Copyrights & Contracts: Montz v. Pilgrim Films

Contracts governing the use of creative works are now common. An important emerging question is whether and when contractual provisions are preempted by the federal Copyright Act. The Supreme Court has never tackled the issue. And today, the Court denied review in Montz v. Pilgrim Films, a case decided en banc in May by the U.S. Court of Appeals for the Ninth Circuit. The question in the case was whether the Copyright Act preempts an agreement between a screenwriter and a producer in which the screenwriter agrees to shows a movie script to the producer on the understanding that if the producer later uses the ideas embodied in the script the producer will pay the screenwriter compensation. The Ninth Circuit held that such an agreement is not preempted by federal copyright law. According to the court, allowing these kinds of contracts, known in the business as “Desny” agreements (after a 1956 California state court decision), promotes creativity: “The Desny innovation serves to give some protection for those who wish to find an outlet for creative concepts and ideas but with the understanding that they are not being given away for free. Without such legal protection, potentially valuable creative sources would be left with very little protection in a dog-eat-dog business.”

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