Beatrice sues RKO for Kane

[atcolomb]

I guess we should be lucky that Criterion is able to release Mr. Arkadin . I will get mad at her if she holds up the release of The Magnificent Ambersons!!!

[Clive Dale]

It appears that there is a controlling court finding that the screenplay for Citizen Kane is in the public domain:

FROM:
WWW.QUINNEMANUEL.COM/NEWS/VICTORY_DETAIL.ASPX?RECID=6

VICTORY FOR “CITIZEN KANE”

When Orson Welles’ daughter Beatrice sought a declaration of her rights with respect to Citizen Kane, the film’s licensee, Turner Entertainment Co., turned to Quinn Emanuel. Ms. Welles argued that Orson Welles had retained the copyright under a 1939 Agreement between Orson Welles, Mercury Productions, and RKO Pictures (as modified in 1944). She claimed that the interest had since passed to her. Pointing to language in the agreement that gave RKO the right to exploit the movie theatrically and on television, Welles argued that, at a minimum, she must own the home video rights. In addition, Ms. Welles sought a declaration that she owned the rights to the screenplay.

Surprisingly, the complaint did not state any claim for copyright infringement. Quinn Emanuel quickly realized why. It is a jurisdictional prerequisite to bringing a copyright infringement action that one register a claim of copyright. Neither Orson Welles nor Mercury Productions, however, had ever registered a copyright in either the screenplay or the motion picture. Because the initial term of copyright registration provided under the 1909 Copyright Act had expired in 1968, the Copyright Office would not now issue a certificate of copyright ownership. Thus, Beatrice Welles could not bring a copyright claim unless she first persuaded a court to declare her a copyright holder.

The firm easily persuaded the court that principles of contract interpretation mandated the conclusion that RKO had always owned the copyright in the motion picture. The firm then persuaded the court that the language in the parties’ agreement granting RKO the right to exploit the motion picture through theatrical release and television broadcast was not a limitation on RKO’s right to exploit the motion picture. Rather, RKO had retained the right to exploit the motion picture in all media and the express grant of theatrical and television rights simply enabled RKO to exploit the motion picture in those media without infringing the screenplay.

Finally, Quinn Emanuel persuaded all defendants in the litigation to disclaim any copyright ownership of the screenplay. Once they had done so, Beatrice Welles was unable to point to any actual case or controversy, and, as a consequence, the court was unable to issue any declaration concerning the screenplay rights. Thus, Ms. Welles was precluded from bringing any copyright infringement action based on the exploitation of Citizen Kane in the home video market.

# # #


Here's the most recent word I could find from Ms. Welles:

COMMENTARY

By Beatrice Welles (Beatrice Welles lives near Las Vegas)

