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Tom Cruise waited more than thirty years after the release of his 1986 classic “Top Gun” before agreeing to shoot a sequel. Now, Paramount is in a dogfight over its copyrights following the release of "Top Gun: Maverick."
“Top Gun: Maverick,” Paramount Picture’s sequel to their 1986 hit film “Top Gun,” released to blockbuster success in theaters and critical acclaim. The family of Ehud Yonay - the author whose 1983 California magazine story inspired Tom Cruise and ultimately “Top Gun” - recently filed a copyright infringement lawsuit in California federal District Court. The suit alleges that “Top Gun: Maverick” is a derivative of the magazine story and Paramount Pictures violated copyrights by making and distributing the film without licensing the copyright for the story.
Background
The 1986 film classic “Top Gun” was inspired by a story called “Top Guns” published in California magazine.
In May 1983 California magazine published Ehud Yonay’s piece called “Top Guns” about two friends and their training at the US Navy's Fighter Weapons School. The story caught the attention of Paramount Pictures, licensed the copyright to adapt the story for film.
Paramount released “Top Gun” in 1986. Ehud Yonay got an acknowledgement in the film’s credits for his article. The movie became an American cult classic and has grossed over $400 million.
The long-awaited sequel “Top Gun: Maverick” began filming in 2018. The same year Ehud Yonay’s estate (the “Yonay estate”) sent a statutory notice of termination to Paramount advising that its copyrights to adapt the story for film would terminate January 24, 2020. By way of explanation, under the Copyright Act, an author, or the author’s estate, may use a statutory notice of termination to terminate a license of copyright. The statutory notice of termination must specify, among other things, the effective date of termination – in this case January 2020.
Allegedly, Paramount did not try to re-negotiate a license with the Yonay estate for "Top Guns" before shooting “Top Gun: Maverick.” Thus, Paramount’s license - and copyrights in the "Top Gun" story - was set to terminate in January 2020.
In May 2022, the Yonay estate sent Paramount a cease-and-desist letter to kill its “Top Gun: Maverick” project. The Complaint filed by the Yonay estate alleges that Paramount ignored the notice of termination and countered 1) “Top Gun: Maverick” is not a derivative work of Ehud Yonay’s “Top Guns” story; and 2) even if "Top Gun: Maverick" is a derivative work, it was "sufficiently completed before the effective termination date and thus came under the "prior derivative works" exception.
The Case
On June 6, 2022, the Yonay estate sued Paramount Pictures for damages under the Copyright Act.
The genesis of this case, at least in part, is Section 203 of the Copyright Act which allows authors and their heirs to terminate grants of copyright licenses under certain conditions. Here’s how Section 103 works:
- Author, her heirs, or the copyright holder – collectively the “licensor” - grants a license to copyright licensee.
- Licensor provides notice of termination, in most cases, no earlier than 25 years and no later than 35 years after the license is granted. 17 U.S.C. §203(a). To be effective, the notice has to state the date of termination of the license and be executed by the licensor.
- Licensor must record service of the notice of termination with the Copyright Office.
- On the date of termination, the license is terminated and rights revert to the licensor.
The Yonay estate alleges that it met the requirements of Section 203(a) and properly terminated Paramount’s license as of January 24, 2020.
In its pending suit against Paramount Pictures the Yonay estate alleges: 1) "Top Gun: Maverick" is derived from Yonay's story; and 2) Paramount willfully infringed the Yonay's copyright by distributing the sequel without copyrights or permission. The Yonay estate is seeking money damages and also an injunction to restrain Paramount from further distribution of "Top Gun: Maverick."
Conclusion
This case underscores the importance of both protecting your ideas and understanding your rights in intellectual property assets, namely copyrights.
Protect your ideas. Copyright registration is a relatively inexpensive tool to protect certain intellectual property assets. This asset that was relatively inexpensive to acquire may pay major dividends for the Yonay estate.
Understand your rights. Track licenses and explore renegotiation when Section 203 dates are approaching. In theory, the 35-year timer resets if the parties renegotiate a new license. Consider during negotiation that if the author miscalculates the value and longevity of the licensed asset that she can legally terminate the license starting in year 35 and for 5 years after. The term of a copyright generally is for the life of the author plus 70 years.
Of course, this may just be the cost of success – “Top Gun: Maverick” has grossed more than $400 million domestically in under three weeks. It’s a good thing for Paramount – one survey estimates that the median cost for a trademark infringement action start to finish is around $350,000.
No matter what your business, avoiding foreseeable legal problems is the best intellectual property portfolio management strategy.
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