“If my answers frighten you Vincent, then you should cease asking scary questions.”
– Jules Winnfield in Pulp Fiction
There is no avoiding the complicated questions that quickly follow an explosive new technology when the law is unsettled and the market is lucrative. As Hollywood enters the NFT goldrush, content creators and distributors need to understand the complexities and nuances that comes with minting a nonfungible token (NFT). The spotlight shines bright on Quentin Tarantino, Miramax and the cult-classic-film Pulp Fiction as they battle over highly-anticipated NFTs in a contract and intellectual property lawsuit. This case highlights the importance for NFT creators to ensure they have the associated intellectual property rights necessary to mint and sell NFTs.
In early November, at the NFT.NYC conference, Quentin Tarantino announced his plans to mint seven never-before-seen scenes from his film Pulp Fiction as nonfungible tokens (NFTs). NFTs are “minted” on a blockchain to give it a verified identity, making it a collectable that can become extremely valuable. Essentially, a NFT becomes an original digital piece of art (or a unique copy of a limited series of reproductions) that can be bought and sold the same as any other collectible.
Tarantino’s news excited both fans of the Academy Award-winning director and screenwriter’s work and fans of blockchain technologies and digital currencies. Tarantino planned to use his original hand-written scripts and reveal exclusive information about the making of the film in the seven NFTs. Tarantino was to auction the seven scenes as “Secret NFTs” on the blockchain “Secret Network”, which focuses on private transactions. The auction would have taken place on the largest NFT marketplace, OpenSea and the NFTs were expected to go on the market later that month. An auction date, however, has yet to be set.
Tarantino’s ambitious plans stalled when Miramax, LLC, Pulp Fiction’s production company, sued the film’s writer and director. Miramax’s complaint, filed in the Central District of California on November 16, 2021, generally asserts that the NFTs contain content that Tarantino does not have the rights to mint or sell. Specifically, Miramax brought breach of contract, copyright and trademark infringement claims against Tarantino, as well as claims of unfair competition. The production company decided to file the lawsuit when Tarantino and his team continued to plan the NFT auction after Miramax sent a cease-and-desist letter.
On December 9, 2021, Tarantino filed an answer to Miramax’s complaint, in which he describes the lawsuit as “offensively meritless.” Tarantino claims that his contracts clearly and unambiguously grant him the opportunity to publish portions of his original handwritten screenplay for Pulp Fiction. Pulling no punches, Tarantino accuses Miramax of “bit[ing] the hand that fed it for so many years,” calling the production company “a shell of its former self and flailing under a new ownership consortium.” Tarantino asserts nine defenses to Miramax’s claims, including that the complaint fails to state sufficient claims for relief, the doctrine of unclean hands, Tarantino’s rights under the First Amendment and copyright fair use.
At issue in this case is Tarantino’s right to mint and auction NFTs consisting of uncut handwritten scripts from Pulp Fiction and exclusive commentary from Tarantino himself. Miramax asserts that it retains “the right to sell NFTs of such excerpts of any version of the screenplay to Pulp Fiction.”
Central to this dispute is an interpretation of Tarantino’s “reserved rights,” which were carved out of the original 1993 contract with Miramax. Although the contract gives broad intellectual property rights over the film to the production company, including any products licensed for sale such as clothing and other novelty items, Tarantino himself retained some rights. Among other things, Tarantino reserved the right to “print publication (including without limitation screenplay publication, “making of” books, comic books and novelization, in audio and electronic formats as well, as applicable), [and] interactive media.” Therefore, the question becomes: whether selling NFTs based on excerpts of a screenplay qualify as publication of the screenplay.
Miramax alleges that NFTs with such a direct connection to the film are not included within Tarantino’s “reserved” contractual rights. Miramax argues that the NFTs are a one-time sale and are not equivalent to the publication of a screenplay. Miramax also argues that NFTs do not fall within the intended meaning of “print publication” or “screenplay publication.” Therefore, according to Miramax, minting a Pulp Fiction NFT as Tarantino has announced would infringe on Miramax’s ownership rights under the contract. Miramax also alleges that Tarantino’s actions have interfered with the production studio’s own plans to enter the market for Pulp Fiction NFTs. In sum, Miramax believes it owns the rights to any Pulp Fiction NFTs under its agreement with Tarantino and wants to capitalize on those alleged rights.
Tarantino’s argument, expectedly, is that the NFTs relate to publication of the screenplay and therefore fall directly in his reserved rights under the contract.
NFTs are a relatively new technology with a booming market, so, not surprisingly, the law is unsettled in this space. Legislation and regulations are often slow to catch up to such advances and courts will have to fill in the gaps. Courts, lawyers, creators and rights holders alike will have to grapple with how this new technology fits into the existing and emerging law. For example, how should a contract that assigned certain intellectual property rights to a production company almost 30 years ago be construed when it comes to the right to mint NFTs, a technology developed within the last 10 years?
The Pulp Fiction NFT lawsuit highlights the overarching questions for the entertainment industry: who can mint NFTs that relate to an existing film or TV series and what can be minted? The highly anticipated answer will impact not just the entertainment industry but reverberate through many industries who utilize intellectual property and blockchain-technology principles. There will likely be a shift to include NFTS in contracts that contemplate intellectual property rights moving forward.
Miramax’s lawsuit against Tarantino is one to watch and will likely have a ripple effect beyond the entertainment industry, should the case not settle. NFTs and other blockchain technology have layered and nuanced issues. Anyone entering the NFT space should be aware of potential issues, for which precedent has not yet been, and consult an experienced attorney about their rights and liabilities in this emerging field.