For the last 19 years, I have dedicated most of my life to protecting and preserving the work of my father, Orson Welles.
His work was the single most important thing in his life, and I loved him more than words could ever say. My other work is supporting and protecting animals. I spent my gypsy childhood traveling with my father around the world, rescuing animals along the way; he loved it and so did I. My father's film "Citizen Kane" is considered by many people
around the world to be the best film ever made. In 1942, it should have swept the Oscars. Instead, when either my father or "Citizen Kane" were mentioned as nominees, hisses and boos came from the academy members at the Shrine Auditorium ? many of them people who feared William Randolph Hearst. My father refused to attend the ceremony; he knew what would happen, and it hurt him deeply. He won only the best screenplay award that evening, and the academy members knew it was given only so that "Mank" ? Herman J. Mankiewicz, who co-wrote the film ?
would take home an Oscar. Imagine, this was the only Academy Award given for the best picture of all time.
My father was given his statuette, and he promptly lost it for many decades. In 1994, I was informed that the Oscar had resurfaced and was about to be sold privately through Sotheby's. I was astounded that the Oscar had shown up; I believed it stolen and lost for good. I put all my resources together and sued to stop the sale of the statuette. I regained it, and I wanted to put it in a permanent exhibit at an Orson Welles institute, along with his other awards, screenplays, poems and drawings that I have been fortunate enough to accumulate through the years. The institute was my dream, but it never came to pass. I never had the money or the time it takes to organize and run such an establishment. I now realize that it wouldn't have been a good tribute; my father detested institutions of any kind, which is one of
the reasons he never sent me to school and instead hired teachers to tutor me in the various countries in which we lived.
My father should be remembered for what he left: his extraordinary work, which changed the way movies were made.
With the immeasurable help and guidance of my advisor, Thomas A. White, and my attorney, Steven Ames Brown, I have been able to protect much of his work. I gave up my career and business for both my father and the animals, which I would do again if given the choice.
Three years ago, I found myself in a very bad financial situation and was forced to think about selling the "Kane" Oscar. I had used most of my personal funds for my animal welfare work, the primary function of which is education in humane animal control in addition to funding individuals and small organizations, many from Third World countries, that have no resources in the work they do for abused and abandoned animals.
Selling a family heirloom seemed far better than losing everything pertaining to my father's work and seemed necessary
to ensure that creditors were paid, although it was the very last thing I ever wanted to do. Even though my father loathed
everything that this Oscar represented, deciding to sell it was still one of the most difficult decisions of my life.
A few weeks before the auction was scheduled at Christie's, the academy's lawyers tried to stop the sale. I now understand the academy's dislike of Oscars being sold, but even it admits that a sale does the academy no harm. Simply, I had no alternative left when I made the decision. To lose what I had fought for ? for my father ? would have been appalling; to sell the one thing that had no value to him, but was of great value to others, perhaps was
not so bad after all. The academy's own appraisal in 2002 said the statuette's value was in the proximity of $1 million.
Despite knowing my predicament and despite knowing it had no right and no basis to stop the Oscar from being sold, the
academy obstructed me and forced me to sue to get a judicial decree stating the Oscar was my property. I won that lawsuit at a great emotional price.
I believe academy President Bruce Davis to be a good and responsible man who was very ill advised by his lawyers, who had their own agenda. For a nonprofit organization to spend copious amounts, as it has in this case, is irresponsible and unnecessary to the point of stupidity. Worst of all, its behavior as harmful and morally unacceptable. I was abused and publicly humiliated by the academy's legal firm in ways that no academy member would ever tolerate.
Now the academy is threatening to appeal unless it is allowed to dictate what I can do with my father's 1971 Lifetime
Achievement Award, his second Oscar.
My father would have thought this normal behavior from academy officials. Let me leave you in no doubt how he felt about them: He hated them. His love was for "films and their makers." His distrust for people who run media institutions is now even more understandable to me simply because of how I have been treated.
I will continue my work for my father and my work for the animals; my passion for both has not ceased and never will.

[Jeff Wilson]

Has anyone heard anything regarding the AMBERSONS side of this laswuit? I find the ongoing delays in getting the film on DVD curious, and I wonder if it has anything to do with this suit. It seems like it should have long since been settled one way or the other.

[Terry]

You ever been in court, Jeff? It takes YEARS for that process to decide anything. Even without lawyers deliberately delaying things...

Has it been 5 years yet?

[Jeff Wilson]

Given that one half of the affair was already dealt with, it seemed possible the other half might have been as well.

[Terry]

I'll plead the fifth on that! Ha ha. What half is complete? Is JIF coming out or something?

[Jeff Wilson]

No, part of the lawsuit stated that she owned part of KANE, and she was easily shot down. Read the post from Clive Dale, it has details of the decision.

[RayKelly]

UPDATE ON LAWSUIT


By Paul Elias
ASSOCIATED PRESS

4:41 p.m. May 30, 2007

SAN FRANCISCO – A federal appeals court breathed new life Wednesday into a lawsuit filed by Orson Welles' daughter against a Hollywood studio over profits from the video release of her father's masterpiece movie “Citizen Kane.”
Beatrice Welles, 51, sued Turner Entertainment Co. in 2003 alleging that a 1944 agreement discovered by an archivist promised the famous actor and screenwriter 20 percent of future royalties from sales of the movie. The studio argued that the agreement didn't include revenues from video and DVD rentals and sales, which weren't foreseen at the time.

