Marvel Suing to Keep Rights to ‘Avengers’ Characters From Copyright Termination

[HMSwolfe]

Considering it’s pretty widely believed that George sold Lucasfilm primarily as a way to protect jobs, only to have Disney axe a huge percentage of those jobs as soon as the deal was done, yeah, I’m going to say screw Disney in whatever legal trouble they might find themselves in. I honestly think arguing “but what’s the legal context? What does the contract say?” is kind of stupid, because Disney gets what they want, regardless of laws or contracts. Eighty years ago, copyright law was something else entirely, and pretty much only due to Disney’s interference is it where it’s at today. They push the laws to suit themselves and other massive corporations in favor of pseudo-monopolies that only benefit stockholders. Laws aren’t written in stone.

 

[Lightning]

You could just be purchasing the rights to IP and not any of the associated debts or obligations of the former IP holder.

That would cover outstanding debts, but not new ones created when they publish a new edition.

 

[signeddiamond]

It’s all negotiable. If I am about to purchase a home and it runs on city gas then that would be a reoccurring bill. If I told the current owner that I did not want city gas and that I wanted a wood stove installed instead then the current owner has a choice. They can say no to my money and stipulations or they can cancel the contract with the city and install the wood fire stove as requested. Not a perfect example but I’m trying to illustrate that you don’t need to buy something whole.

I get that a lot of people have very strong feelings about the company that owns some of their favorite properties. “Who cares what the contract says! They deserve it!”. I guess I care less about my personal feelings on the matter and more about the facts that remain unknown. When we hold such strong opinions it can cause people to ignore further insights.

What I know is that if I was in Disneys place I would not want to buy a bundle of loose ends. It’s a logistical nightmare especially on the scale of what they have been purchasing. Every purchase would stipulate that they settle up their existing contracts via settlement. If the creator refuses to settle almost all these contracts have a clause for arbitration where a third party would decide what the deal is. But hey, what do I know? Maybe Disney is really as reckless as people seem to think. I just haven't seen hard enough evidence.

 

[Moviefreak]

You could just be purchasing the rights to IP and not any of the associated debts or obligations of the former IP holder.

Exactly. I could run up a second mortgage on my house to install a pool and max out my credit cards to fund some other improvements on my home. What if I sell the home for a lot more and end up stiffing my bank on the loan and creditors on the cards.? A new owner of the property has taken possession on the house I built with that credit; are they now on the hook to pay that back? Hell no! Even though that debt was used to fund the property upkeep or addition, it is still MY debt. I think people are just looking for anything they can pin on Disney to get pitchforks out and protest them these days.

 

[Riceball]

Considering it’s pretty widely believed that George sold Lucasfilm primarily as a way to protect jobs, only to have Disney axe a huge percentage of those jobs as soon as the deal was done, yeah, I’m going to say screw Disney in whatever legal trouble they might find themselves in. I honestly think arguing “but what’s the legal context? What does the contract say?” is kind of stupid, because Disney gets what they want, regardless of laws or contracts. Eighty years ago, copyright law was something else entirely, and pretty much only due to Disney’s interference is it where it’s at today. They push the laws to suit themselves and other massive corporations in favor of pseudo-monopolies that only benefit stockholders. Laws aren’t written in stone.

Except that this always happens with any buyout or merger. Always. The reason being is that when one company buys out or merges with another there's now a whole lot of redundancy in personnel and it's expensive and unneeded redundancy. You don't need two sets of executive staff, CEOs, Presidents, VPs, and their associated staff. No need for separate accounting and HR personnel between the two companies, no need for separate legal teams. And the list goes on. This is not evil or corporate greed, this is business 101, managing expenses, and the biggest expense in just about any industry (including the military) is personnel. People cost money, lots of it.

 

[wayouteast]

My understanding of the problem, from what I've read about these cases - and which I'm happy to admit may be wrong, since I'm by no means an expert in company or contract law - is that a precedent could be established for a quasi-legal mechanism for allowing any company not to pay any creator ever again.

You simply sign a contract with a creator for some property using a shell company set up specifically for that purpose, then immediately 'buy' that company, and its property, transferring the rights to the IP but not the responsibilities for the payments to 'you', and... bingo... 'you' have acquired some 'thing' from which you can profit in perpetuity without ever having to pay anything to its originator.

