Disney & Studios Can’t Dodge Claims Over Stolen Technology

SAN FRANCISCO (CN) – Disney and other major film studios cannot dodge lawsuits claiming they used stolen technology to create lifelike animated characters in top-grossing films like “Beauty and the Beast,” a federal judge ruled Monday.

Finding it plausible that the studios knew they were using stolen software and that they directly benefited from that use, U.S. District Judge Jon Tigar refused to dismiss claims of vicarious and contributory copyright infringement.

“Liability here could be very substantial,” Mark Carlson, a lawyer for plaintiff Rearden LLC, said in an interview.

Rearden, a San Francisco-based technology firm, sued the studios last year.

Rearden claims Disney, Twenty-First Century Fox, Paramount Pictures and video game maker Crystal Dynamics knowingly contracted with Digital Domain 3.0, or DD3, a company that acquired a stolen version of its facial performance motion capture technology.

The MOVA Contour technology uses phosphorescent makeup on actors’ faces with synchronized cameras and software to transform the curves, expressions and movements of human faces into lifelike animations.

If Rearden prevails, it could seek damages for lost profits and disgorgement of some box office and distribution earnings, according to Carlson.

“Beauty and the Beast is one film that made over $1 billion,” Carlson said. “The lead character [the Beast] is a [computer generated] character created using our technology so damages there could be very substantial.”

Though Rearden must eventually offer evidence to prove secondary copyright infringement, Tigar found the claims detailed in its amended complaint strong enough to survive a motion to dismiss.

“At this motion to dismiss stage, these allegations plausibly allege that defendants induced, caused, or materially contributed to the infringing conduct,” Tigar wrote in his 12-page ruling.

To win on contributory copyright infringement claims, Rearden must show that the studios knew about the infringing conduct and materially contributed to the infringement.

Rearden will now seek evidence from the defendants and third parties, including actors and actresses who performed in the films, to prove whether the studios knew DD3 was using stolen technology during the film production process, Carlson said.

Tigar did toss claims of direct patent infringement, finding the studios did not directly infringe patents by hiring an outside vendor to provide animation technology services.

Tigar also rejected claims of direct copyright infringement in February, finding humans – not software – perform the “lion’s share” of creative work to produce films and games.

The judge also denied Rearden’s request to ban distribution of the allegedly infringing games and movies, including “Guardians of the Galaxy” (2014); “Avengers Age of Ultron” (2015); “Fantastic Four” (2015); “Terminator: Genisys” (2015); “Rise of the Tomb Raider” (2015); “Deadpool” (2016); “Beauty and the Beast” (2017); and others.

In addition, Tigar advanced Rearden’s claims against video game producers Crystal Dynamics and Square Enix, creators of “Rise of the Tomb Raider,” who contracted with DD3 to animate the game’s star character, Lara Croft.

Carlson is with is with Hagens Berman Sobol Shapiro in Seattle.

Disney attorney Kelly Klaus, of Munger Tolles & Olson in San Francisco, did not immediately return a phone call seeking comment Monday afternoon.

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