The Axanar "contract" does say that the studios may refuse to let the project move forward at any time, and this is a risk donors must accept. So wouldn't this exact thing happening undo the "contract" enforceability?
CBS/Paramount sues to stop Axanar
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The Axanar "contract" does say that the studios may refuse to let the project move forward at any time, and this is a risk donors must accept. So wouldn't this exact thing happening undo the "contract" enforceability?
Consider this on the Kickstarter terms I have referred Carlos to.
The FTC has already sued once on this, and if they don't then the potential for individual claims still exist so a class action is theoretically a possibility.
Of course, they still get their cut, right?
I have not seen that. Do you have a link? Worth remembering that it is a condition of using Kickstarter that you have IP permission.
There's also liability under the Federal Trade Commission Act. Last year the agency successfully obtained a consent order against an Oregon man who raised $122,000 for a board game that he never actually produced. I encourage everyone to read the FTC's complaint in that case and note the parallels to AP. I'm mention a few here:
1. The defendant falsely "held himself out as abiding by Kickstarter's terms of service."
2. The defendant cited IP infringement issues as an excuse for delaying, and ultimately failing to deliver the promised board game.
3. The defendant provided misleading updates to donors that "indicated that, though delayed, the board game was in production and would be released eventually."
4. "In reality," the FTC said, the defendant "used the consumers' funds for miscellaneous personal equipment, rent for a personal residence, and licenses for a separate project."
5. While another company "stepped in and published the game," the donors never received "other, highly-prized deliverables," i.e. perks.
6. And the kicker: "More recently, Defendant promised consumers that he would provide an accounting of his expenses, but he has not done so."
I am referencing the "Risks" section of the Kickstarter and Indiegogo project presentations, readily available through archive.org (search this thread to find a link if you like). This is the only statement by the project of their offering that I know of, so I mapped it onto your concept of a contract document.
What I have argued about the crowdsourcing lawsuit potential is it is the ability to show fraud that probably would make the case a clear one and draw regulatory attention. It may be too late for Axanar to escape this, but if they want any chance at all, they better take it right now.
This KS document says that a project can be sued if they fail and then refuse to make best efforts to return remaining funds.
As can be seen in the terms, KS identifies a requirement that the project be able to demonstrate that they have made every best effort with the funds. This is where I think Axanar becomes toast if there is malfeasance with the money shown. If Alec goes to that deposition IMO there will be no way he can create any ambiguity anymore on this matter, the facts whatever they are *without his spin* will be out there for better or worse.
Like I said tho it could be too late. A government agency could go after the emails, too.
Game of Thrones Walk of Shame.
Well, the way I see it is this:-
1) Kickstarter terms require a project provider to have IP permission;
2) Donor and provider enter into a contract whereby funds are produced in return for the finished product;
3) That direct contract is entered into on the basis that by using Kickstarter the project provider has obtained the necessary permissions. So a donor has a legitimate expectation that such a thing would not impact delivery of the project.
Now, I suppose it could be argued that Peters had stated that he didn't have permission, but then if he didn't he should not have been using Kickstarter, and it's important to remember that no every Kickstarter donor would have followed all of his online comments and literature, but would have been required to acknowledge the Kickstarter terms of service when using the site.
If there is a direct contract between Peters and the donors then fraud doesn't have to be established. Only breach based on failure to deliver.
There is definitely ambiguity about what is proper consumer protection here which I suspect just begs for regulatory attention, at least in the eyes of regulators.
Well, like I say, the donors really don't need to go that far, as if Peters loses then he fails to deliver, therefore he breaches his contract with the donors. That's an actionable claim in of itself.
Sure looks like a roadmap leading to Axanar.
Yeah. I said this a few pages back. It probably needs an authoritative court decision, from which regulatory steps can be taken.
Ya never know, maybe this is the one!
Cut a long story short, I think the best chance that Peters has is his fair use defence. I think if he doesn't succeed on that then he'll be wiped out, even if he can mitigate the damages.
In my experience--and I spent a long time covering the FTC--the regulators tend to make their own authority. Most FTC "law" comes from consent orders (i.e. settlements). And while a handful of FTC defendants mount a court defense, AP is in no position to fight a two-front war.
The "having IP permission" part is where Axanar of course argued that others are being allowed to make fan films with crowdsourced money, so there is tacit IP permission.
Whether Axanar parties personally gained from it by diverting/leveraging crowdsourced funds might also be a bit ambiguous, since people go to KS to get their startups funded.
Its the misrepresentation I think is the leverage for crowdsourcing lawsuits. Putting it over as mainly a fan film and incidentally building a space to do it and future films in, rather than a studio startup that will graciously make you a film incidentally once you've bought them an entire industrial facility. Shifting the ownership around. Spending money on something other than the project.
It likely wouldn't be two front war, since it would be much easier to litigate for non-delivery after he loses this trial.
I agree though that he probably isn't in a position to fight it since he needs pro bono help now.
I'm just wondering on a practical level that if they did sue him whether or not there would be enough value in his assets to realise the cash? It may be that there would be a personal and corporate bankruptcy, which would be unfortunately for the donors.
Indeed. I think that might prove the basis of an argument to reduce damages, but I don't think it would fly for a breach of contract claim, for the reasons I said.
I mean, look, let's be honest here, donors who handed over cash while knowing there is an issue are pretty damn stupid. But nonetheless, Peters should not have been using a service that requires him to have IP permission. So, in my opinion, by using Kickstarter he was effectively misrepresenting his position...and for that I don't think you can rely on implied permission. Either you have consent or you don't.
Yes, but those projects again would be individual contracts between the start up and the donor, so what is being promised is slightly different. Obviously with a start up you have business costs and expenses. This wasn't a start up. It was a movie project. Therefore the donors would expect that their money go towards the production of the film. Peters using funds to pay off, for instance, his personal utility bills isn't part of that.
I'd say failure to deliver is as well, but in this case misrepresentation is also there.
Yep.
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