Something major was stolen from Netflix—and it wasn't the Declaration of Independence.
The streaming giant is being sued for $105 million by production company Op-Fortitude after it lost an unencrypted copy of the unreleased Nicolas Cage-led film Fortitude, which the production company says compromised the World War II thriller's success.
The July 29 complaint obtained by E! News alleged that associate producer Daniel Haido hand-delivered an unencrypted master copy of the film, known as a digital cinema package (DCP), on June 15 to Netflix's Hollywood studios.
Haido allegedly verbally advised an employee at the streaming service—which was a potential buyer for the project also starring Sir Ben Kingsley, Ron Perlman and Ed Skrein—that the files should "be deleted after the screening" since it was unencrypted, according to the lawsuit.
More than a week after dropping off the drive, filmmakers allegedly received a message from Netflix—which has denied any wrongdoing in the incident—sharing that the files had been stolen. According to the lawsuit, an exec wrote in a June 25 email that "someone stole a good amount of drives from our office desks this past week" and that the company was already "working through this with [its] security teams to no luck."
The exec said in the email that the stolen drives were likely sold "for scrap" since they required a key delivery message (KDM) to unencrypt the files, according to the complaint. The plaintiffs argued that Netflix knew their DCP was already unencrypted and "could be opened, viewed, published, copied, or distributed without any such key."
The lawsuit argued that the value of the film—which took over seven years to make and cost $45 million—depends significantly on being an unreleased, first-to-market project.
"Anyone who obtained possession of the drive immediately acquired access to an unreleased motion picture whose worldwide rights remained unsold," the filing alleged. "By losing control of the Film, Netflix destroyed that exclusivity and materially, if not completely, impaired the Film's marketability."
"It is not fathomable that a sophisticated buyer would invest tens of millions of dollars to acquire the Film," it argued, "and tens of millions more to market it—while facing the constant risk that it could appear online to be viewed widely for free at any time."
Op-Fortitude said that it had to temporarily pause its marketing and sales of the film, despite allegedly earning interest from multiple studios globally.
The filing also alleged that Fortitude's prospective success was independently verified through leading market research firm Screen Engine, claiming that the film had earned "high test scores in consumer screen testing, feedback from sales agents, the genre of the film and other factors." According to the suit, Fortitude was expected to earn revenues more than double the production budget, which would come out to $112.5 million.
Meanwhile, Netflix said in a July 31 statement to E! News that it "disputes any claim that it bears the risk of loss for a film delivered without the proper industry-standard safeguards."
"While we do not own the rights to Fortitude, we take content security seriously and have taken extra measures to support the filmmaker and his team," the message continued. "This includes conducting a thorough investigation and offering to monitor known piracy sites for any unauthorized distribution or sale."
The streaming service—which Op-Fortitude says never shared insight into their next steps following the theft, including whether a police report was filed—confirmed that it didn't provide additional information to the plaintiffs about its ongoing investigation.
"We have declined to share anything about our ongoing investigation with the law firm representing [producer] Simon Afram," the statement noted, "given their hostile attempts to extort money from Netflix over this situation—including immediately demanding $165 million for the film rather than work with us in good faith."
Sources at Netflix told E! that its content security team actively monitors piracy websites and it has, thus far, not seen any evidence that Fortitude has been leaked.