Editorials

The Future of Horror Hinges on the ‘Friday the 13th’ Lawsuit

January 29th, 2021 | By Lindsay Traves

Friday the 13th

This post on the Friday the 13th lawsuit was updated on October 2, 2021, to reflect the current status of the Horror Inc. v Miller case. It also now includes information on the 2021 Cunningham v Paramount lawsuit.

Before Pamela Voorhees and a version of Jason that might have been an apparition graced our silver screens, writers and studios exchanged words, contracts, and agreements to create the massive hockey mask franchise we know and love. It was here that Victor Miller either penned Friday the 13th and sold it to a studio or worked on the project as their employee. This all-important fact remains unclear as the ongoing legal battle for Friday the 13th ownership trudges on.

Behind every cry for an update to Friday the 13th: The Game – from Stephen King’s hellish book idea to every scream for another Voorhees reboot – is a complicated legal battle for Voorhees ownership that could go all the way to the Supreme Court. With other franchise shakeups, like the recent filing to reclaim Hellraiser, horror fans have lots of questions as to the fate of their beloved long-running franchises, ones this article will endeavor to answer.

What’s the Story with Friday the 13th Ownership?

Sometime before the 1980 release, Paramount Pictures got their hands on the rights to Friday the 13th, releasing horror movies in rapid succession (like its cohorts in the slasher boom of the time) until eventually selling the property to New Line Cinema. The rights are now in the hands of the original film producer and director, Horror Inc. / Sean S. Cunningham. Victor Miller, the writer of the original screenplay, has evoked a 1976 slice of copyright law to get the rights to his script back.

According to US Copyright law, 35 years after the copyright is sold, one has the option to terminate the sale and have the copyright revert back to them. The United States Copyright Act of 1976 (“Copyright Act”) Section 17 U.S.C. 203 provides that:

Termination of the grant may be effected at any time during a period of five years beginning at the end of thirty-five years from the date of execution of the grant; or, if the grant covers the right of publication of the work, the period begins at the end of thirty-five years from the date of publication of the work under the grant or at the end of forty years from the date of execution of the grant, whichever term ends earlier. 

SECTION 17 U.S.C. 203

More simply, an author who sells the copyright to their work can formally request a reversion of those rights (to get their copyright back) after 35 years have lapsed. This rule was added in 1976 by Congress with the intention to protect creators from unequal bargaining power. They wanted to add the termination clause due to “the unequal bargaining position of authors, resulting in part from the impossibility of determining work’s value until value has been exploited.”

In 2016, Miller, per the requirements in the law, sent notice of termination of the copyright for Friday the 13th. Unable to reach an agreement, director Sean Cunningham filed a lawsuit to deem the termination invalid. 

What Argument is Cunningham Making to Keep Friday the 13th?

Cunningham submitted to the court that Miller was, in fact, an employee at the time of the writing of the script, and therefore, never owned the copyright in the first place. Therefore, he cannot ask for it back. Herein lies the key issue in the case: was Miller an employee when he wrote the script, or an independent contractor who completed the work for hire? The former would mean he never owned the copyright and has no claim to it now; the latter would mean that he initially owned, then sold, the copyright, allowing him to trigger the reversion clause.

There’s some confusion about what it means to have been an employee at the time of the creation of the work. To decide if someone was an “employee,” the courts analyze whether work completed was “work for hire,” meaning, while it was maybe completed by an independent contractor, it was directly commissioned in a way that created an “employee” like relationship.

The “employee” qualification can be applied differently for different reasons, which is what happened in the Appeals decision. The courts distinguished between the use of the WGA membership (which Cunningham argued to justify the “employee” relationship to block the termination) to allow Miller to be considered an “employee” for the sake of employment law, but not allow it to have bearing on copyright law.

What’s the Status of the Friday the 13th Litigation So Far?

At the trial level – where the facts of the case are heard in full – it was decided that Miller did own the initial copyright, was not an employee, and therefore has a claim to the copyright now. He was granted ownership of Friday the 13th. The court made a summary judgment that the facts were not in dispute, then applied the law, deciding in favor of Miller. 

Horror Inc. / Cunningham appealed.  

In an appeal, you are not able to retry the facts. You are only able to argue that the initial trial judge made an error of law, and present your position that, but for the error, the case would be decided differently. Thus, the appeal court is only deciding on the application of the law to the facts, as the trial judge concluded the facts are not in dispute. 

Sean Cunningham and Horror Inc.’s appeal was based on their position that the trial judge erred in not considering WGA membership – the Writer’s Guild of America, the union screenwriters can belong to – when considering the “Reid Factors,” the factors that decide if Miller was an employee or contractor in the case linked above.

