock and Stone PLC, with an office in Grand Rapids, took a case that some firms wouldn’t touch and represented a group of independent filmmakers who filed a lawsuit against the industry’s biggest studios and the Motion Picture Association of America (MPAA).

If the case was a reality TV show, a good title for it might be “David vs. Goliath.”

MGM, DreamWorks, New Line, Paramount, Universal, 20th Century Fox, Sony, Disney, Warner Brothers, and the MPAA would play Goliath. David would be people you’ve never heard of before, but who produced such films as “21 Grams,” “Thirteen,” “Laurel Canyon,” “The Station Agent,” “The Company” and “American Splendor.”

The lawsuit sprang from a statement made last September by MPAA President and CEO Jack Valenti, who said that for the very first time the association and its member companies, the major studios, would not send out any screeners for awards consideration purposes.

Screeners are VHS tapes and digital discs of films that go to those who vote for awards.

MPAA members select the Oscar winners, while the Hollywood Foreign Press picks the Golden Globe winners. Voters of other awards were also to be denied screeners.

Valenti said screeners wouldn’t be sent this year because of the group’s effort to fight piracy, the theft of films through unauthorized duplication and distribution. He added that stopping digital thievery, which violates copyright laws, was the association’s top priority.

“The MPAA intends to employ every weapon at its command,” said Valenti.

But for independent filmmakers, whose movies don’t get widespread distribution like those from the major Hollywood studios, the ban on screeners was devastating news.

“It effectively eliminated a means of rivalry or competition among the dominant producers and distributors of motion pictures. Anytime you have a group of competitors agreeing to eliminate rivalry among themselves, that is substantial,” said Gregory Curtner, lead attorney on the case for Miller Canfield.

“They wanted their films, at least those that are award worthy, to be effectively seen by the voters of the various award-granting bodies,” he added.

Some of the clients Curtner represented as plaintiffs in the case can only get their films shown on 250, or if they’re lucky, 750 screens across the country. In contrast, the latest “Lord of the Rings” movie was playing in 3,703 theaters.

Often the only way that indies can get their films seen by voters is through the screeners, and award-winning films often get redistributed and end up with higher box-office grosses. Two recent examples of that happening were “American Beauty” and “In The Bedroom.”

Curtner argued that what the studios and the MPAA did wouldn’t be any different than if the major automakers agreed to stop offering consumers rebates on new cars. He said both actions would violate the Sherman Act, the nation’s antitrust law.

Miller Canfield got a restraining order against the screeners ban and then turned it into a preliminary injunction. The injunction reversed the ban and allowed filmmakers to send out promotional copies of their movies for review by voters.

Although the MPAA’s intention to protect intellectual property by limiting opportunities to bypass copyright law and stop thievery was virtuous, its action was illegal. At least that is what a federal judge ruled in October. He said the association was guilty of “anti-competitive conduct” and “unreasonable restraint of trade” under the Sherman Act.

“Even if you might have a supposedly good motivation for it, the antitrust laws say that you cannot reduce competition by agreement among a substantially dominant group of competitors,” said Curtner.

The MPAA decided not to appeal, the ban was lifted, a new screening agreement is being tested this year, and VHS tapes went out to voters.

“I think I was the only lawyer in the country willing to take this (case),” said Curtner, who is a friend to one of the plaintiffs. “People are really afraid to take on the studios, but not me.”

So because David felled Goliath, moviegoers get a happy ending. Three performances from films of Miller Canfield clients are in the running for Golden Globes. Evan Rachel Wood is up for lead dramatic actress and Holly Hunter is competing for a supporting-role award. Both were in “Thirteen.” Hope Davis is also seeking the supporting-actress Globe for her work in “American Splendor.”           

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