That's the danger these cases exposes. Worst case, it only takes Disney or one of the other corporate behemoths to throw enough high priced lawyers at one of these cases to win and thereby establish precedent, and the whole concept of 'creators' rights' becomes null and void. Or at least badly damaged.

I don't really see how that can be justified, morally or 'legally'. But there we are.

 

[ScourgiousJinx]

When you get as big as Disney is of course you're going to be closely examined and every single decision you make is going to be scrutinized.

Protests are not automatically mob pitchforking especially when they have reason behind them. Not agreeing with the reasoning doesn't invalidate them.

 

[Moviefreak]

I think I may be missing something with this situation. I am confused how this is even a discussion? These comic creators worked for Marvel and were paid for their ideas, on a page by page basis. I am sure they had to sign a contract when working. So they were paid and that should be the end of it, no? When I worked for Disney in animation, we could pitch ideas for future film ideas, and by contract, they owned the ideas. That was accepted and understood upon signing the contract. Chris Sanders, for example, came up with the idea of Lilo & Stitch, and he pitched it. They pay you $10,000 if they take your idea to development, and they also give you credit as "Based upon an original idea by...". Chris was a great story teller, so Disney agreed to also let him co-direct, so that helped his career immensely. But outside of that, the multibillion dollar idea (with movies and merch) was now Disney's. I don't see Chris suing Disney for a cut, as he understood the terms in the contract.

Now I get the the property is coming up on expiration and could become public domain, but that is a different argument and fight. Much like Mickey Mouse, they were able to extend that, so I assume they can try to do that here, but I don't even get why the original artists are even in discussion here?

 

[signeddiamond]

Wayouteast,

In your hypothetical it would be considered fraud. At the end of the day there is no mechanism to magically make the obligation go away entirely. In the situation I outlined Disney would get the rights to the IPs but those royalties/ payouts stay with the previous owner of the IPs. In the case of Star Wars it would be saying that George Lucas has the responsibility to settle with the people he contracted with while the company was owned by him. (If that is in the contract of course). If companies were creating shell companies to dodge contracts then you can trace that. Companies need to be registered to someone and someone’s name is on the paperwork.

And Moviefreak pulls it right back to reality. This isn’t even the topic at hand here. The cases here had no stipulations of royalties in their contracts. Their family members did zero work. It’s just a grift from a scummy lawyer.

 

[cboath]

Exactly. I could run up a second mortgage on my house to install a pool and max out my credit cards to fund some other improvements on my home. What if I sell the home for a lot more and end up stiffing my bank on the loan and creditors on the cards.? A new owner of the property has taken possession on the house I built with that credit; are they now on the hook to pay that back? Hell no! Even though that debt was used to fund the property upkeep or addition, it is still MY debt. I think people are just looking for anything they can pin on Disney to get pitchforks out and protest them these days.

Difference is the debt was yours, not the company.

If i buy Exxon, i buy the company and everything good and bad that goes with it. The old owner can opt to pay some of the debt back, but essentially as I understand it they pay that to me, and i put it towards the debt.

Now, if your house took out the loan for the improvements, you'd have an apples to apples comparison. Also, when you sell that house, the bank will be asking for its collateral or full payment.

 

[JoeG]

I like how signeddiamond lays it all out in a simple, easy to understand way and then someone just comes along and says

Oh, internet. You so crazy.

 

[ScourgiousJinx]

Seriously? LOL.

 

[batguy]

What I know is that if I was in Disneys place I would not want to buy a bundle of loose ends. It’s a logistical nightmare especially on the scale of what they have been purchasing. Every purchase would stipulate that they settle up their existing contracts via settlement. If the creator refuses to settle almost all these contracts have a clause for arbitration where a third party would decide what the deal is. But hey, what do I know? Maybe Disney is really as reckless as people seem to think. I just haven't seen hard enough evidence.

Disney doesn't wanna deal with a bunch of contractual loose ends. So what?

I don't wanna clean my gutters and pay speeding tickets. I still have to.


Let's say a hypothetical company purchases the rights to use an IP, but they owe royalties to the creator as a condition of the contract. If the company later sells the rights to the IP, and no further royalties are paid out . . . I'd call that fraud. The company sold something (total control of the IP) that they didn't own. That unpaid royalty money is stolen property.