This was heard before the Second Circuit Court of Appeals on February 13th, 2020 and the decision was released on September 30th, 2021. The audio of the trial suggested that the courts were not buying Cunningham’s argument and are leaning towards deciding in favour of Miller. (Though anyone who’s litigated in their life knows this is never a reliable factor, judges are truly difficult to read). 

The riveting audio is available here – thanks, Larry Zerner – and you can get a really exciting peek into the world of appellate litigation, otherwise known as the terrifying exercise of meticulously preparing perfect oral arguments but then getting interrupted by the judges until you run out of time. 

In their decision, the court reaffirmed the trial decision and decided in favor of Miller, allowing the termination and granting him rights to the original script. There is still the ability to appeal to the Supreme Court, though scholars don’t think it will be certified and heard. Presumably, the studio will push for a Supreme Court hearing, or will otherwise work to negotiate some sort of rights split.

There was a long delay in getting this decision and there are a few possibilities as to why. Unfortunately, one of the three judges, Ralph K. Winter, passed away the end of 2020. Since the decision requires a majority vote, it’s possible that it was split and Judge Winter’s vote was in the majority. That would mean the votes are now 1-1 and the case will go undecided and need to be reheard or sent to another court.

It’s also possible the delay is because Judge Winter was the judge writing the decision (one judge usually writes the long decision and the others “concur” or “dissent.”). As our friend, Larry Zerner, pointed out, if this is the case, another judge with a hefty workload might need to start drafting a decision in Judge Winter’s stead, which is a substantial undertaking.

The other possibility is that the COVID delays have just kicked this out of priority. Court systems worldwide have had delays as a result of lockdown logistics and it’s increasingly difficult to predict timelines. We’ll just have to wait to see what’s next.

What About the Friday the 13th Video Games?

Friday the 13th: The Game has left a lot of people wondering how the game was able to launch but downloadable add-ons were halted. The simple answer is timing. The game was created and launched in May of 2017 while the rights were still securely in hands. As the battle trudges on, no more Friday the 13th media can be made. So, they can continue to exist, but not be updated.

A key element in the game that separates it from Mortal Kombat is the ownership of Jason Voorhees, the hockey mask clad slasher. Jason appeared in a 2015 DLC of Mortal Kombat X (before the notice of termination) and has not yet appeared in Mortal Kombat 11, raising lots of questions as to whether the legal battle would kill the possibility. 

At this point, while the parties have yet to decide on how to split the rights, it would be risky to create any Friday the 13th franchise media that could lean on any lore from the first film.

So Who Owns Jason Voorhees?

This one’s a doozy. Those who know (sorry, Casey Becker, but you don’t know) understand that Jason Voorhees, the undead giant, didn’t exist until Part II, and the hockey mask wearing zombie adjacent penultimate version of the slasher didn’t come to be until Part III. The trial judge opted not to decide on the ownership of the character of Jason Voorhees (nor was this issue contemplated in the Appeal decision). To consider it, you have to drill down what’s in question here: the ownership of the original Friday the 13th script, not the sequels. 

So what’s in the original script? Well, a lot. Camp Crystal Lake, Pamela Voorhees and her perhaps deceased son, and a zombie kid in the water that may or may not have been a dream. Speaking of dreams, this means all your fan theories about Friday the 13th canon and whether that is, in fact, Jason in the water at the end of Part I actually matter now, LEGALLY.

As it stands, the courts have not decided on Jason Voorhees as we know him, so an isolated and alienated Voorhees could exist with no backstory on his own, like he might in a Mortal Kombat game. The assumption is that now that the issue of the Part I script is decided (subject to any appeals to the Supreme Court), Miller and Cunningham will drill down into the franchise rights on their own and find a fair split. Though, since these two litigious fellas seem to be pushing towards the Supreme Court after four years of not reaching a settlement, it’s possible they’ll drag that piece of the puzzle on. 

Though dragging it on could mean more time without a Jason movie, it’s a pretty nuanced issue that would be interesting to have decided by the courts. As it stands, it is unclear who would own an extended franchise based on an original sold work after this termination clause is invoked.

Will We Get Another Another Jason Movie?

Don’t hold your breath. The quickest route to a new Jason movie is if Cunningham and Miller accept the court’s decision and decide not to continue through the courts. As this will be a precedent-setting case, it’s safe to assume other studios and copyright owners have interest in the outcome, and will want this to be decided by the Supreme Court. There is no guarantee they’ll hear the case, but it’s safe to assume Cunningham will try. It’s also possible that studios and the WGA will file amicus briefs in order to pile on arguments should this be heard by a higher court.

