Marvel Enterprises Inc. has escalated its royalty dispute with the Walt Disney Co. by suing to reclaim the copyrights for Spider-Man, the Incredible Hulk, the X-Men and other characters that appear on
(The Hollywood Reporter) -- Marvel Enterprises Inc. has escalated its royalty dispute with the Walt Disney Co. by suing to reclaim the copyrights for Spider-Man, the Incredible Hulk, the X-Men and other characters that appear on shows Disney inherited when it acquired the Fox Family Worldwide cable networks.
In a suit filed Oct. 29 in U.S. District Court in Los Angeles, Marvel requested that the court declare that Disney has no right to the character licenses based on a 2002 interpretation of copyright law by the Ninth Circuit Court of Appeals. That court held that an exclusive license holder, which in this case would be Fox and others, cannot transfer those rights without the owner's consent. Marvel claims that it did not consent to any transfer to Disney.
Marvel's suit builds on a case filed against Disney in July in Los Angeles Superior Court seeking $16 million in damages over the accounting of profits from the animated series that now appear on what Disney has rebranded ABC Family. Damages in the new case could be far more significant if the court finds that Disney infringed the copyrights by broadcasting shows since it bought Fox Family in 2001.
"The original lawsuit was focused on some fairly narrow accounting issues," Marvel attorney Carole Handler said, "and in this [new] one, we're reclaiming rights that are rightfully ours."
Disney officials said they were unable to comment because they had not seen the lawsuit.
The character licenses at issue were first granted to Fox Children's Network Inc. in 1992, followed by subsequent agreements with New World Entertainment Ltd. and Haim Saban.
"Although Marvel never consented to the successive assignment of its valuable intellectual property and, in particular, to the assignment to Disney, as copyright law requires, Disney is nonetheless continuing to exploit and to profit from its exploitation of the programs," Marvel's lawsuit states.
The new suit also incorporates Marvel's claims that Disney engaged in "deceptive accounting" on the financial reports related to these shows. In particular, Marvel alleges that its concern escalated when every participation statement issued by Disney stated that the animated series did not generate enough revenue to entitle Marvel to contingent compensation and that "we do not anticipate that this situation will change in the future."
In addition to seeking declaratory relief, the lawsuit seeks damages for unfair competition, unfair business practices and fraud.