On October 21, 2015, Plaintiff Corinth Films, Inc. filed a complaint against Netflix, Cinedigm Corp., and Cinevision Global Inc., for Netflix's unauthorized internet streaming of an English-dubbed version of the film in its catalog. The underlying Italian version of the film was ruled back in a court case back in 1985 to be in the public domain. However, the Federal Circuit Judge in that case noted that even though the Italian version of the film was found to be in the public domain for the copyright holder's failure to renew the copyright registration, the judge noted that "valid copyrights may still exist with respect to any English language dubbed or subtitled version of the film, even if...the underlying film itself is in the public domain" (Complaint, 3)(citing Int'l Film Exchange Ltd., v. Corinth Films, Inc., 621 F. Supp. 631 (S.N.D.Y. 1985)).
Prior to the Int'l Film Exchange case, an employee of Richard Feiner and Company, the company that assigned the film to the plaintiff in this case, translated the film in the English-dubbed version, which was recorded in the Copyright Office under the Pre-1976 Copyright Law (Complaint, 3). After the English-dubbed version of the film was assigned to plaintiff on September 28, 2007, the copyright registration for the English version was renewed on October 12, 2007 (Complaint, 3).
The murky licensing history of the English version of the film is what brings the case ultimately against Netflix. It is noted in the complaint that Cinevision contends that it has ownership rights in the film through a Quit Claim and Assignment Agreement back in 2003, but the assignment was not between the plaintiff and Cinevision, but different parties entirely (Complaint, 2). Furthermore, as of September 2005, Cinevision was suspended from doing business in California. However, Cinevision licensed distribution rights to the film to Cinedigm in June 2010, even though it was suspended from doing business in California at that time. Thereafter, Cinedigm licensed rights to distribute the film to Netflix.
Questions regarding the contractual arrangement and drafting of the license agreement regarding the English version of the film are what make this case interesting. Factual questions arise as to the chain of title of the film between the plaintiff and Cinevision and whether Cinevision had ownership or even licensing rights in the film, and/or whether Cinevision had the authority to license or sublicense the film to Cinedigm. Even if it is found that Cinevision has either an ownership right or licensing authority to distribute the film (and has the right to assign its license or sublicense in the case Cinevision is found to be a licensee), it is also questionable whether the license agreement between Cinevision and Cinedigm was void given the fact that Cinevision was suspended from doing business under the laws of the State of California. Generally, a licensor that is a company represents and warranties that it has the authority to conduct business and enter into the transaction contemplated in the license agreement. There is also a representation that the company is in good standing as well. Although it would depend upon the governing law of the license agreement and whether Cinevision was authorized to conduct business under the laws of another state governing the license agreement, Cinevision's corporate status could create a potential issue regarding the validity of the license agreement to Cinedigm, and the validity of the subsequent license grant to Netflix.
Other questions regarding the license arrangements among the parties are whether the terms of the licenses granted to Cinedigm and Netflix were beyond the terms of the underlying license grant (assuming this were the case with Cinevision) and whether the internet distribution rights granted were beyond the limited grant of rights to the film.
Netflix never arranged to obtain a license directly from the plaintiff in this case. It remains to be seen what Netflix’s answer will be and the legal outcome of this case. The case may present a costly lesson for Netflix on the importance of due diligence prior to acquiring a film for its growing catalog.
Here is a link to the Hollywood Report article, with a link to the complaint: http://www.hollywoodreporter.com/thr-esq/netflix-hit-copyright-lawsuit-classic-833908