Then the next step to a quick Jason flick is the two deciding on the ownership of Jason Voorhees. As Larry Zerner broke down in the above Twitter thread, the elements of the franchise are numerous and overlapping. Since they haven’t reached an agreement yet, we can assume there will be a messy debate moving forward. There is also the new Cunningham v Paramount case, discussed below, which is another barrier between us and a new Jason movie. This will likely come down to risk and leverage.

What Risks Are Associated With Another Jason Movie?

With the court’s decision, Miller has won the rights to Part I only, and Jason remains a confusing entity. Presumably, Cunningham will grip every remaining facet of the franchise he still holds onto. Should this remain tied up, that means no more movies, and that means Miller and Cunningham might both have cases for diminishing values.

This issue hasn’t been brought up in the case just yet, but the value of a franchise changes over time; while things are tied up in courts, a franchise owner could be losing possible value. Since the Halloween movies are making a comeback, and other slasher franchises like Scream and Hellraiser (more on that later) are making comebacks, there’s an argument to be made that Jason is more valuable now than he will be in a few years, or even that his value has already started to diminish since the beginning of this litigation. 

This was explored recently in the case of a documentary being made about The Room. Tommy Wiseau sued the filmmakers of said documentary, tying the documentary up in court, killing their 2017 release date. This was a Canadian case and not exactly applicable here, but the takeaway is that the filmmakers intended to release their documentary at the same time as James Franco’s The Room drama, The Disaster Artist. At the time of that film’s release, interest in The Room was at its highest, and since Wiseau’s case delayed the release of the documentary, the filmmakers had a case against Wiseau for what they lost. 

The US and Canada do differ a bit here, but the argument for diminishing value can apply. These are usually only triggered in bad faith circumstances, so it would be a difficult one to argue, though it is more and more relevant as Halloween sequels cash in at the box office. 

The other risk comes to either party proceeding with Friday the 13th media using the elements they each own. As it stands, it would be risky to proceed with any media as the battle for Jason rages on, and should Jason remain with Cunningham, he’d have to produce only media that doesn’t reference any lore from Part I.

My presumption is this will all come down to a split or licensing fees. I don’t assume that Miller has any intention to spark a separate franchise arising from the results of his original script alone and probably wants to own his piece to license it out to Cunningham, who will retain ownership of the rest of the franchise (for now). But Cunningham also knows that his success or failure could result in precedent-setting cases that will shake up the ownership of lots of copyright, so there’s more skin in the game than just what Pamela Voorhees has peeled off.

What Does The New Cunningham and Paramount/Warner Bros. Suit Mean?

On January 29, 2021, The Hollywood Reporter shared that Cunningham has launched a lawsuit against Paramount and Warner Bros over the net profits of the Friday the 13th series. This suit is completely separate from the one between Cunningham and Miller, though elements of them could end up related.

This suit is only with respect to the licensing of Cunningham’s rights to the studio for the 2009 Friday the 13th remake. Cunningham is alleging that Paramount and Warner Bros used “improper deductions of fees and bonuses, undervalued licenses, an underreporting of merchandizing revenue and pay TV income, and on and on,” in calculating the amount owed to Cunningham for licenses to Friday the 13th. Further, he alleges that Paramount and Warner Bros redacted the license agreements preventing him from getting a clear picture of the flow of money, stating they “withheld documents would reveal that the Pictures’s distribution was structured to inequitably advance the interest of Defendants (the studios) and favored third parties.”

Speculating without having read the claim, it appears Cunningham is alleging that Paramount and Warner Bros engaged in “Hollywood accounting,” which lead to him not getting the fullest payout for his licensing. Cunningham would have licensed the Friday the 13th rights (as they existed at the time of the remake) to the studios for the 2009 film. Licensing agreements vary, but we can assume this one granted Cunningham a percentage of profits, which he is alleging were fudged by their accounting resulting in him getting paid less than he feels he was entitled.

What Is Hollywood Accounting?

“Hollywood accounting” is a name given to how studios often engage in creative bookkeeping to ensure their movies appear to have not been profitable. Essentially, movies are set up as corporations, and every expense can be counted as against profit. This includes things like travel, marketing, and any number of expenses a project can incur, including money paid to the studio and its executives.

This accounting can affect how agreements for gross profits are paid out. Often, cast and crew have contracts with the studio that include payment in the form of a percentage of the film’s profits. If a movie shows no or low profits, these payouts can be minimal or non-existent. It’s alleged that studios often engage in creative accounting to divert the gross to pay for things like bonuses or other studio expenses which can deem a project unprofitable. This greatly affects how much is paid out to those with profit percentages  payouts in their contracts.

