Paramount Brings ‘Coming To America’ Claim Before Copyright Claims Board To Shut Down McDowell’s Pop-Up

Contributing author: Heather Antoine

I was recently a panelist on a webinar that, in part, discussed the Copyright Claims Board (“CCB”). My co-panelists and I queried each other – who is the CCB intended to attract and who is actually going to use it? None of us could point to any particularly interesting case that had been brought before the CCB, which launched earlier this year. That time has come, and I could not be happier because it involves my favorite movie, “Coming to America.” (Quick side note, having copyright disputes that relate to your favorite holiday song and your favorite childhood movie in a span of months is quite a dream.)

“Coming to America” was released in 1988, grossed $350 million worldwide, and was even nominated for two Oscars. It is the story of a fictional prince, Akeem, looking for love in New York City (Queens, of course) while working a minimum wage job at a fast food restaurant named “McDowell’s.” In 2021, the sequel “Coming 2 America” was released, and while it was a shell of the original, it further captured the characters, locations, and branding. Over the years, it has become something of a cult classic, even inspiring JMC Pop Ups LLC (“JMC”), to open its own “McDowell’s” in New Jersey in the spring of 2021.

In March of 2021, ParamountPARA
sent a letter to JMC asking them to immediately cease promotion of the event, remove and permanently cease use of all Paramount’s protected intellectual property, destroy any infringing products, and more. JMC representatives responded that they were within their rights as their use of the movie’s imagery and characters was protected by the concept of fair use. Fair use is the right to use a copyrighted work without permission. Section 107 of the Copyright Act provides the framework for determining whether something is a fair use. It also identifies certain types of uses—such as criticism, comment, news reporting, teaching, and research—as examples of activities that may qualify as fair use (emphasis on may). More on this later.

Despite the cease and desist, JMC went forward with the event. That wasn’t enough for JMC though, and in spring of 2022, they began announcements for an additional Northern Virginia location. Again, Paramount reiterated its demands. According to the Claim, JMC explained that they would “run out of money if they were to shut down this operation and proposed executing a written agreement acknowledging that this would be JMC’s last McDowell’s pop-up.” Paramount denied this request. This is not entirely surprising given Paramount’s stance during promotion of the first pop-up. JMC proceeded with its opening from May 20, 2022, through June 5, 2022.

The CCB Claim, brought by Paramount Pictures Corp (“Paramount”) last week, alleges that JMC misuses its intellectual property to “deceive parents and children into believing that the Infringing Restaurant is affiliated with, or authorized by, Paramount Pictures… Images, videos, sets, signage, costumes, character designs, and character names appearing in the Infringing Restaurants, and in related marketing materials are identical or substantially similar to copyrightable material.” It also includes the following:“to make matters worse, the quality of the food is in serious question, as consumers have reported feeling discomfort after eating at the Infringing Restaurant.”

Let’s get back to fair use. Like so much in copyright law, it can be subjective which leads to many disputes. Here, JMC makes a novel argument. In their response letter to Paramount, they state:

“The fundamental nature, and ongoing comedic theme, of the “McDowell’s” concept in the Films is the transparent use of, and infringement upon, McDonald’s intellectual property. The purported “elements” identified by Paramount concerning McDowell’s are merely McDonald’s trademarked properties and other intellectual property rights of McDonald’s, associated with the goods and services used by McDonald’s. The purported elements are otherwise derivative of McDonald’s intellectual property…

Of course, the Films use McDonald’s intellectual property in a satirical manner, constituting fair use. Nevertheless, Paramount’s utilization of McDonald’s properties on a fair use basis does not give Paramount its own copyright rights in its fair use of McDonald’s properties. JMC’s use of “McDowell’s” and any purportedly associated elements merely reiterates the same satirical fair use of McDonald’s intellectual property as previously undertaken by Paramount in the Films.”

The following four factors are used to evaluate fair use:

1. Purpose and character of the use, including whether the use is of a commercial nature or is for nonprofit educational purposes. Has the material been transformed in some way?
2. Nature of the copyrighted work; you have more leeway to borrow from factual works, for example.
3. Amount and substantiality of the portion used in relation to the copyrighted work as a whole. The less you take, the better, but keep in mind that would not apply to parodies.
4. Effect of the use upon the potential market for or value of the copyrighted work. Does a McDowell’s pop-up deprive Paramount of potential income?

Copyright lawyers could, of course, disagree on each of these factors.

The most important question I have though is why bring this claim before the CCB? For those of you unfamiliar with the CCB, let me provide a bit of background. In December of 2020, Congress passed the Copyright Alternative in Small-Claims Enforcement Act (CASE Act). This resulted in the establishment of the CCB, a tribunal within the Copyright Office that “provides an efficient and user-friendly option to resolve certain copyright disputes that involve up to $30,000.” Claimants are not required to be represented by counsel and the process is fairly streamlined.

At first blush, this may sound like a great option, but there are definitely a few drawbacks. First, once you file a claim with the CCB, you can no longer bring the same claim in federal court. And with that, you waive your right to a jury trial. The CCB is only able to consider a set number of claims. The CCB is voluntary, so the allegedly infringing party can simply choose to “opt out” of a CCB proceeding. If that happens, your recourse would be to bring the claim in federal court. You must have a registered copyright. You can bring a claim while your application is pending, but if it is rejected, your claim would be dismissed. You can only obtain attorneys fees if the other party acts in bad faith. Finally, you are not entitled to an injunction requiring the other party to stop any infringing activities. (The parties can make agreements that they will stop infringing, however.)

Given that, I am left scratching my head as to why Paramount would consider the CCB for this claim. Paramount is represented by counsel at Kilpatrick Townsend & Stockton, who prepared a lengthy claim, including 25 exhibits. The cost of preparation of the Claim alone is likely to amount to a significant piece of the $30,000 they are allowed to recover before the CCB; it is highly doubtful they would be able to recover attorneys fees in this matter; and they cannot obtain an injunction. Also, JCP could choose to simply “opt out,” forcing Paramount to then file in federal court. Or, worse, they may proceed knowing their damages are capped at $30,000 (absent a finding of bad faith).

Let’s play out one last scenario. If “Coming to America” was never made and someone tried to open McDowell’s, they would undoubtedly be sued by McDonald’s. However, McDowell’s was a satirical restaurant in a movie where a land called Zamunda exists. But the McDowell’s pop up, is a real place. While the copyright claims brought by Paramount may be shaky, McDonald’s, who is in the business of selling burgers, may decide to bring their own claims.

“Look… me and the McDonald’s people got this little misunderstanding. See, they’re McDonald’s… I’m McDowell’s…” – Cleo McDowell (played by John Amos), ‘Coming to America’ © 1988, Paramount Pictures

Legal Entertainment has reached out to representation for comment, and will update this story as necessary.

Representatives from Paramount declined to comment while the case is still pending.

Heather Antoine is a Partner and Chair of Stubbs Alderton & Markiles LLP’s Trademark & Brand Protection and Privacy & Data Security practices, where she protects her client’s intellectual property – including brand selection, management, and protection. Heather also helps businesses design and implement policies and practices that are compliant with domestic and international privacy laws.