by JSEL | Sep 18, 2019 | Highlight
August was dominated by reports that Spider-Man would be leaving the Marvel Cinematic Universe following an impressive theatrical run of the newest movie “Spider-Man: Far From Home.” Spider-Man’s possible departure is due to Disney and Sony failing to reach an agreement on funding and revenue sharing for future Spider-Man films. The very concept of this kind of split raises wider questions regarding intellectual property law and the future of the entertainment industry.
Fictional characters are often protected by copyright laws. An author’s copyright over a character provides them with the exclusive right to use, adapt, or market the character as they see fit. Because the rights are exclusive, no one can use the character unless they are given explicit permission from the author. However, permission is not all or nothing, and authors can place conditions on how the character is used and how long the permission lasts. This kind of permission is referred to as a license and is what Marvel originally sold to Sony in 1999. At that time, Marvel sold Sony Pictures an exclusive license to make Spider-Man movies. Because the license was exclusive, Marvel lost the right to produce its own Spider-Man movies. Marvel had previously granted merchandise rights to Sony in 1995. Because of the agreement, Marvel received 5% box office revenue of Sony-produced Spider-Man pictures while Sony was entitled to 5% gross of all Marvel merchandise sales.
Sony’s Spider-Man license came with numerous conditions, including one stating that it would lose the license unless it releases a new Spider-Man movie every 5.75 years. Over the course of the last several years, Marvel and Sony have renegotiated the terms and conditions of the film license on numerous occasions. In 2015, Sony hit a snag and struggled to produce commercially successful Spider-Man movies. Marvel, which had been recently acquired by Disney, gained considerable bargaining power and negotiated a new deal. In this deal, Marvel would assist Sony in production of Spider-Man movies in exchange for 5% gross revenue and the right to use Spider-Man in Marvel produced movies (MCU), while Sony would retain creative control, marketing and distribution. Marvel was also able to re-acquire all merchandising rights, generating an estimated $200 million per year.
This resulting deal is a shared license agreement. A 2011 amendment made to the license agreement between Sony and Disney lays down the groundwork for what the deal entailed for Sony and Marvel. The leaked documents reveal a series of conditions that limit how Sony can depict Spider-Man, including requiring that the character be a heterosexual male and abstain from sexual relations before the age of 16. The leaked documents also provide a precise account of exactly which characters are covered by the license — including a test that could be used to determine whether future characters would be covered. Those terms provide some insight into how Sony and Disney approached the character-sharing question and accounted for the possibility that Spider-Man would join the MCU for just a limited time. The agreement states that Sony “holds exclusive film rights to all characters in the Spider-Man universe,” and refers to an explicit list of characters covered by the agreement. This list includes 627 covered characters (Black Cat/Felicia Hardy, Mysterio, Electro, etc.), 70 “Teams/Groups/Gangs” (The Sinister Six), 544 “Supporting Characters” (Uncle Ben, etc.), and 82 businesses (Oscorp, etc.).
Finally, the agreement contains provisions that apply to new characters, which are defined as “characters first appearing” after the agreement becomes effective. The agreement states that Sony has the rights to any new character who first appears in a work with “Spider,” “Spider-Man,” “Peter Parker,” or another Sony-exclusive character in its main title, and to new characters who shoot webs, have “Spider” in their name, or have a spider or spider web on their costume. While the specific terms of the leaked draft agreement are five years old and may not have ended up in the final agreement, it nevertheless provides a high-level understanding of how Marvel and Sony approached the license negotiations. It is clear that both studios had a plan for what they would do if their Spider-Man-sharing agreement broke down.
This shared license agreement initially seemed like a win-win: both companies would enjoy increased revenue at the box office in their respective productions through the shared-use of characters. However, in 2019, renegotiations collapsed and the exclusive film rights to Spider-Man reverted to Sony with Sony Pictures CEO stating that the “door on any potential deal is closed for now.” This may signal a permanent divorce between Sony and Disney.
Naz Khan is an Entertainment Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current LLM Candidate at Durham University.
Image: Miles Morales Spider Man, Pat Loika, CC BY 2.0.
by JSEL | Apr 26, 2019 | Highlight
The relationship between the Washington Nationals and Baltimore Orioles has been fraught ever since baseball returned to DC in 2005. Because the Nationals (formerly the Montreal Expos) would be tapping into a major chunk of the Orioles’ formerly exclusive television market, an unwieldly and tenuous deal was brokered: The Mid-Atlantic Sports Network (MASN). Since its creation, it has been the cause of much litigation.
