Tech Firm Denied in Bid for Ownership of Animated Films

SAN FRANCISCO (CN) – Because human beings perform the “lion’s share” of creative work to make hit films successful, a technology firm can’t claim ownership of animated movies produced by Walt Disney and other major studios, a federal judge ruled Wednesday.

U.S. District Judge Jon Tigar dismissed copyright claims against the film studios without prejudice, but refused to dismiss some claims of patent and trademark infringement.

The judge rejected arguments that movies like the hit 2017 film “Beauty and the Beast” could not have been made with the same spectacular visual effects without using a stolen version of “facial performance motion capture” technology.

San Francisco-based Rearden LLC sued Disney, Twenty-First Century Fox, Paramount Pictures and video game maker Crystal Dynamics in July 2017. The technology firm claims the studios knowingly contracted with a Chinese company that stole Rearden’s MOVA Contour technology to create top-grossing films and games.

Rearden asked Tigar to ban distribution of the 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.

Tigar on Wednesday found that human creativity outweighs the role of technology when it comes to making animated films.

“The court does not find it plausible that the MOVA Contour output is created by the program without any substantial contribution from the actors or directors,” Tigar wrote in his 20-page ruling.

Rearden says its technology captures the subtleties of actors’ facial performances and transforms them into 3-D animations. Tigar found those subtleties and other creative choices by actors and directors represent the “lion’s share” of creative work in making the films. Therefore, Rearden cannot claim to own copyrights for those films or control their profits and distribution.

On claims of patent infringement, the judge found the studios could not be held liable for direct patent infringement because they did not directly use the allegedly stolen technology to create the films. Rather, they hired a Chinese company, Digital Domain 3.0, or DD3, to provide the technology.

“Rearden merely alleges that Disney contracted with DD3 to provide a service,” Tigar wrote.

However, the judge refused to dismiss claims the studios induced DD3 to infringe Rearden’s patents.

Rearden claims it was standard practice for Disney and other studios to conduct intellectual property due diligence before hiring an outside firm to use its technology. Rearden further alleges that Disney knew Rearden owned the technology because Disney worked with Rearden in the past, and had learned about a former employee’s efforts to sell the technology without authorization when Disney tried to acquire the patents.

“Assuming the truth of these allegations, it is not an unreasonable inference that Disney became aware of Rearden’s patents, and continued to be aware that the MOVA technology was patented when it contracted with DD3,” Tigar wrote. “The allegations are inarguably thin, but they are enough to survive a motion to dismiss.”

The judge also refused to dismiss claims that the film studios infringed Rearden’s trademark by featuring the MOVA mark in film credits, advertisements, and promotional statements about the movies.

The studios argued that use of the MOVA mark was in reference to a technology, not a company, and that it was fair use. Tigar found it premature to conduct a fair use analysis at this stage of litigation.

The Walt Disney Company and attorneys for Rearden and Disney did not immediately return emails and phone calls seeking comment Wednesday morning.

Rearden is represented at Rio Pierce of Hagens Berman Sobol Shapiro in Berkeley. Disney is represented by Kelly Klaus of Munger Tolles & Olson in San Francisco.


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