The Stuff

(1985)

Effects Associates, Inc. v. Cohen

Larry Cohen, a low-budget horror movie mogul, paid less than the agreed price for special effects footage he had commissioned from Effects Associates for the film The Stuff. Cohen then used this footage without first obtaining a written license or assignment of the copyright; Effects sued for copyright infringement.

Cohen asked Effects Associates, a small special effects company, to create footage to enhance certain action sequences in the film. In a short letter dated October 29, 1984, Effects offered to prepare seven shots, the most dramatic of which would depict the climactic explosion of the Stuff factory.

Cohen was unhappy with the factory explosion Effects created, and he expressed his dissatisfaction by paying Effects only half the promised amount for that shot. Effects made several demands for the rest of the money (a little over $8,000), but Cohen refused. Nevertheless, Cohen incorporated Effects’ footage into the film and turned it over to New World Entertainment for distribution

Judgment: In favor of Cohen and the other defendants. We note, however, that plaintiff doesn’t leave this court empty-handed. Copyright ownership is comprised of a bundle of rights; in granting a nonexclusive license to Cohen, Effects has given up only one stick from that bundle — the right to sue Cohen for copyright infringement. It retains the right to sue him in state court on a variety of other grounds, including breach of contract. Additionally, Effects may license, sell or give away for nothing its remaining rights in the special effects footage. Those rights may not be particularly valuable, of course: “The Stuff” was something less than a blockbuster, and it remains to be seen whether there’s a market for shots featuring great gobs of alien yogurt oozing out of a defunct factory. On the other hand, the shots may have much potential for use in music videos. In any event, whatever Effects chooses to do with the footage, Cohen will have no basis for complaining. And that’s an important lesson that licensees of more versatile film properties may want to take to heart.