Terms Allow Production Under Fan Guidelines; Peters Must Admit Overreaching

With its January 31, 2017, copyright infringement trial just 11 days away, Axanar producer Alec Peters settled with plaintiffs CBS and Paramount Pictures.

See also: Judge Denies Axanar Its Fair Use Defense

In a joint statement by both sides, Peters admitted overreaching in producing Prelude to Axanar and Axanar:

Paramount Pictures Corporation, CBS Studios Inc., Axanar Productions, Inc. and Alec Peters are pleased to announce that the litigation regarding Axanar’s film Prelude to Axanar and its proposed film Axanar has been resolved. Axanar and Mr. Peters acknowledge that both films were not approved by Paramount or CBS, and that both works crossed boundaries acceptable to CBS and Paramount relating to copyright law.

See also: Did Peters Actually Admit Copyright Transgression?

Lawyers for CBS and Paramount formally filed papers with the court January 20 to dismiss the case.

Like most settlements in civil cases, many terms may never become public. While neither side’s official statement said anything about a monetary settlement, Ars Technica reported payments were not part of the accord:

A spokesperson from Axanar told Ars Technica in an e-mail “we’re not paying anything,” with respect to the settlement.¹⁾

However, Axanar’s Mike Bawden denied that came from an official spokesman:

I have no idea where that statement came from; the official spokespeople for Axanar Productions didn’t provide that information and won’t confirm or deny it now. Sorry. We just can’t talk about it.²⁾

Axanar’s other spokesman, Morey Altman, later told AxaMonitor he was Ars Technica’s source but that he was mistaken:

I was the one who told [Ars Technica] that Axanar wasn’t paying damages. However, my information was incomplete having not been privy to the settlement agreement. … I spoke out of turn. This information is known only to the litigants and their legal representatives.³⁾

Apart from whether Axanar took a financial hit in the settlement, Peters’ decision to move ahead with even a trimmed-down version of Axanar presented several obstacles in his path. Among them:

• A threatened trademark lawsuit by former Axanar chief technologist Terry McIntosh over Axanar’s continued use of the name Ares Digital for its perk fulfillment platform.
• Pending complaints made to both the federal Internal Revenue Service and California’s tax board about whether Axanar properly paid taxes.
• A possible class action lawsuit brought by disaffected crowdfunding donors.
• Possible bankruptcy proceedings if Axanar fails to win other legal actions. This would be the second time Peters has declared bankruptcy for one of his companies. Propworx was the first, in which Peters left MGM holding the bag for nearly a quarter-million dollars.
• Possible thorough examination of Axanar’s finances due to these other legal actions, unlike the constrained "independent" review Peters had promised.

Judicial observer Janet Gershen-Siegel of the G&T Show noted other challenges Peters will face on the road to making Axanar:

If he ‘keeps’ the studio, that’s not exactly a ‘big win for Axanar’, seeing as that white elephant bleeds serious coin in monthly rent and no one is leasing it. Why not? Because (a) the electricals are apparently not up to code and (b) there’s a ton of competition in the area.

Gershen-Siegel noted that Peters now “has to, you know, deliver with”:

• Less money (and the crowdfunding campaigns were already on diminishing returns before suit was even filed.
• Donors who have already waited a long time and might not be interested in throwing good money after bad.
• His actions and meltdowns all online for all to see.

Axanar later indicated Burnett and Richter were permitted to work on the Axanar short under the terms of the settlement. Burnett, however, wouldn’t confirm whether he would stay on.

Sources connected to CBS told AxaMonitor that Peters is allowed under the settlement to make two 15-minute films that must adhere to the fan film guidelines announced by CBS in June 2016.

In its official statement, Axanar stated:

Axanar Productions was created by lifelong Star Trek fans to celebrate their love for Star Trek. Alec Peters and the Axanar team look forward to continuing to share the Axanar story and are happy to work within the guidelines for fan films for future projects.

Normally, under the terms of the fan film guidelines, Axanar would not be able to have participants who have previously worked for CBS or Paramount, which might have precluded director Robert Meyer Burnett and most of the professional actors, such as Soval actor Gary Graham, whom Peters had literally banked on to attract money from Star Trek fans.

The settlement, however, did allow Axanar to employ actors Richard Hatch, Kate Vernon, J.G. Hertzler and Graham, “but no other actors who have appeared in professional Star Trek productions.” None of the production team appeared to be allowed to be paid as well.

The terms require Peters to publicly acknowledge he and his company, Axanar Productions, crossed copyright boundaries they shouldn’t have.

The settlement allowed Axanar to keep Prelude available on YouTube, commercial-free. It can also be exhibited at fan conventions, film festivals and non-commercial events. It cannot ever be shown at official Star Trek conventions.

Interestingly, the settlement terms appear to be virtually the same as those in an early offering by CBS and Paramount by the time of the first face-to-face settlement conference in April 2016. AxaMonitor learned the details of that settlement offer — rejected by Peters — in May.

At one level, a settlement this close to trial was not surprising. Nearly 95 percent of civil cases settle before trial.

It was not clear what was to happen to the Axanar project in the wake of the settlement. Though the terms appear to allow some kind of production to move forward, it won’t be anywhere near the multi-million dollar spectacle Peters had promised the donors who fronted him $1.4 million.

According to court documents, that $1.4 million is gone, spent by Peters on personal expenses and an incomplete build-out of a commercial studio that was to have housed the production and made available to rent to other productions. The monthly expenses for the largely unused facility ranged between $12,000 and $15,000.

Though the settlement prevents the Axanar case from going to trial, it may yet have established a legal precedent affecting future fan works.

Federal Judge R. Gary Klausner‘s decision finding Axanar was not entitled to use fair use as a defense for its likely copyright infringement featured an analysis of the four points judges weigh in determining fair use.

His decision may be the first clear analysis of fan works’ eligibility to claim fair use. Just a week after Klausner’s decision, another case cited the finding in arguing that Axanar creative consultant David Gerrold and others infringed the copyright of the Dr. Seuss estate in producing a book called, “Oh the Places You’ll Boldly Go.”

While Axanar’s never-before-seen crowdfunding success and its ongoing commercial operations concerned CBS and Paramount, the settlement prohibits Peters from seeking public crowdfunding for Axanar, according to the statement. Private donations remain allowed.

That appeared to make available up to $100,000 in crowdfunding to produce Axanar as a single two-part 30-minute episode. What that may look like will take some time for Peters to figure out, his statement said:

For the next sixty days, Axanar Productions will be working through some final legal requirements requiring immediate attention. In addition, there are several pre-production issues that need to be re-visited before we can begin principal photography on our project.

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