Hasbro, Inc. and Wizards of the Coast LLC (hereafter referred to collectively as “Hasbro”) filed a lawsuit against Sweetpea Entertainment, Inc. and Sweetpea B.V.I. LTD. (hereafter referred to collectively as “Sweetpea”) mainly for copyright and trademark infringement. Hasbro claims that it owns the ‘Dungeons and Dragons’ copyright and trademark, and therefore Sweetpea has no right to start or resume production of a new Dungeons and Dragons movie. The lawsuit ensued when Hasbro learned about Sweetpea’s motion picture deal with Warner Bros. (“WB”).
Dungeons and Dragons (“D&D”, the “Property ”) is a fantasy role-playing game that encourages players to imagine adventures. Each player can choose from one of the seven character classes, each has its own traits and specialties, to become its alter ego throughout the adventure. A Dungeon Master, who sets out rules, guides the players in their adventure and governs the game. The game comprises of an “entire universe of settings, rules, creatures and artifacts disseminated in books, magazines and other publications [.] (Sweetpea vs. Hasbro, 2013)” In 1974, Gary Gygax and Dave Arneson published the first D&D under Tactical Studies Rules, Inc., later became TSR, Inc. (“TSR”).
Courtney Solomon, one of the majority shareholders of Sweetpea, has wanted to turn D&D into a feature film since he experienced the role-playing game. When he discovered that no one has acquired for the motion picture rights to D&D, he contacted TSR and submitted a proposal. After two years of proposal after proposal, and extensive negotiations, TSR and Sweetpea entered into an Option Agreement dated May 3, 1991 (the “Option Agreement”). Sweetpea exercised the option and arrived at an Exclusive Irrevocable License Agreement (the “Agreement”) after exhaustive years of negotiations (Hasbro vs. Sweetpea, 2013).
On or about September 2, 1994, Sweetpea exercised its option under the Option Agreement and the terms of the Agreement went into effect. Sweetpea commenced hiring producers, scouting locations, negotiating with artists, and all the necessary steps to start production in the next few years. Unfortunately, both Sweetpea and TSR are having financial hardships. As a result, in or about May 1997, Wizards of the Coast LLC acquired TSR (Hasbro vs. Sweetpea, 2013).
On March 20, 1998, Sweetpea and TSR entered into an amendment to the Agreement (the “First Amendment”). This agreement allowed an extension for Sweetpea to produce the first motion picture (“the Picture ”) as outlined in the Agreement due Sweetpea’s lapse in the cure period. The agreement also outlined the timeline on when the sequel, prequel or remake rights would revert back to TSR. The document states that these rights will revert back to TSR five years after the initial U.S. release or seven years from the final director’s cut of the last picture, whichever is earlier. In addition, the First Amendment also outlines the payment schedules for motion picture and television...