Notes & Comment
Vol. 2007, No. 1
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Business and Copyright Law
Who's the Guardian of "Charlie's Angels"?
The hit 1970s television series "Charlie's Angels" was the brainchild of Robert Wagner and Natalie Wood (Wagner) and Spelling-Goldberg Productions (the Producers) as part of a joint development deal that gave Wagner a share of net profits. Years later Columbia Pictures (Columbia), which had since purchased the Producers' "Charlie's Angels" rights, separately bought the rights to and produced two "Charlie's Angels" movies. Wagner demanded a share in the movie profits because they were based upon the television series, and sued Columbia.
In Wagner v. Columbia Pictures Industries, Inc., Case No. B184523 (Second District, January 7, 2007), the California Court of Appeal affirmed summary judgment for the Producers, agreeing that the production contract Wagner signed with Producers for the television series didn't apply to subsequent "Charlie's Angels" films. Wagner is a textbook example of an intellectual property agreement, thoroughly negotiated but not clearly written, gone awry.
Background
Wagner and the Producers developed a television movie-of-the-week called "Love Song", in which Robert Wagner and Natalie Wood starred. That contract gave Wagner a share of "net profits" in the TV movie, which was defined as the net of "all monies received by Producer as consideration for the right to exhibit the Photoplay, and exploitation of all ancillary, music and subsidiary rights in connection therewith." This "net profits" definition resulted from substantial negotiations between the parties. They agreed the provision covered "all income from all sources" related to the "Love Song" TV movie.
The "Love Song" contract committed Wagner and the Producers to co-develop other ideas for the ABC network, and "Charlie's Angels" came from that. The resulting "Charlie's Angels" contract between Wagner and the Producers gave Wagner a share of net profits, and, leveraging their prior negotiations on the "Love Song" deal, defined net profits substantially the same way: the net of "all monies actually received by Producer as consideration for the right to exhibit photoplays of the [Charlie's Angels] series and from the exploitation of all ancillary, music and subsidiary rights in connection therewith."
The Producers next signed contracts with writers to develop the television series, but did not take full ownership of the copyright to the teleplay for the series pilot. The Producers contractually claimed ownership of the teleplay as a "Work for Hire" under the Copyright Act, but their contract with the writers was made subject to industry-wide Writer's Guild agreements, including "separated rights" provisions that, in this case, only gave the Producers ownership of the teleplay in the "Charlie's Angels" television series. The writers retained ownership for all other purposes, including theatrical motion picture rights. Thus, the Producers' contracts with the writers didn't secure for the Producers exclusive rights in the teleplay beyond television.
The Producers later sold their "Charlie's Angels" rights to Columbia. Separately, Columbia bought "Charlie's Angels" motion picture rights from the heirs of the television writers, and produced and released the films. Wagner sued Columbia claiming that Wagner was owed a share of the net profits for the motion pictures under the original television deal with the Producers.
Wagner's "Charlie's Angels" contract with the Producers defined net profits as the net of "all monies actually received by Producer as consideration for the right to exhibit photoplays of the [Charlie's Angels] series and from the exploitation of all ancillary, music and subsidiary rights in connection therewith." Wagner said the motion pictures were "subsidiary rights" to the television series and thus were covered. Columbia argued that the original contract's net profits provision only applied to net profits associated with the television series, not all things "Charlie's Angels".
The appellate court sided with Columbia. The original "Charlie's Angels" net profits wording was limited to net profits related to the television series, despite the parties' use of template wording hammered out in the "Love Song" deal that might have had a different intention there. The "Charlie's Angels" contract only covered the TV series photoplay and rights "subsidiary" or "ancillary" to that. The Producers didn't own movie rights under the writer contracts for the television series. Therefore, the Wagner-Producers agreement could only apply to television rights, and when Columbia purchased the Producers' "Charlie's Angels" property (including corresponding net profit obligations to Wagner), it didn't purchase movie rights. In fact, Columbia purchased those movie rights independently, from heirs of the television writers.
Summary and Conclusion
Wagner's legal position might have been fatally flawed from the outset because the original "net profits" contract language, despite extensive negotiation between attorneys in the prior deal, probably was the best Wagner could get in the original production contract. Perhaps industry custom and practice at the time, the wording, in hindsight, now looks confusing and ambiguous, and those factors cut against Wagner in the litigation.
The case is instructive how complex the ownership of intellectual property rights can be, particularly when one party (Wagner) is dependent on another party (the Producers) to both exploit and retain intellectual property rights in contract dealings with third parties (the television writers). Ownership of IP, like an onion, can be a bundle of layers and levels of interests, and each layer and level must be tearfully understood and properly addressed in development and license agreements.
In the end, the outcome in this case might have been different had Wagner included a provision in the Producers' contract expressing a joint intention more clearly (such as adopting the "all income from all sources" understanding from the "Love Song" agreement). The result also might have changed had Wagner contractually obligated the Producers, when they developed the television series, to retain all IP ownership in the teleplay for all purposes.
© Matthew Joseph 2007. Law Offices of Matthew Joseph, San Mateo, California, practices in the areas of intellectual property licensing, commercial real estate leasing, and corporate and business transactions. No legal advice is intended by the information provided herein and recipients should independently consult counsel before taking any action related to this subject matter.