Lucasfilm strikes back – no unjust enrichment from “resurrecting” Grand Moff Tarkin

Background

Tyburn brought a claim in unjust enrichment against the defendants, Lunak Heavy Industries (UK) Limited and Lucasfilm Ltd LLC. Lunak produced the 2016 Star Wars film Rogue One: A Star Wars Story, which it created using intellectual property licensed to it by Lucasfilm.

The claim of unjust enrichment centred on a letter agreement between Tyburn, the actor Peter Cushing, and Peter Cushing Productions Limited made in 1993. The letter agreement was drafted in contemplation of Mr Cushing’s terminal illness, as well as the possibility that the illness might prevent him from fulfilling his work in appearing in a television film entitled A Heritage of Horror.

Clause (e) of the letter agreement provided that, in connection with the production, completion and exploitation of the TV film, Tyburn could use, among other things, all forms of special effects, computer-generated imagery and “all and any successors to or replacements of all and/or any of the above, including any processes or techniques which may hereafter be created, discovered or invented”, in order to supplement, complement, facilitate, complete and/or exploit Mr Cushing’s performance in the TV film, “to an unlimited greater extent than would be customary with an actor of Mr Cushing’s standing”.

In clause (h), the Cushing parties also agreed that, if the TV film were not made, neither of them would permit Mr Cushing’s participation in any film or programme by way of being reproduced (among other things) by special effects or computer-generated imagery (or by any successors to or replacements of those). Further, clause (i) provided that Mr Cushing would ensure that his successors, administrators, beneficiaries and executors would be bound by the agreement in clause (h).

The somewhat morbid drafting of the letter agreement proved to be prescient, as Mr Cushing died shortly afterwards, and the TV film was not made. Decades later, when Tyburn discovered that Lucasfilm intended to recreate Mr Cushing’s likeness in the role of Grand Moff Tarkin, it wrote to Lucasfilm, stating that it was not permitted to do so without Tyburn’s consent, and Tyburn claimed that it had incurred a substantial loss as a result of Lucasfilm’s actions, because it had been deprived of the commercial benefit of being “first out of the gate” with a film starring Mr Cushing after his death.  

Claim

In formulating its claim, Tyburn followed the formula set out by Lord Justice Steyn in Banque Financière: ^[3]

1. Has the defendant benefited, in the sense of being enriched?
2. Was the enrichment at the claimant's expense?
3. Was the enrichment unjust?
4. Are there any defences?

Accordingly, Tyburn claimed that:

1. Lunak and Lucasfilm were enriched by the purported right/licence to reproduce the likeness of Mr Cushing in connection with the production of Rogue One and the exploitation of the licence for commercial purposes in connection with Rogue One.  
2. Those benefits/enrichments were at Tyburn’s direct expense and/or were obtained as part of co-ordinated or closely related transactions between Tyburn, Cushing’s executors and Lunak and Lucasfilm.
3. The enrichment was unjust because Tyburn had not been made aware of the enrichment, and Tyburn was operating under the belief that Mr Cushing’s executors and Mr Cushing’s agent intended to involve Tyburn in any reproduction of Mr Cushing’s likeness.
4. There were no defences.

So, Tyburn claimed restitution for the value of the rights obtained or exploited by Lunak and Lucasfilm.  

Judgment

In considering the defendants’ strike-out application, the Court of Appeal revisited the key principles, in a joint judgment given by the Lady Chief Justice Lady Carr, the Chancellor of the High Court, Sir Colin Birss, and Lord Justice Zacaroli.

The judges noted the need for balance between two competing strike-out principles:

• The first principle was set out by Mr Justice Lewison in Easyair, ^[4] namely that “if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it”.
• That principle must be weighed against the need for caution when the court is asked to make a decision on a strike-out application in an area of law that is uncertain and developing, as stated in Barrett v Enfield. ^[5]

The judges acknowledged that the law surrounding unjust enrichment was indeed a developing and complex area of law, but that did not preclude a court from making a summary determination of a question in an unjust-enrichment claim where appropriate.  

Enrichment “at the expense of” the claimant

The judges noted that a key element of formulating a claim for unjust enrichment is pleading that the defendant has been enriched at the expense of the claimant. They considered that the words “at the expense of” do not express a legal test, but should instead be understood in light of the underlying purpose of unjust enrichment, which is, following the ruling in Investment Trust Companies, the correction of “normatively defective transfers of value”.

That purposive interpretation was explained more fully in the ITC case, in which Lord Reed stated that the various legal requirements indicated by the "at the expense of" question were designed to ensure that there has been a transfer of value, of a kind which may have been defective in a way that is recognised by the law of unjust enrichment (for example, because of a failure of the basis on which the benefit was conferred).

As such, most examples of enrichment will occur when the parties have dealt directly with one another, although that is not a requirement. There will also be instances where there is no direct dealing, for instance, in an agency relationship (where the agent is proxy for the principal), or where the right to restitution is assigned, or where a set of co-ordinated transactions has been treated as forming a single scheme.

Tyburn’s main case

Tyburn’s primary case was that Lunak and Lucasfilm were directly enriched at its expense, as a result of the direct transfer to them of the rights granted to Tyburn under the letter agreement.

