Transfer of ‘Pirates’ Suit to California Stayed

MANHATTAN (CN) - The 2nd Circuit agreed Monday to consider whether the multibillion-dollar copyright dispute over the "Pirates of the Caribbean" movie franchise belongs in California.

Florida screenwriter Royce Mathew began fighting the Walt Disney Co. soon after the popular film series debuted in 2003, claiming the movies use supernatural characters, plots and themes he developed in the 1980s.

Disney has claimed that it "independently created" similar characters and story lines based on the artwork for one of its theme parks in Orlando. The company pointed to a book featuring one of the scenes that purportedly inspired the distinctive "Pirates" characters as evidence for its claim.

Supernatural story elements, such as a curse that causes pirates to become living skeletons under the moonlight, were primarily based on theme-park artwork a Disney artist had designed before Mathew's copyrighted works existed, Disney said.

Mathew dropped the Orlando lawsuit before the court issued any rulings, and his attorneys filed a second lawsuit in California that settled in 2007 with Mathew and Disney releasing all claims against each other stemming from the "Pirates" movies up to that point.

Then in 2009, Disney published a book that featured the same scene Disney had relied on in the settlement, by a different author. Mathew said there were serious discrepancies between the newly published scene and what Disney had represented in 2006 as the artwork to support its independent creation position.

Disney allegedly ignored Mathew's demands for an explanation, leading him to file a new copyright-infringement action in Orlando.

When the court dismissed the case before ruling on the merits, Mathew brought his claims to Manhattan, arguing that Disney had continued to infringe his copyrights after settling the previous dispute in 2007. He also asked for rescission of the allegedly fraudulent settlement agreement.

U.S. District Judge John Koeltl granted Disney's request to transfer the lawsuit to California, the state of its headquarters, in March.

On Monday, 2nd Circuit Judge Susan Carney granted Mathew an administrative stay pending the federal appeals court's consideration of his petition for a writ of mandamus.

That petition to vacate the transfer order says Koeltl divested Mathew "of his properly chosen New York forum for his copyright claims - without addressing critically important aspects of Second Circuit precedent, in the copyright context, indicating that petitioner's copyright case cannot legally be transferred to respondents' preferred forum."

A three-judge appellate panel will expedite consideration on the merits of Mathew's motion for a stay, the order states.

Denial of an interim stay "may rise to the level of irreparable harm" for Mathew, that motion states.

Disney meanwhile said Mathew's "argument gives a new meaning to the word harm."

"Not only has plaintiff failed to make a strong showing that he is likely to succeed on the merits, he has made no showing at all," the opposition brief from Disney states.

Disney is represented by Hogan Lovells attorney Sanford Litvack in Manhattan.

Mathew's attorney Michael Wolk called the 2nd Circuit's stay "an important development."

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