#Columbia Pictures Sues to Retain Rights to ‘Bad Boys’ Story

Columbia Pictures is suing George Gallo, who wrote the story that was developed into the 1995 action hit Bad Boys, to reassert its rights to the movie franchise.

In a complaint filed in California federal court on Friday, the studio argues that Gallo can’t exploit a provision in copyright law that allows authors to claw back ownership of their works after a certain period of time. It’s asking the court for a declaration that Gallo penned the story as a work made for hire, which would make it ineligible for termination.

Bad Boys, which marked Michael Bay’s first feature and starred Martin Lawrence and Will Smith, has spawned two sequels and a TV spinoff. Sony is reportedly eyeing a fourth installment to the franchise with the duo expected to return.

When word of those plans broke, Gallo served the studio with termination notices that purported to terminate the assignment of his copyrights to both Columbia Pictures and Sweet Revenge Productions, his own loan out. He asserts Columbia Pictures lost its U.S. rights as of June 27, 2022 to make new works based on his 1985 story Bad Boys is based on called Bulletproof Hearts.

U.S. Copyright law gives authors or their heirs the ability to recapture previously-transferred copyrights, typically after waiting 35 years for newer works. Studios recently have been fighting legal battles over the rights to iconic franchises birthed in the 1980s, including Top Gun, Predator, Terminator and Friday the 13th. But works made for hire aren’t subject to termination, which is Columbia’s main argument in its suit.

In a 1985 contract, Gallo represented that he “created and/or wrote the Story as an employee-for-hire of” Sweet Revenge,” according to the complaint.

Gallo attempts to get around the argument by claiming that he had personal rights to the story that he subsequently assigned to his production company, the suit says. Columbia, however, questions the representation. The studio stresses that Gallo, in his termination notice, “for the first time ever asserted to Columbia Pictures that on September 23, 1985 — just one day before he and Sweet Revenge made the Agreement — Gallo had assigned his purportedly personal rights in the Story to Sweet Revenge.”

If the assertion is true, the suit says that Gallo was “duty bound to disclose the flat-out inconsistency” between representations in his contract with Columbia Pictures and any claim that he attempted to assign a copyright to his story to his production company.

“Gallo cannot have it both ways: he cannot make representations to induce the purchase of the Story and then avoid the consequences of later claiming the representations were false,” writes the studio’s lawyer Kelly Klaus in the complaint.

Writers, actors and directors, among other talent in the entertainment industry, often contract with studios through their loan-out corporations. This provides them with a variety of advantages, including substantial tax benefits and limitations on personal liability. But the widespread use of these entities when artists create copyrighted works as employees of their own corporations weren’t considered in the 1976 Copyright Act’s restrictions on termination rights.

In 2019, artists sued Universal Music Group in a purported class action claiming that the publisher ignored copyright termination notices. UMG’s primary defense was that the the copyrights at issue in the case weren’t owned by the artists themselves but their loan-out companies. Under the Copyright Act, only people can initiate the termination process, the company said.

A federal judge sided with UMG. “Only grants ‘executed by the author’ (or the statutorily designated successor) may be terminated,” states the ruling. “Therefore, third parties to a contract and loan-out companies, which ‘loan’ out an artist’s services to employers and enter into contracts on behalf of the artist, do not have a termination right under the statute.”

In his ruling, the judge rejected arguments that loan outs are merely a tax-planning device. He found that “people cannot use a corporate structure for some purposes — e.g. taking advantage of tax benefits — and then disavow it for others.”

Sweet Revenge didn’t immediately respond to a request for comment.