LLC v. Sony Corp.

• Decision Date: 27 August 2001
• Docket Number: METRO-GOLDWYN-MAYE,INC,PLAINTIFFS-APPELLEES,No. 00-55781,DEFENDANTS-APPELLANTS,00-55781
• Citation: 263 F.3d 942
• Parties: (9th Cir. 2001) DANJAQ LLC, A DELAWARE LIMITED LIABILITY COMPANY;, A DELAWARE CORPORATION; UNITED ARTISTS CORPORATION, A DELAWARE CORPORATION; UNITED ARTISTS PICTURES INC., A DELAWARE CORPORATION; SEVENTEEN LEASING CORPORATION, A DELAWARE CORPORATION; EIGHTEEN LEASING CORPORATION, A DELAWARE CORPORATION; MGM/UA COMMUNICATIONS CO.,, v. SONY CORPORATION, A JAPANESE CORPORATION; SONY PICTURES ENTERTAINMENT, INC., A DELAWARE CORPORATION; COLUMBIA PICTURES TELEVISION, INC., A DELAWARE CORPORATION; JOHN CALLEY, AN INDIVIDUAL, DEFENDANTS, AND KEVIN O'DONOVAN MCCLORY; SPECTRE ASSOCIATES, INC., AN ENTITY OF UNKNOWN CAPACITY,
• Court: U.S. Court of Appeals — Ninth Circuit

Page 942

263 F.3d 942 (9th Cir. 2001)

DANJAQ LLC, A DELAWARE LIMITED LIABILITY COMPANY; METRO-GOLDWYN-MAYER, INC., A DELAWARE CORPORATION; UNITED ARTISTS CORPORATION, A DELAWARE CORPORATION; UNITED ARTISTS PICTURES INC., A DELAWARE CORPORATION; SEVENTEEN LEASING CORPORATION, A DELAWARE CORPORATION; EIGHTEEN LEASING CORPORATION, A DELAWARE CORPORATION; MGM/UA COMMUNICATIONS CO., PLAINTIFFS-APPELLEES, v. SONY CORPORATION, A JAPANESE CORPORATION; SONY PICTURES ENTERTAINMENT, INC., A DELAWARE CORPORATION; COLUMBIA PICTURES TELEVISION, INC., A DELAWARE CORPORATION; JOHN CALLEY, AN INDIVIDUAL, DEFENDANTS, AND KEVIN O'DONOVAN MCCLORY; SPECTRE ASSOCIATES, INC., AN ENTITY OF UNKNOWN CAPACITY, DEFENDANTS-APPELLANTS.

No. 00-55781

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Argued and Submitted May 11, 2001

Filed August 27, 2001

[Copyrighted Material Omitted]

[Copyrighted Material Omitted]

[Copyrighted Material Omitted]

Kevin McClory, defendant-appellant, in propria persona.

Paul J. Cohen, Segal, Cohen & Landis, Beverly Hills, California, and Lucile Hotton Lynch, Carlsbad, California (argued), for defendant-appellant Spectre Associates, Inc.

Marc A. Becker, Munger, Tolles & Olson, Llp, Los Angeles, California, and Pierce O'Donnell, O'Donnell & Shaeffer, Llp, Los Angeles, California (argued), for the plaintiffs-appellees.

Appeal from the United States District Court for the Central District of California Edward Rafeedie, District Judge, Presiding. D.C. No. CV-97-08414-ER

Before: M. Margaret McKeown and Raymond C. Fisher, Circuit Judges, and David Warner Hagen,^* District Judge.

McKEOWN, Circuit Judge:

"Equity aids the vigilant."

--Anonymous

"We have all the time in the world." --Epitaph for Mrs. Bond in For Your Eyes Only (Danjaq Productions 1981)

Every so often, the law shakes off its cobwebs to produce a story far too improbable even for the silver screen--too fabulous even for the world of Agent 007. This is one of those occasions, for the case before us has it all. A hero, seeking to redeem his stolen fortune. The villainous organization that stands in his way. Mystery! International intrigue! And now, not least of all, the dusty corners of the ancient law of equity.

More specifically, this case arises out of an almost forty-year dispute over the parentage and ownership of a cultural phenomenon: Bond. James Bond.¹ We are confronted with two competing narratives, with little in common but their end-point. All agree that James Bond--the roguish British secret agent known for martinis (shaken, not stirred),² narrow escapes,³ and a fondness for fetching paramours with risque sobriquets⁴ --is one of the great commercial successes of the modern cinema. The parties dispute, however, the source from which Agent 007 sprang.

Appellees Danjaq LLC and a handful of other companies or partnerships that are in the business of making and/or distributing James Bond films (collectively, "Danjaq"), contend that James Bond is largely the creation of the author Ian Fleming and that--with one narrow exception--they own the rights to Bond, which were passed on to them over the years by Fleming and producers Harry Saltzman and Albert "Cubby" Broccoli. Appellants Kevin O'Donovan McClory and Spectre Associates, Inc. ("McClory") urge a different narrative. They contend that McClory transformed the supposedly violent and alcoholic James Bond of the Fleming books into the movie character who is so beloved, recognizable and marketable, and that they have a significant stake in the Bond movies, which stems from rights to Thunderball obtained long ago.