 

[Moviefreak]

1. Disney doesn't wanna deal with a bunch of contractual loose ends. So what?

2. I don't wanna clean my gutters and pay speeding tickets. I still have to.

3. Let's say a hypothetical company purchases the rights to use an IP, but they owe royalties to the creator as a condition of the contract. If the company later sells the rights to the IP, and no further royalties are paid out . . . I'd call that fraud. The company sold something (total control of the IP) that they didn't own. That unpaid royalty money is stolen property.

1. That's the thing, everyone is jumping on Disney as if they know, for fact, that their purchase contract had those loose ends rolled in. We don't know that. Their contract could have spelled out that any prior debts remain the responsibility of the seller.

2. So if you sell your car, your speeding tickets roll over to become the new owner's responsibility, right?

3. This statement is fiction and moot. Marvel never owed any royalties to the artists as a condition of their contract. Marvel has stated numerous times over the years that their contract was on a page by page payment rate, with no royalties. So where is the fraud? Marvel owned the property outright, and then sold it. They owed the artists nothing. Period. So there is no "unpaid royalty money" and no "stolen property".

 

[Lightning]

Their contract could have spelled out that any prior debts remain the responsibility of the seller

yes, prior debts. The Alan Dean Foster case alleges that they stopped paying royalties on newly generated income.

 

[signeddiamond]

yes, prior debts. The Alan Dean Foster case alleges that they stopped paying royalties on newly generated income.

Because it seems to be a touchy and confusing subject I will again preface this statement by saying that this is speculation on my part as much as assuming that Disney is guilty is speculation on the part of anyone else.

In this thread we are discussing prior debts and ongoing royalties (despite neither being what the actual case is about). Both of these things are covered by whatever contract was entered into by the IP holder and whoever they did work with. The contract can say "I owe you $500" or "I owe you $1 per book sold". Really it does not matter in the slightest if these are existing debts on the books or potential future debts when it comes to the sale of the IP. They are both considered liabilities.

If the purchaser does not want to acquire the liabilities then they don't need to. No law says that a exchange of property must be done whole or not at all. If you purchase a car from your neighbor but they haven't finished paying it off themselves you have a choice. You can either agree to the terms of the contract they signed with the dealership and deal with whatever potentially bad agreement they signed or you can tell the seller that you will buy the car once they complete their transaction with the dealership and you don't need to deal with that liability any longer. You can attempt to do this with any liability during a negotiation. If Disney does not want to pay royalties to people it never hired then they can ask for that and its the sellers job to go to the people they hired and pay them off so the deal is as clean as the buyer is comfortable with.

Its really wild to think that this is not a pretty obvious negotiation measure for most. Here is one last crazy hypothetical situation to maybe illustrate it.

You find a car for sale. Its your dream car and everything is absolutely perfect with it. In fact you think you could use it to make some cash on the side at car shows or something. You meet up with the seller and he says "Yeah I hate to see it go. One thing you should know is that I still owe the bodyshop $5000 on the fantastic work they did. Also there is this old guy who I made this deal with. He was the one who sold me the car and part of our deal was that I would let him drive it to BINGO the first sunday of each month. Of course now you would be responsible for paying back the shop and letting the old guy take the car out. That's cool right?'
At this point any normal person would say no. You would want them to pay off their debt to the body shop and talk to this old guy about how he wasn't going anywhere in the car anymore. If this man wants your money and wants to make this sale then those are your very reasonable conditions. Maybe the seller refuses to do either and then I guess the deal does not happen. Lets think positive and say the deal happens. The seller pays off the debt and agrees to handle the old guy. You drive off happy and the previous owner has a wallet full of cash. A few months later this old guy starts banging on your door. He's yelling at you because you haven't been lending him the car. He's outraged. How could you do this to a poor old man? Maybe he will go to the media about how this young hotshot in his shiny new car is breaking the promises made to a frail old man.

So whos at fault here? Can the car simply never be sold without the loose end of the old man? When the old man dies can his family bang on your door asking for rides? Is it fair for the buyer to be painted as the villian for just wanting a clean transaction and assuming that the previous owner would settle up with his promises?

