Ruling means technology owner Rearden’s IP infringement lawsuits and discovery efforts can continue.
The tangled legal web surrounding the IP infringement fight between Reardon, owner and inventor of the MOVA Contour Reality Capture (Contour or MOVA) technology, and Disney, Marvel, Fox, Paramount, Digital Domain 3.0 (DD3), Crystal Dynamics and Square Enix, got a tad clearer, or at least, greenlit to press on, with the presiding judge’s ruling last week denying the defendants’ motions to dismiss and grant summary judgment.
At issue is the alleged fraudulent transference of ownership rights and unlawful use of the technology in the production of many of Hollywood’s biggest films. Contour is an Oscar-winning, copyrighted, and patented motion picture technology that has been used in films to capture subtle facial performances from actors such as Brad Pitt in The Curious Case of Benjamin Button, Daniel Radcliff and Rupert Grint in Harry Potter and the Deathly Hallows, Parts 1 and 2, and many other blockbuster movies.
According to a press release issued by plaintiff attorney Hagens Berman, the order from U.S. District Judge Jon S. Tigar denying in part the motions to dismiss, states that Rearden has shown the defendants had the right to control the infringements and received direct financial benefit from their use of Rearden’s stolen IP. Thus, the order states, Rearden “sufficiently alleged vicarious copyright infringement.” Judge Tigar also sided with Rearden in its demonstration that Disney and others knew their use of the IP was not authorized by Rearden and induced the direct copyright infringements. Thus, they may be liable for contributory copyright infringement. Consequently, Judge Tigar denied defendants’ motions to dismiss Rearden’s vicarious and contributory copyright infringement claims.
In other words, the parties knew that their use of the MOVA IP, through production services performed by DD3, was infringing on Rearden’s IP ownership rights, and thus, by making use of the work derived from that technology, induced or otherwise authorized the infringement by DD3 to take place.
Tigar’s order denying Crystal Dynamics’ and Square Enix’s motion for summary judgement allows Rearden to continue with the discovery phase of the case, in which it will seek to uncover the terms of a contract that authorized the use of Contour to capture the performance of Camilla Luddington as Lara Croft in the Rise of the Tomb Raider videogame.
“Judge Tigar’s order represents a big win for our client against some of the largest names in the entertainment business, who thought they were too big to be held accountable for their unauthorized use of Rearden’s stolen IP to make their blockbuster hits,” said Steve Berman, managing partner of Hagens Berman. “We’re pleased with the court’s decision and look forward to continuing this case on behalf of the rightful inventor of this ground-breaking technology.”
An extensive Hollywood Reporter article explains how the dispute went public back in 2014 at the SciTech Academy Awards, with LaSalle and three other artists winning the award for “design, development and integration” of the MOVA technology. Silicon Valley inventor Steven Perlman, who was not party to the award, immediately wrote a protest letter to the Academy stating why he and not LaSalle should have been awarded. The report goes on to talk about the FBI’s subsequent involvement in the case out of possible concerns of Chinese economic espionage.
A key factor in these cases revolves around the word “stolen” as it relates to the Contour technology itself. Back on June 17, 2016 Judge Tigar issued a preliminary injunction targeting the two Chinese firms that purchased MOVA from a senior DD3 employee, Greg LaSalle, then licensed it to back DD3. “Shenzhenshi Haitiecheng Science and Technology Co., Ltd. (SHST) and Virtue Global Holdings Limited (VGH) are hereby restrained and enjoined, pending trial, from selling, using, moving, concealing, transferring or otherwise disposing of any MOVA Asset in its possession, custody or control,” the ruling says. The judge found that the two companies behaved “fraudulently” regarding how the technology was transferred between various Chinese companies after SHST acquired it from LaSalle for $25,000 in 2013. This injunction effectively halted everyone’s use of Contour, or work done with the system, until the case was resolved.
The infringement lawsuits, originally filed in U.S. District Court for the Northern District of California in 2017, state that defendants knowingly used Contour to make high-grossing movies including Guardians of the Galaxy, Avengers: Age of Ultron, Terminator Genisys, Deadpool, Beauty and the Beast, the Rise of the Tomb Raider videogame, and others, without authorization from Rearden LLC and Rearden Mova LLC, the plaintiffs in the action and inventors of the technology. This, attorneys say, makes Disney, Fox, Paramount, Marvel, and the suits’ other defendants liable for infringing Rearden’s copyrights, trademarks and patents by using the stolen CG technology in their blockbuster films.
The lawsuits also state that in 2012, a Rearden employee (LaSalle) began secret negotiations with DD3, to sell the Contour system for his personal enrichment, without Rearden’s knowledge. LaSalle had also secretly offered the Contour technology in March 2013 to Disney. Rearden wrote a cease and desist letter to LaSalle in March 2013, reasserting that it owned the Contour intellectual property, that LaSalle had taken it illegally, and that Rearden would take legal action if necessary. According to the complaint, LaSalle shared the demand letter with Disney, which promptly dropped out of negotiations to acquire Contour.
That’s when Shenzhenshi appeared on the scene, claiming that it had bought the Contour technology and licensed it to DD3. In 2013, “LaSalle had access to the secure storage facility where the physical Contour apparatus and program were kept, and assisted DD3 in taking the patented apparatus and copies of the copyrighted Contour Program” without the knowledge or authorization of Rearden, according to the lawsuit.
DD3 then began secretly offering facial performance capture services to motion picture and videogame studios and production companies using Rearden’s Contour technology, including defendants. Meanwhile, LaSalle wrote to his attorneys that by having Shenzhenshi appear to have acquired the Contour technology and licensed it back to DD3, it would “be nearly impossible for the inventor Steve [Perlman] to go after them.”
Photographs in the complaint, a copy of which is attached below, show the exact apparatus developed and constructed by Rearden and stolen by DD3. And statements by Beauty and the Beast co-stars Dan Stevens and Emma Watson confirm that DD3 was using the very same Contour software, system and methods that are covered by Rearden’s patents and copyright. DD3 also even used Rearden’s “MOVA” trademark.
Dan Sarto is Publisher and Editor-in-Chief of Animation World Network.