For many of us, This is Spinal Tap remains the benchmark (if not the first great example) of the so-called “Mockumentary” genre of film. Since its first release in 1984 (it had a subsequent theatrical release thereafter) to critical acclaim and commercial success, it has become one of those films that its fans watch over and over—each time gleaning some new subtlety missed during the first dozen viewings. The film, about a fictitious British rock band named Spinal Tap, starred Michael McKean, Harry Shearer and Christopher Guest, who would later become the “King” of Mockumentaries with his films Waiting for Guffman, Best in Show and A Mighty Wind. It was co-written by Messrs. McKean, Shearer and Guest, along with the film’s Director, Rob Reiner. Not only did the film contain inspired comedic bits, it included an album’s-worth of original songs, co-written by McKean, Shearer and Guest.
Filmed on a shoestring budget of approximately $2.25 million, it is considered an “important film” by those who decide such things including the National Film Registry of the Library of Congress and The New York Times, as a culturally, historically and aesthetically significant film. As for me, I just think it is funny as hell.
Not only has the film had two theatrical releases, but it was also released in a wide variety of home video formats and editions and has spawned merchandise sales. In fact, the photo that accompanies this blawg post is a Tap action figure from my own personal collection of the three figure set.
The four co-creators, individually or through personal loan-out corporations, formed an entity called Spinal Tap Productions (“STP”). In 1982, STP signed an agreement with Embassy Pictures for producing, financing and distributing the film. In return, STP was to receive fixed, deferred and contingent compensation for their services, as well as a 40% profit participation based on all sources of revenue from the film, including merchandise and music. Through a series of sales of rights, the current owner of the rights to the film, and the party now responsible for making payments to STP, is the large Italian media conglomerate, Vivendi.
Last week, Shearer filed a lawsuit against Vivendi and one of its operatives, Ron Halpern, alleging that they have engaged in fraud and have committed breach of contract. The suit also alleges that Vivendi did not properly protect the trademark “SPINAL TAP” (even allowing a beer company to trademark the name for use in connection with beer without any opposition from Vivendi). Apparently, Shearer’s patience did not “go to 11,” and he has had enough. While Tap has been a huge hit and has spawned all sorts of merchandise since its original release, Vivendi claims that it has not made money. According to Vivendi, the four creators’ share of total worldwide merchandising income between 1984 and 2006 was roughly $81. Between 1989 and 2006 total income from music sales was $98 (ninety-eight) dollars. Over the past two years, Vivendi has failed to provide accounting statements at all. Shearer’s response was to file the lawsuit, seeking $125,000,000 in compensatory and punitive damages.
Shearer’s suit alleges that Vivendi’s accounting practices have been used to offset revenues from the film with losses from other films with which it has been “bundled” (among other nefarious practices). For example, if a distributor were to approach Vivendi about purchasing $1,000,000 worth of Tap home video units, Vivendi could bundle 19 other films (all of which are money losers) with it and offer the entire twenty film package for $1,000,001. That way, it can continue to claim that it has not generated $1,000,000 of revenue for Tap, but rather 1/20 of that. Other losses could be allocated to it and—voila—there are no profits to show. The suit also alleges that merchandising and music sales profits similarly have been cross-collateralized against other losses. The net result–$81 in merchandise and $98 in music sales.
Shearer’s Complaint in the lawsuit also states that Shearer is “concurrently filing notices of copyright termination for publishing and recording rights in Spinal Tap songs he co-wrote and co-recorded, as well as the film itself.” Under Section 203 of the U.S. Copyright Act, the exclusive or nonexclusive grant of an assignment or license of all or any portion of a right under copyright may be terminated at any time during the period of five years beginning at the end of the thirty-fifth year from the date of the execution of such assignment or license. Assuming the agreements in question were executed in 1982, that five year period would begin in 2017. However, it should be noted that this “termination right” does NOT apply in the case of “works made for hire.” Under the Copyright Act, a “work made for hire” consists of 1) works created by employees within the scope of their employment; or 2) works created by non-employees that are specially ordered or commissioned for use as a contribution to certain kinds of works (these include motion pictures), but only if there is a written agreement to that effect. In this case, since the original contracts with Embassy Pictures have not been made available, I am not sure if the rights were merely licensed to Embassy Pictures or, instead were treated in the agreement as “works made for hire.” This point will be critical to Shearer’s stated goal of getting his copyrights back.
I will post a follow up to this blawg post as the case progresses.