This has been the subject of lawsuits before. Return of the Jedi notoriously has made no profit. Famously, Peter Jackson and Wingnut Films sued New Line Cinema, along with actors and Tolkien’s estate, for their gross percentage payouts. According to New Line’s accounting, The Lord of the Rings trilogy made no profits. Similar suits were launched for Harry Potter, Fahrenheit 9/11 and My Big Fat Greek Wedding.

Cunningham is really coming for Hollywood’s jugular, engaging in precedent setting battles for copyrights and profit shares. In his newest suit, there’s more precedent and I would bet it will be settled out of court, as compared to his ongoing suit with Miller. That said, if he is passionate about the precedent setting cases in which he’s engaged, he might be motivated to take this one all the way to the finish line.

Will this Further Delay Friday the 13th Media?

 It might.

This is all speculative, but Cunningham knows his legal rights to the franchise’s future are in limbo. There might have been risk in targeting the studio while the rights to make more Friday the 13th media were still in hand. For instance, Peter Jackson refused to work with New Line while his case was proceeding, and he was therefore not asked to direct The Hobbit. Since Cunningham’s rights and therefore, the franchise, are in legal limbo, he has little to lose in choosing to tackle the studio now. He’s also potentially  avoiding any possible allegations for diminishing value since no one can make more Friday the 13th media right now anyway.

As far as this speaks to delay, it’s possible the studio and/ or Cunningham might not engage in any more licensing deals for the Friday the 13th rights. This could either mean further delay in getting more media, or it might have been a strategic move on Cunningham’s part to exploit the existing delay to get this matter heard. If the Miller case is resolved, I would bet the parties would be motivated to settle this matter quickly and jump on making a new film rather than it being a further source of delay. 

How Does this Apply to Clive Barker and the Hellraiser Franchise?

Last month, Clive Barker, writer of the original Hellraiser, sued for a declaratory judgment that he can terminate his copyright transfer and regain the franchise. 

Another thanks to our pal, Larry Zerner, who pointed out that this would only come into effect 35 years after the original 1986 sale (in 2021). Until then, filmmakers are in the clear with the rights they currently own.

As of April 2020, Spyglass Media Group is developing a Hellraiser “reboot” with director David Bruckner and writers Ben Collins and Luke Piotrowski. HBO is also developing a television series with David Gordon Green and Danny McBride (among others) who were key players in the very successful Halloween reboot. As far as these projects go, they will be free and clear if they drop before December 2021, a potential challenge given the ongoing production delays as a result of COVID-19 lockdowns.

The “what’s next?” of it all is certainly the most interesting question. What’s important to know is that this clause was written with the expressed intention of getting copyrights back to the original owners, as of right, so their success is to be expected. Cunningham’s argument, if successful, would raise a lot of issues with WGA protection of writers. It could potentially be dangerous for screenwriters, and it’s possible the WGA would step in and could look to Congress. 

In 2019, Wes Craven’s estate quietly took back the rights to Nightmare on Elm Street. The Friday the 13th case decision will certainly be something studios are dancing around in a panic. Clive Barker is being represented by Marc Toberoff, a lawyer most known for representing Jerry Siegel and Joe Schuster in the ongoing fight for ownership of Superman. Toberoff represented the estate of Jack Kirby in the battle for ownership of comic characters like the X-Men, Hulk, and Thor. He is also currently representing multiple estates in a termination claim as against Marvel Comics started in September 2021.

That he is notable for his successful battles for high profile character ownership suggests Toberoff foresees success with Hellraiser, and presumably, other franchises. The slasher boom of the late 1970s and 1980s is blowing through the 35-year mark. NOES has already been clawed back, but what about the rest of the slasher villains sitting in the wings itching to be rebooted? They could all be reverting to their original owners. 

For us horror fans anxiously awaiting a new Jason movie, this isn’t great news. The last time Jason was on screen was over ten years ago, and with elements of the Voorhees franchise still in the air even after the impending appellate court decision, new Jason media isn’t on the horizon. For those of us who prefer legal dramas to slasher flicks, this could be a riveting battle of oral arguments, briefs, precedents, amici, and maybe an en banc. But those of us who just want to see Jason hack up some counselors, we have to believe Pamela Voorhees when she says this is Jason’s gift: he can never die.

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Lindsay Traves

Lindsay Traves is a Toronto-based writer. After submitting her Bachelor’s thesis, “The Metaphysics of Schwarzenegger Movies,” she decided to focus on writing about her passions; sci-fi, horror, sports, and comic books. You can find her writing on CGMagazine, Pajiba, What to Watch, Grim Magazine, StarTrek.com, and Bloody Disgusting and can follow her work on Twitter and Instagram. You can also check out her podcast, The Pod and The Pendulum, at your usual podcast spots and find The Smash List on YouTube for tech reviews.

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