Will Paramount’s Lawsuit Become the Studio’s Own Kobayashi Maru?

by Reece Watkins

Paramount Pictures’ copyright suit against the crowdfunded fan film “Axanar” could very well turn out to be a no-win scenario for the beleaguered studio, much like the “Kobayashi Maru” test from “Star Trek II: The Wrath of Khan”. What appeared to many to be an open-and-shut infringement case against a handful of fans now threatens to become a legal quagmire far beyond the quick-and-out victory the plaintiffs had hoped for. Indeed, there doesn’t seem to be ANY upside for Paramount, even if it prevails in the case.

How can I say that? Well, let’s take a look at the best-possible outcome for Paramount first. If the case goes to trial, it will most likely take at least two years before a decision. Even if the jury finds in their favor on all counts, the best result would be that the Axanar film will never see the light of day, and they would be awarded a monetary settlement of damages. Axanar Productions could be held liable for damages, legal fees, and court costs. Except, of course, that the small company doesn’t HAVE any real assets to hand over, and Alec Peters, the executive producer of Axanar, certainly doesn’t have it, either. The judgment would be virtually unenforceable, as the company would simply fold, and Alec would be forced into bankruptcy. Paramount would receive nothing for their outlay of time, energy, and legal fees, which will certainly run into the millions of dollars. And remember, this is the BEST POSSIBLE outcome should they pursue this case to the very end.

There’s a lot more at stake for Paramount, however. Axanar’s legal team are top-notch intellectual-property attorneys, and they are not about to let Paramount off the hook without a fight–and one that may reveal far more than Paramount is willing to expose. Due to the vagaries of many company mergers and splits since the original show first aired in 1966, Paramount only holds the theatrical/film rights to Star Trek. CBS holds all the rest, most importantly to the original television material. What Axanar’s attorneys have pointed out in their motion to dismiss the lawsuit is that the theatrical Star Trek films are themselves derivative works of the original television material, so the only bits that Paramount truly has any real copyright over are the things that were wholly original to the films themselves. Paramount does not own Captain Kirk et al; CBS does, as the current owner of the copyright on the 1966-69 series. This is legally significant, because unless Paramount can prove that Axanar is infringing on material that they truly hold the copyright to, Paramount has no legal standing to sue and could be removed from the case by the court. That would be a colossal embarrassment for Paramount.

The question of ownership is vital, and should Paramount refuse to settle this case, the defense will almost certainly demand the plaintiffs prove chain of ownership all the way back to 1966, and that’s not as easy as it sounds. When large corporations merge or split, it’s not at all uncommon for things to fall through the cracks, and when talking about the most beloved American science fiction franchise of all time, the one thing you do not wish to find if you are a plaintiff in this case is that one of your tentpole properties has fallen into the public domain through some paperwork foul-up four decades ago. If Paramount does not find a way out of this lawsuit quickly, Axanar’s defense team will absolutely force them to turn over that stone and see what scurries out, which could be disastrous for the studio.

But that’s not all Paramount has to worry about. Even if they can manage to produce an unbroken ownership chain all the way back to 1966, and convince a judge that somehow Axanar infringes on material in films that all take place at least fifty years after the time period in which Axanar is set, there is still a huge amount of money at risk for the film studio, namely in the form of the upcoming “Star Trek Beyond” film. With a budget well into nine figures, the slightest whiff of bad publicity could easily reduce the opening weekend box office for their summer blockbuster by more than they could hope to be awarded in damages, even if Axanar Productions did have millions to pay out.

This is the 50th anniversary year for Star Trek. This should be the marketing department’s field day for pleasing old fans and pulling new ones toward the franchise. Yet, a lawsuit is hardly the best choice for a marketing tactic. The news media do love a good David vs. Goliath story, and this lawsuit has already received national coverage. If the lawsuit is not settled before the release date for Star Trek Beyond, it is almost certain that the major news outlets will bring it up again that week. A single poorly-edited YouTube trailer for the film received such harsh reaction from the fans last year, that the film’s writer and director were on social media doing spin control within forty-eight hours. Even though Star Trek Beyond has nothing to do with Axanar, and vice versa, unless the lawsuit is settled, every time the film is mentioned, the lawsuit will be as well. The director of Beyond, Justin Lin, has already tweeted publicly that the lawsuit is a bad idea.

Moving past even the broad net that Star Trek casts, the lawsuit has nothing but bad implications for the studio as a whole. It has been reported that Viacom is looking to sell their stake in Paramount, after the studio failed to meet Viacom’s earnings expectations. If this lawsuit proceeds into the discovery phase, where one of the most valuable properties Paramount has claim to may be found to be legally shaky, Viacom could lose tens of millions in Paramount’s value before the first interested buyer steps forward. That’s the sort of loss where studio executives’ heads go on the chopping block. Disney may have been able to afford tanking their own $250-million-dollar film “John Carter” a couple of years back, but Paramount certainly is not sitting on the piles of cash Disney has to fall back on.

To sum up, Paramount is either looking at winning a worthless judgment, or losing millions of dollars, and fifty years of goodwill of the fans, all by pursuing a lawsuit that they may not even have been legally entitled to bring in the first place. Or worse, both. They can win absolutely nothing by continuing to press this case. But there is a way out for them–by dropping the case now and letting Axanar proceed with their blessing, they can go from bully to savior with the stroke of a pen. By working with Axanar, the story goes from “Studio Bullies Fan Film” to “Paramount blazes new media trail with landmark deal”. That can only help the box office for Star Trek Beyond, and when a CBS approved Axanar hits the retail channel, Paramount could stand to make millions of dollars-the only way it can possibly make any money at all off the whole fiasco. That’s the studio’s only hope to solve its own Kobayashi Maru–stop the test now, before they sink their own ship.