Tyburn claimed that the value of those rights resided in: (a) the fact that Tyburn had the right to be the first to “resurrect” Mr Cushing; (b) those rights had utility in engaging Mr Cushing’s rights as a performer and in terms of passing-off claims; and (c) those rights were broad, in that they amounted to a purposive restriction on the exploitation of Mr Cushing’s performance rights and copyright.

Tyburn argued that the estate had wrongly exercised Tyburn’s right to prevent Lunak and Lucasfilm from resurrecting Mr Cushing, thereby depriving Tyburn of the opportunity to exercise that right itself. Tyburn contended that, as a result, the defendants appropriated the benefit of Tyburn’s claimed right to be the first to recreate Mr Cushing’s likeness.

The judges found no legal basis for this primary claim, noting that it suffered from a “fatal defect”, namely that Tyburn had failed to identify anything at all belonging to it that could be said to have been transferred to the defendants.  

In making their decision, the judges returned to the purposive analysis of Lord Reed in ITC, and the need, in an unjust enrichment case, to identify something that amounts to a transfer of value from claimant to defendant, which amounts to a loss suffered by the claimant through the provision of this benefit to the defendant.

Tyburn acknowledged that there was no proprietary right that had been transferred to the defendants. The only proprietary rights were those belonging to the estate, being the performance rights, image rights and other intellectual property rights belonging to Mr Cushing.

Under the letter agreement Tyburn had acquired: (a) a licence to use various methods to supplement, complement, facilitate, complete or exploit Mr Cushing’s performance in the TV film; and (b) a negative contractual right (if the TV film were not made) to block others from doing the same thing. Neither of those rights were proprietary rights that had been transferred to the defendants. When Lunak and Lucasfilm produced and exploited Rogue One, they were not exploiting either of the rights granted to Tyburn under the letter agreement. Tyburn’s right to resurrect Mr Cushing had solely related to the production of the TV film. It was therefore not engaged or infringed by the production of Rogue One, a completely different project.  

Likewise, although Tyburn held a negative right to prevent third parties from using Mr Cushing’s likeness, that right was never transferred to Lucasfilm or Lunak. Counsel for Tyburn argued that it should be interpreted as a right to be the first to resurrect Mr Cushing, but the judge rejected that submission, finding no support for such a right in the original letter agreement.

Tyburn’s secondary case

Tyburn claimed in the alternative that the defendants were enriched at its indirect expense, because the benefit received by Lucasfilm and Lunak came about “through a series of co-ordinated transactions”, such that there was a “clear, causal connection” between the rights conferred on Tyburn (under the letter agreement) and the benefit exploited by Lucasfilm and Lunak. Those rights were that: (a) Mr Cushing’s estate exercised Tyburn’s right of veto; and (b) Lucasfilm and Lunak exercised Tyburn’s right to be the first to resurrect Mr Cushing.

The court was not persuaded by the arguments that the transactions were co-ordinated. This was because there were 23 years separating the agreements, and the 2016 agreement was not within the contemplation of the parties to the letter agreement when it was made in 1993.  

Lord Reed’s judgment in ITC stated that co-ordinated transactions will together effect the transfer of value from the claimant to the defendant. That was not the case here, because nothing left Tyburn under the 1993 letter agreement. On the contrary, Tyburn was granted rights by Mr Cushing.    

Finally, Tyburn made a submission relating to “interceptive subtractions”, which involve affording the claimant a restitutionary remedy, for example, in scenarios where a defendant usurps an office to which the claimant was entitled and thereby receives sums from a third party to which the claimant was entitled. The court rejected the argument on interceptive subtractions for the same reasons as Tyburn’s other submissions, i.e. the ITC requirement that a transfer of value must pass from claimant to defendant, which had not occurred on the facts.

Conclusion

The judges concluded that Tyburn's claim was not sustainable as a matter of law, observing that “wherever the line is to be drawn, Tyburn's claim is clearly on the wrong side of it”. So, the Court of Appeal allowed the appeal and struck out Tyburn’s claim against the defendants.

Comment

The case is highly topical, given that AI tools are increasingly capable of “resurrecting” actors and celebrities, already enabling sophisticated “deep fake” digital replicas, and given that no cross-industry consensus has been reached yet on whether or (if so) how far performers should be expected to pre-agree that their image and likeness can be artificially generated and used by producers in future projects. That will, for now, largely be a matter of contractual negotiation from case to case, and of applying pre-AI laws with a degree of uncertainty, given the absence of specific legislation and/or case law on the point in many jurisdictions. As such, any lawsuit in this area is potentially instructive – even if the facts of this case were quite particular to it and might well not be replicated in other cases.

In procedural terms, although the law on unjust enrichment is complex and developing, the Court of Appeal found it appropriate in the circumstances to exercise its power to strike out the claim, on the basis that Tyburn’s claim was fundamentally flawed. The rights granted to Lunak and Lucasfilm by Mr Cushing’s estate in relation to the Rogue One film were rights that only ever belonged to Mr Cushing’s estate, following Mr Cushing’s death. Tyburn could not make out a claim that its proprietary rights in Mr Cushing’s likeness had been transferred to Lunak and Lucasfilm.

The claim was, in that sense, a Rogue One.

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Article written for Entertainment Law Review.