How “pulp” are NFTs? The NFT landing in the movie industry: the “Pulp Fiction” case.

On November 16th, 2021, Los Angeles-based entertainment company Miramax has sued Quentin Tarantino before the US District Court for the Central District of California, for his planned sale of NFTs (Non-Fungible Tokens) related to the 1994 movie “Pulp Fiction” associated with high-resolution scans consisting of “a single iconic scene, including personalized audio commentary” along with “a hold of secrets from the screenplay and a glimpse into the mind and the creative process of Quentin Tarantino”.

As such, Miramax has set out claims for breach of contract, copyright and trademark infringement, as well as unfair competition, seeking monetary damages and injunctive relief, presumably in order to forbid the sale of the NFTs, as well as preventing potential future attempts by Tarantino to infringe its rights over the movie.

Miramax alleges that Tarantino had previously granted ”all rights (including all copyrights and trademarks) in and to the Film… …excluding only a limited set of Tarantino’s ‘Reserved Rights’”, some of those strictly relating to the publication of the movie.

As regards the copyright claim, Miramax asserts that “Except for Tarantino’s limited set of Reserved Rights… …Miramax owns copyrights in and to Pulp Fiction (and, pursuant to the Original Rights Agreement and the Tarantino-Miramax Assignment, ‘all elements thereof in all stages of development and production’)…” conclusively arguing that the “Pulp Fiction” NFTs shall be regarded as unauthorized derivative works in violation of Section 501 of the Copyright Act, 17 U.S.C. § 501.

Furthermore, Miramax objects to Tarantino using Pulp Fiction branding and imagery, arguing that such conduct would be likely “to deceive the relevant consuming public into believing, mistakenly, that the Pulp Fiction NFTs originate from, are associated or affiliated with, or are otherwise authorized by Miramax” in the face of the company’s “broad rights” to Pulp Fiction, including “various registered and unregistered trademark rights in the name ‘PULP FICTION,’” as well as “valid and subsisting United States copyrights registered with the U.S. Copyright Office”.

Miramax contends that the alleged infringement by Tarantino could “mislead others into believing they have the rights to pursue similar deals or offerings, when in fact Miramax holds the rights needed to develop, market, and sell NFTs relating to its deep film library”.

In the case at hand, Tarantino’s counsel has represented that his planned collection consists of “7 NFTs, each containing a high-resolution digital scan of Quentin’s original handwritten screenplay pages for a single scene from his screenplay for Pulp Fiction”. Provided they do not store any digital asset, but rather be associated to the digital files, it is unlikely that Tarantino’s NFTs will thus fall within the subject matter of copyright, as opposed to the content related thereto.

Since the derivative works at issue are the screenplay scans, not the NFTs, it may be argued that the case relates to a contract dispute where the focus is on whether the rights Quentin Tarantino reserved in his agreement with Miramax include relevant “screenplay publication” rights.

On this respect, it is noteworthy that the agreement with Miramax left untouched certain “Reserved Rights” including “print publication (including without limitation screenplay publication, ‘making of’ books, comic books and novelization, in audio and electronic formats as well, as applicable)”. It follows, that Quentin Tarantino may thus be entitled to sell digital scans of the screenplay extracts as NFTs, unless the above conduct can qualify as an act of merchandising, the latter being under the scope of the assignment to Miramax.

It is precisely for this reason that Miramax argues on this point that, under the US Copyright Act, the distribution of a small number of copies to a limited number of recipients is usually not considered “publication” – unless no restrictions are imposed on further distribution of the content. However, as can be seen from Tarantino’s auction website www.tarantinonfts.com the owner of the NFTs is even granted the freedom to “share the secrets publicly with the world“, which seems to be at odds with the objections raised by Miramax.

As previously touched upon, Miramax has also challenged Tarantino’s unauthorized use of imagery on his NFT- specifically, cartoon illustrations of the characters played by John Travolta and Samuel L. Jackson. On this respect, however, the famed director has already replaced the cartoon drawings with a headless figure wearing a suit recalling those worn by the characters in the movie.

Last, as regards Miramax’s trademark infringement claims, it should be taken into consideration that, despite the huge amount of trademark registrations for “Pulp Fiction” relating to several categories of merchandise, none of these registrations would mention NFTs.

NFTs, aka Non-Fungible Tokens which implement a unique identification process of a digital asset created online, are a widely used technology in recent years in the highly lucrative media industry which has proved as an alternative revenue stream for people eager to profit from media outside the traditional licensing schemes. The Miramax v. Tarantino case is one of the most prominent examples of NFT-focused litigation that coincides with the increased demand for their use within the movie industry since the beginning of this year.

The application of IP provisions originating well before the emergence of such technologies involves several challenges for legal practitioners who are called upon to adapt, as in the present case, outdated rules to an ever-changing technological world.

Hence, the Miramax v. Tarantino dispute shows that major players in the entertainment industry are beginning to seize the opportunity to capitalize over NFT’s verging wave, with a view to judicially enforcing outdated contractual provisions which may ultimately lead to the spanning of several grey areas over such new forms of exploitation of digital assets. Against this background, IP implications are surely going to be numerous and harder to sort out in the next future before both US and Italian specialized Jurisdictions.

m.baccarelli@macchi-gangemi.com
m.lonero@macchi-gangemi.com

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