Compelling though the details of this dispute may be, they are largely subsidiary to the issues that confront us here. Instead, we are called upon to determine whether McClory waited too long to claim his piece of the pie--whatever that share might have been. We conclude that McClory's claims are barred in their entirety by the doctrine of laches and, on that basis, affirm the district court's dismissal of McClory's suit.

THE PLOT

The genesis of this dispute can be traced to the late 1950s, when efforts were made to bring the literary character James Bond to the screen. Ian Fleming had previously written seven books featuring James Bond⁵ but, according to McClory, had little success transforming these books into a screenplay. Thus, Fleming collaborated with McClory and a hired screen-writer, Jack Whittingham, in an effort to produce a movie script. Together they penned various letters, drafts, and other "script materials" that were the precursor to the film Thunderball. The three of them produced a Thunderball screenplay that, according to McClory, differed significantly from Fleming's books. (Although not defined with specificity, McClory generally refers to these works as the "McClory Scripts.") In particular, the screenplay deliberately modified the James Bond character created by Fleming. (Thus, claims McClory, this screenplay is the source of the "cinematic James Bond" character, as opposed to the literary James Bond character.) Morever, according to McClory, the script materials introduced SPECTRE,⁶ the villain Ernst Stavro Blofeld, and the theme of nuclear blackmail.

In 1961, unbeknownst to McClory, Fleming wrote his next book--Thunderball. It was published that same year, and credited Fleming as the sole author, with no mention of McClory or Whittingham. McClory and Whittingham brought suit in England, alleging that the book infringed upon the Thunderball screenplay.

At the same time, Danjaq was moving forward with plans to make James Bond movies. Still in 1961, it commissioned another writer, Richard Maibaum, to write a Thunderball screenplay. According to McClory, this screenplay is the origin of Danjaq's various infringing acts. He argues that Maibaum's screenplay was based on the earlier Thunderball scripts, as well as the infringing Thunderball book, and that it lifted from them the cinematic James Bond character, SPECTRE, and the theme of nuclear blackmail. This contention is disputed; Danjaq's president testified at his deposition that Maibaum did not have access to the McClory scripts, although he admitted that Maibaum likely had the book Thunderball, in which McClory had an interest.

In order to sidestep the legal disputes over Thunderball, Saltzman and Broccoli decided that they would instead make Dr. No as the first Bond movie. Maibaum was again hired as the screenwriter. And, according to McClory, Maibaum again incorporated elements from the earlier Thunderball scripts. Danjaq denies this allegation. The movie Dr. No was released in 1962. That same year, based on Fleming's transfer to Danjaq of the film and television rights to his novels and Bond stories, Danjaq teamed up with United Artists to produce Bond films.

At the same time, the litigation over the book Thunderball was continuing in Britain. In late 1963, Fleming ultimately admitted "[t]hat the novel reproduces a substantial part of the copyright material in the film scripts"; "[t]hat the novel makes use of a substantial number of the incidents and material in the film scripts"; and "[t]hat there is a general similarity of the story of the novel and the story as set out in the said film scripts." The suit settled within weeks, and Fleming assigned some set of his rights in Thunderball--the extent of which remains in dispute--to McClory.

The next significant event occurred in 1965, when McClory granted Danjaq a ten-year license to make a movie based on Thunderball. The movie Thunderball was released later that year.

In the mid-1970s, McClory began writing a new James Bond script, together with Sean Connery and the British spy novelist Len Deighton. This led to a flurry of litigation. Notably, in 1976, McClory and Connery sued Broccoli, United Artists and Danjaq, claiming that the forthcoming movie The Spy Who Loved Me infringed upon the script that they were then preparing (entitled James Bond of the Secret Service, or Warhead) and, among other remedies, seeking to enjoin the defendants from infringing upon McClory's rights in the novel Thunderball. Two months later, McClory and Connery abandoned their attempt to enjoin the release of The Spy Who Loved Me, which was then released in 1977.

Although that 1976 case is the end of the historical litigation relevant here, it was not the end of the dispute between the parties. Between 1978 and 1983, United Artists and the trustees of Fleming's estate sought to prevent McClory from releasing Never Say Never Again, a remake of Thunderball. And even after that litigation ended, the dispute raged on. In 1986, McClory cabled the chairman of MGM/UA, as well as the law firm of Latham & Watkins, to inform them that the Bond pictures infringed on his rights in Thunderball. In 1987, he filed a correction registration with the U.S. Copyright Office regarding the book Thunderball, listing himself and Whittingham as co-authors of the book. And in 1988, SPECTRE placed full-page and multi-page ads in Variety, stating that its rights to James Bond were being infringed by MGM/ UA and Danjaq. Despite this flurry of public accusations, McClory took no legal action.

Fast forward to 1997, and the events that spawned the present litigation. By that time, Danjaq had produced movie after movie, and James Bond had become a cinematic icon and a huge box office success. In October of 1997, Sony acquired McClory's rights--whatever they were--to make James Bond movies and announced its plans to begin doing so. In January 1998, Danjaq filed suit, alleging thirteen separate causes of action, against Sony, Columbia Pictures and McClory, among others. Sony and Columbia struck back with nine counter-claims of their own.

Later that same year, Judge Rafeedie enjoined Sony from making James Bond movies. Danjaq, LLC v. Sony Corp., 1998 WL 957053, (C.D.Cal. July 29, 1998). That injunction was affirmed by this court. See Danjaq, LLC v. Sony Corp.,165 F.3d 915, (9th Cir. Nov.19,...