What is striking to me is that the playwright, David Admji, brought the lawsuit as a declaratory judgment action against DLT Entertainment Ltd., the owner of the copyright in Three's Company. Typically, I would not advise a client to instigate litigation to resolve whether a work is non-infringing. The fact that DLT Entertainment had sent a "cease and desist letter" to Adjani and that the lawyers for DLT continued, in subsequent correspondence to insist that 3C infringed the copyright in the sitcom would not typically change the content of my advice. A cease and desist letter has no force in and of itself: all it does is declare the copyright holder's belief that a work infringes a copyright and his threat to enforce that belief by means of a lawsuit if the alleged infringer doesn't stop what he is doing. The threat, however, is often an empty one. Even if the threat is genuine, however, the recipient of the cease-and-desist letter gains little, if anything, by initiating a lawsuit rather than continuing what he is doing and waiting to see whether in fact the copyright holder will sue. In short, it's the same as far as the alleged infringer is concerned if he's the plaintiff in a lawsuit in which he is asking a court to rule that his work is non-infringing or he's a defendant in a lawsuit brought by a copyright holder seeking a court order that his work is infringing. Given that the threat of a lawsuit often is often just so much posturing, there's nothing to be gained and plenty to be lost (if only attorney's fees) by initiating the lawsuit.
The mistake of overreacting to a cease-and-desist letter is, I think, at the heart of the never-resolved lawsuit between Shepard Fairey and the Associated Press over Fairey's Obama Hope poster. Fairey had displayed the poster and, as a result, received a cease-and-desist letter from AP. In response, he sued AP in the United States District Court for the Southern District of New York. There was no real reason for Fairey to sue, however. AP might never have brought the lawsuit; moreover, if it did, Fairey would be in no worse a situation as a defendant than as a plaintiff. The case eventually settled after more controversy than it ever deserved, primarily because of Fairey's destruction of digital evidence in his possession that would have made identification of the photo on which he had based the poster's image easy (a move that was stupid but really of no great significance vis-a-vis the fair use question). The terms of the settlement have never been disclosed, so the cost to Fairey of having brought the lawsuit is unclear; nevertheless, there was, at one point, the real possibility that no lawsuit would have ever been brought, a possibility Fairey himself foreclosed by initiating formal legal proceedings.
Adjmi, however, was in a different position than Fairey in a significant respect. As Judge Preska stated in the first paragraph of her opinion, Adjmi wants to publish 3C and license others to use material from it and "therefore brings this action seeking a declaration that 3C does not infringe DLT's copyright in Three's Company." In other words, no one would publish Adjmi's play or agree to pay money for a license to use material from it without Adjmi first being able to guarantee to them that 3C did not infringe DLT's copyright. I have to hand it to Adjmi and/or his lawyers--bringing the lawsuit must have cost a pretty penny. In fact, the cost of obtaining such a legal guarantee (available only via a lawsuit or consent by the copyright holder) would block most people from even trying to get it; had Adjmi been like most people, the result would have been that he would never be able to publish or license his work. That, precisely, is what the problem is with copyright overclaiming.