A lower court had thrown out the case shortly after the two sides reached a confidential settlement, terms of which depended on the outcome of the 9th U.S. Circuit Court of Appeals ruling, according to Beatrice Welles' attorney Steven Ames Brown.
Brown said Wednesday's ruling that reinstated the lawsuit will benefit his client because she's entitled to an amount of money he declined to disclose.

“It's all over but the counting of the money,” Brown said.

David Quinto, a lawyer for Turner Entertainment, disagreed and said there were still several issues left to be resolved.

“It's disappointing in some respects,” Quinto said of the ruling. “But Mr. Brown is leaping to the conclusion that if there were a trial, Beatrice Welles would prevail. We disagree.”

“Citizen Kane” was released in 1941 and flopped at the box office. But it has generated hundreds of thousands of dollars in revenue since, through video and dvd sales.

Beatrice Welles, 51, is Orson Welles' child with his third wife, actress Paola Mori. He also has a daughter from his marriage to actress Rita Hayworth, and a son with his first wife, Virginia Nicholson.

Brown described his client as an “animal rescue worker” and said she lived somewhere in the southwestern United States.

[Christopher]

Here is a link to the ruling on Beatrice Welles's recent appeal. If I am interpreting the legal language correctly, it would seem there are still a number of issues to be resolved and Beatrice Welles has not yet won her case. If there are any lawyers on the board, I'll be interested to know what they think of the ruling and the judge's opinion.

http://www.ca9.uscourts.gov/ca9/newopin ... penelement

[NoFake]

"Beatrice Welles, 51, is Orson Welles' child with his third wife, actress Paola Mori. He also has a daughter from his marriage to actress Rita Hayworth, and a son with his first wife, Virginia Nicholson."

I'm sure Christopher is used to this from those who are unfamiliar with her father's life, but you'd think someone writing an article would know better.

[ToddBaesen]

Many thats to Christopher for posting the link to the Ninth Circuit Court of Appeals ruling. While I'm no Lawyer, I'd say, based on the 1944 exit agreement, Beatice actually has a valid claim for 20% of the profits of CITIZEN KANE. This comes after I felt she had no rights to CITIZEN KANE or it's profits at all, at the time of her initial lawsuit. But I had no idea about this 1944 exit agreement. It justs goes to show you how little we know, and how often we can be wrong without all the facts. Sort of like how we invaded Iraq. But it now seems clear to me that the whole exit agreement signed by RKO and Welles that is detailed in the Courts opinion, does indeed give Beatrice rights to 20% of the video and DVD profits of KANE.

What is so fascinating about this whole procedure in that the many documents germaine to this case are not something that any interested Welles observers or biographers apparently had any previous knowledge of. I don't know of one Welles biography that mentions the facts of this 1944 exit agreement, or the fact that Welles was supposed to get only $30,000. for CITIZEN KANE. And it seems to me that any court documents would certainly be closer to the "truth" than any of the supposed facts reported in numerous Welles biographies, whether they be by David Thomson or Simon Callow, Charles Higham or Barbara Leaming.

Of course, this whole lawsuit brings out some very interesting points. In initially reading it, I thought they had forgotten completely about THE MAGNIFICENT AMBERSONS. Except in the RKO contract, it is clearly stated that Welles had to STAR in the pictures. This meant that AMBERSON'S clealy fell outside of the amended agreements, since Welles did not appear in that film. Therefore, it would appear that IT'S ALL TRUE became the second RKO feature that Welles would have starred in (mostly as narrator, but he still would have been on camera). Except what about JOURNEY INTO FEAR? Welles appeared in this movie, but it was not finished befored he went to Brazil. But it was finished and released by the time of the amended RKO agreement, and he certainly was in the movie.


Here is a brief summary of the court documents:

The second agreement entered into on July 22, 1939, between Orson Welles and RKO (the “Actor Agreement”), provided that Orson Welles would play the leading male role in the two motion pictures produced pursuant to the Production Agreement and that Orson Welles would receive compensation of $30,000 plus a percentage of the net profits of the two motion pictures.

