1. What legal means would you have suggested to Montoro to protect his investment?

2. What practical means would you have suggested to Montoro to protect his investment?

Sometimes, no matter how carefully you protect your resources, for example by limiting your potential liability using the corporate and limited partnership forms, the sharks of the legal system can still find you and strip you clean. Such was the case with Edward L. Montoro, notorious producer of exploitation and “derivative” films of major studios’ blockbusters in the 1970s. Montoro made low-budget but relatively high-grossing “B” features such as Beyond the Door, a 1974 film that was allegedly a rip-off of the immensely successful Exorcist. With this film, Montoro held the record for independent film money-makers for more than a decade until another of his films bested it. That film was Grizzly. Allegedly a derivative of the 1975 blockbuster Jaws, Montoro’s Grizzly was produced on a budget of less than $1,000,000. It grossed nearly $40 million worldwide. Success followed success for Montoro until he perhaps went back to the well, or more accurately to the surf, one too many times. He acquired the rights to an Italian film (and alleged Jaws rip-off in its own right) called Great White for distribution in the United States. Montoro laid out plans and money for a nationwide release that could put him in the big time. Perhaps realizing the risks, he enclosed Film Ventures inside the limited liability shield of a Georgia Corporation and then funded the large-scale distribution of Great White through FVI as a member of a limited partnership. It did little good. The movie scarcely had been playing a week when Universal City Studios (Universal) obtained a preliminary injunction that forced the movie to be withdrawn from theaters, never to appear again. The court found, based upon some 17 close similarities elaborated in its opinion, that “the basic story points, the major characters, the sequence of incident, and the development and interplay of the major characters and story points of Great White” were substantially similar to Jaws. As a result of the significant financial losses that ensued due to his being unable to recover his investment through the showing of Great White, Montoro subsequently disappeared with $1,000,000 of FVI funds and has not been heard from again to this day. Should a preliminary injunction be issued against FVI to halt the exhibition of the film Great White?

The court concluded that Great White infringed Universal’s copyright in Jaws and held that the likelihood of irreversible injury to Universal if Great White was allowed to be exhibited was substantial. As a consequence, it ordered FVI to deliver to the Clerk of the Court “all prints and negatives of Great White or any version thereof.”