Facts

CatchPlay Inc. (Cayman) and CatchPlay Inc. (Taiwan) filed a complaint against Studio Solutions Group Inc. (SSG) and Johnny Lin seeking declaratory relief and alleging breach of fiduciary duty and constructive fraud, breach of contract, and aiding and abetting breach of fiduciary duty.

Plaintiffs distributed movies in Taiwan. Defendants, until recently, served as plaintiffs' buying agent for certain motion pictures.

Defendants SSG filed several counter-claims against plaintiffs asserting causes of action for breach of contract, trade libel, defamation, antitrust violations, tortious interference with contract, unfair business practices, and several others. Plaintiffs then filed an anti-SLAPP motion and a motion to dismiss, seeking to dismiss defendants' counter-claims.

PLAINTIFFS' CONTENTIONS:
Plaintiffs contended that defendants falsely represented that they were a division of, the parent company of, CatchPlay or its affiliates. They advertised these false claims in trade newspapers, including The Hollywood Reporter and Variety. Plaintiffs also contended that defendants were acting as plaintiffs' buying agent for certain motion pictures, and that defendants breached their fiduciary duties to plaintiffs and aided and abetted the breaches of fiduciary duty of plaintiffs' former general manager. After plaintiffs found out about defendants' misconduct, defendants began a "smear campaign" against plaintiffs intended to damage plaintiffs' reputation and disrupt plaintiffs' business relations by making false claims and even extortion demands. Plaintiff claimed that defendants demanded payment of more than $5 million from plaintiffs, and claimed to have terminated plaintiffs' rights in every film and television programming plaintiffs had acquired since 2008 - totaling 945 titles. Defendants also claimed the right to license those works to plaintiffs' competitor operated by plaintiffs' former general manager.

DEFENDANTS' CONTENTIONS:
Defendants SSG contended that plaintiffs unlawfully interfered with its licensing agreements with movie studios. Defendants also contended that plaintiffs persuaded the Taipei Film Trade Association to deny defendant film distribution certificates. As a result, defendant was unable to conduct business in Taiwan, causing defendant to lose millions in damages due to plaintiffs' breaches of contract. Defendant further contended that plaintiffs, unable to secure film titles through fair competition, resorted to tortiously interfering with defendant's contracts and business relations. Moreover, plaintiffs defamed defendant and engaged in unlawful, anti-competitive actions.

Result

U.S. District Court Judge George H. Wu granted plaintiffs' motion for preliminary injunction at the outset of the case and prohibited defendants from terminating plaintiffs' rights to exploit the 945 titles at issue. The court dismissed with prejudice SSG's antitrust counterclaims and denied without prejudice plaintiffs' anti-SLAPP motion directed to defendants' remaining counterclaims. The parties eventually entered into a stipulated judgment, granting claim for declaratory relief for CatchPlay Inc. (Cayman). The declaratory judgment confirmed CatchPlay's rights with regard to the 945 audiovisual works identified in the the schedule provided in the court documents. The court also found that CatchPlay did not authorize the licensing of, and is not responsible for, other audiovisual works licensed by SSG that are not on the schedule to the judgment.

Other Information

FILING DATE: Aug. 31, 2012.