On December 26, 1939, Orson Welles and RKO amended the Actor Agreement by providing that Orson Welles would act in a third film in addition to the two pictures already agreed upon. On January 14, 1941, Mercury and RKO entered into another supplemental agreement, providing that the first motion picture Orson Welles and Mercury would make for RKO would be “based upon an original story, tentatively entitled CITIZEN KANE’ ”

RKO released CITIZEN KANE on May 1, 1941. By December 15, 1944, CITIZEN KANE’ had not turned a profit, the second film produced under the Production Agreement, entitled IT’S ALL TRUE, was not finished, and production had not commenced on the third film described in the supplemental agreement. To end their business relationship, Mercury, Orson Welles, and RKO entered into an agreement that terminated the Production and Actor Agreements and their amendments (the “Exit Agreement”). Signed on December 15, 1944, the Exit Agreement first outlined the prior agreements between the parties. It then stated:


All fixed compensation payable to Mercury or Welles for services in connection with the first two motion pictures has been paid in full. Welles under the agreements of the parties is entitled, as contingent compensation, to twenty per cent (20%) of the net profits of the first two pictures as a unit. No net profits resulted from the sale and distribution of the first picture produced under the title CITIZEN KANE, and accordingly Welles is entitled to no contingent compensation. It is now the mutual desire of the parties to terminate and cancel each and all of the existing agreements between RKO and Mercury and between RKO and Welles, and to mutually release and discharge each party to each of said agreements from all rights, duties, liabilities and obligations there under and from all claims, demands and causes of action of every kind and nature of each party as against the other party.

This exit Agreement also gave Orson Welles the option to purchase from RKO for $200,000 all of the film recorded for IT'S ALL TRUE.

Welles excercised this right in January, 1945 signing a promissory note for $200,000 to RKO and taking possession of the undeveloped footage for IT’S ALL TRUE. Howwever, due to a lack of funds, Welles was unable to do anything with the IT'S ALL TRUE footage, other than have it stored in a vault in Salt Lake City. He subsequently had to return the footage to RKO, when he could not pay the $200,000. to RKO.

[Glenn Anders]

Startling stuff, Todd!

Many kudos to you and Christopher.

The question you raise in my mind is this one:

How would JOURNEY INTO FEAR, begun simutaneously with THE MAGNIFICENT AMBERSONS, not figure as the second film in "the golden contract"? Welles certainly appeared in this film, he and Joseph Cotten wrote the script, and I'm sure evidence is about that he directed parts of the film. It seems to me that good lawyers might make much of this factor.

Let's hope there are some lawyer types willing to go to the welles once more [sic], in answer to Christopher's request.

Glenn

[The Night Man]

I'm no lawyer, but the summary you've provided, Todd, seems to me to say that the 20% profit participation refers to whatever profits had accrued prior to the exit agreement. And since there were no profits prior to the exit agreement, Welles was entitled to 20% of nothing.

Then the exit agreement appears to cancel everything. According to your summary it states:

It is now the mutual desire of the parties to terminate and cancel each and all of the existing agreements between RKO and Mercury and between RKO and Welles, and to mutually release and discharge each party to each of said agreements from all rights, duties, liabilities and obligations there under and from all claims, demands and causes of action of every kind and nature of each party as against the other party.

It seems to me that, if anything, this agreement forecloses any financial claim by Beatrice on any of Welles' RKO work. Of course, lawyers have a way of seeing to it that nothing is ever really settled...

[Roger Ryan]

I did find it strange that the ruling appears to ignore "Ambersons" and "Journey..." when discussing Welles' RKO contracts, but the second footnote makes clear that Beatrice originally claimed ownership of "Kane", "Ambersons" and "Journey...", but that an agreement with Turner had been reached concerning the latter two films. I'm sure that was a factor in holding up Region 1 DVD releases of "Ambersons" and "Journey..." and I hope this revitalized legal action doesn't jeopardize the planned 2008 releases of those films.

[Michael O'Hara]

If I don't get Ambersons on DVD next year I'm going to be one unhappy little camper. Sick of greed and ignorance getting between Orson's art and the people who care about it most....us, his fan base.