Contracts and their contents are important. Those that say "I don't care", "Too bad for them", and "It doesn't matter what the contract says" are blessed to have never been on the butt end of legal disagreement involving contract or tort law.

 

[Lightning]

If the purchaser does not want to acquire the liabilities then they don't need to. No law says that a exchange of property must be done whole or not at all. If you purchase a car from your neighbor but they haven't finished paying it off themselves you have a choice. You can either agree to the terms of the contract they signed with the dealership and deal with whatever potentially bad agreement they signed or you can tell the seller that you will buy the car once they complete their transaction with the dealership and you don't need to deal with that liability any longer. You can attempt to do this with any liability during a negotiation. If Disney does not want to pay royalties to people it never hired then they can ask for that and its the sellers job to go to the people they hired and pay them off so the deal is as clean as the buyer is comfortable with.

I get what you are saying, but there's a wrinkle that's not covered in your analogy. Disney didn't buy Star Wars from Lucasfilm or Alien from Fox Studios. They bought Lucafilm and Fox Studios. Your suggestion seems to be that Alan Dean Foster (for example) needs to go to the company he originally signed the contract with and settle with them, as they still have the liabilities (in this hypothetical). But those companies are now part of Disney. Thus there's no place for those liabilites to reside except with Disney.

 

[Riceball]

I get what you are saying, but there's a wrinkle that's not covered in your analogy. Disney didn't buy Star Wars from Lucasfilm or Alien from Fox Studios. They bought Lucafilm and Fox Studios. Your suggestion seems to be that Alan Dean Foster (for example) needs to go to the company he originally signed the contract with and settle with them, as they still have the liabilities (in this hypothetical). But those companies are now part of Disney. Thus there's no place for those liabilites to reside except with Disney.

What people are trying to suggest is that it's not so cut and dry. It all has to do with what's in the language of the contract that Disney signed when they bought these companies. As people are suggesting, it's entirely possible that there is language in there that says Disney owes nobody anything once they sign on the dotted line and pay the respective companies. Or, there could be language in there about royalties and that Disney needs to continue paying them but the company being bought didn't think about that or forgot and didn't mention it to the Disney people during buyout negotiations. I can only imagine how many pages of legalese must be in these contracts and I think that it would be very easy for somebody to overlook something, esp. if it's buried deep in the contract papers under some sub-section and addendum in the contract.

 

[batguy]

1. That's the thing, everyone is jumping on Disney as if they know, for fact, that their purchase contract had those loose ends rolled in. We don't know that. Their contract could have spelled out that any prior debts remain the responsibility of the seller.

2. So if you sell your car, your speeding tickets roll over to become the new owner's responsibility, right?

3. This statement is fiction and moot. Marvel never owed any royalties to the artists as a condition of their contract. Marvel has stated numerous times over the years that their contract was on a page by page payment rate, with no royalties. So where is the fraud? Marvel owned the property outright, and then sold it. They owed the artists nothing. Period. So there is no "unpaid royalty money" and no "stolen property".

I was talking about hypothetical situations. I thought I made that pretty clear.

 

[batguy]

What people are trying to suggest is that it's not so cut and dry. It all has to do with what's in the language of the contract that Disney signed when they bought these companies. As people are suggesting, it's entirely possible that there is language in there that says Disney owes nobody anything once they sign on the dotted line and pay the respective companies. Or, there could be language in there about royalties and that Disney needs to continue paying them but the company being bought didn't think about that or forgot and didn't mention it to the Disney people during buyout negotiations. I can only imagine how many pages of legalese must be in these contracts and I think that it would be very easy for somebody to overlook something, esp. if it's buried deep in the contract papers under some sub-section and addendum in the contract.

I don't see the relevance. Not in terms of hypothetical legal principle.

Suppose I'm selling my house, and I include a clause in the contract that gives the buyer my neighbor's driveway as part of the deal. That contract clause doesn't amount to a hill of beans if I didn't own my neighbor's driveway at the time of the sale.

The buyer of my house doesn't own the driveway no matter how much he paid me for it. And what's more relevant - the buyer has absolutely zero power to force my neighbor to give up the driveway, period. The buyer might complain that he only bought my house because he wanted the neighboring driveway. But that wouldn't carry any legal weight.