The Orioles were given ninety percent ownership of MASN, and the Nationals the remaining ten, despite the fact that the media outlet would broadcast both teams’ games. Under the agreement, the Nationals would gain an additional percentage point of ownership each season until 2032, when they would be capped at a lowly 33% interest .
Also as part of the deal, MASN pays the same amount in rights fees to the Orioles and Nationals each season. On top of that, MASN distributes to the teams shares of the broadcast profits, most of which goes to the Orioles as MASN’s majority owners.
Because the Nationals get so little in terms of MASN profits, the team has been fighting for years for greater rights fees. In 2012, the dispute went before baseball’s Revenue Sharing Definitions Committee (RSDC), made up of representatives from the Pittsburgh Pirates, Tampa Bay Rays, and New York Mets. The three-person panel ruled that MASN owed the Nationals $298 million for the team’s 2012-16 television rights. The Orioles sued, and the New York Supreme Court Appellate Division sent the decision back to a reconstituted RSDC, this time made up of representatives from the Milwaukee Brewers, Seattle Mariners, and Toronto Blue Jays.
This reconstituted panel heard the case this past November and released its findings on Tuesday. An attorney from the Nationals immediately filed a motion in New York Supreme Court in Manhattan asking that the RSDC decision be confirmed and submitted under seal. Only time will tell which details, if any, are released to the public.
Thomas “Buddy” Bardenwerper is an Entertainment Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current first year student at Harvard Law School (Class of 2021).
Image: Royals at Orioles 5/8/18, Keith Allison, CC BY-SA 2.0.
by JSEL | Apr 26, 2019 | Highlight
Last week, a Los Angeles Superior Court judge denied a motion for summary judgement submitted by Stranger Things creators, Matt and Ross Duffer, in a breach of implied contract suit filed by independent filmmaker Charlie Kessler. Kessler claims the Duffers stole the idea for their show after he pitched his own project to the brothers at the 2014 Tribeca Film Festival.
With sky-high ratings, an accompanying book deal, and a PlayStation VR game in the works, Stranger Things has made its mark as the single most popular streaming show of all time. Based in small-town 80’s America, the series (originally titled The Montauk Experiments) focuses on the disappearance of a young boy and the dark forces that unfurl as his family and friends search for answers. What starts as a simple missing persons case develops into a supernatural mystery that includes top-secret government experiments, children with extraordinary psychic abilities, and a monster from another dimension. Though viewers have embraced the innovative premise of the Duffer Brothers’ creation, filmmaker Charlie Kessler alleges that the idea was taken directly from his short film, Montauk, as well as his accompanying feature-film screenplay, The Montauk Project. Like the Duffers’ story, Kessler’s work centers on the search for a missing boy, a battle against paranormal forces, and the discovery of an abandoned military base that conducts secret experiments on children.
It may seem odd that Kessler chose to bring an implied-contract claim, rather than a copyright infringement complaint. However, under federal copyright law, Kessler has no case. Ideas – even those that are finely detailed and significantly developed – cannot be copyrighted. This means that a film idea, and “any of the characters portrayed [with]in it” is largely free for the taking, regardless of who thought of it first. Under the contract claim, however, Kessler can (and does) allege that there was a “mutual [understanding]…that [the Duffers] would not disclose, use, and/or exploit” Kessler’s ideas. The Duffers aim to show that they independently created Stranger Things prior to meeting Kessler, a complete defense against the filmmaker’s claims in the state of California. (See Teich v. General Mills, 170 Cal.App.2nd 791, 799 (1959)).
While the Duffers’ motion for summary judgement cites emails from 2010, three years before Kessler’s alleged pitch, that detail their plans for a supernatural film project, Judge Michael L. stated that the brothers provided insufficient “verifying evidence of the originality of their idea,” raising several issues surrounding the ownership of original work. The emails directly reference central elements of Stranger Things, such as a protagonist who is “[a]bducted with a group of other psychically gifted…children,” a “[s]ecret underground research facility,” and the “opening up another dimension” that leads to a “creature…escap[ing].” Considering the specificity of these plot details, one must wonder: what doesconstitute sufficient, unrebutted evidence of the originality of a creative idea?
The answer to this question could have a serious impact on Hollywood’s creative circles and the manner in which artists develop and pitch their ideas. With the possibility of an implied contract breach stemming from standard mingling lurking on the horizon, industry movers may become more hesitant to hear casual pitches from relative unknowns. This, of course, could make it increasingly difficult for independent artists to break into the Hollywood sphere and secure financing for their projects. On the flipside, the protections Kessler seeks to establish may give emerging writers and directors some comfort that, should they manage to pitch their next big project to potential collaborators, sponsors, or producers, their work will be safe from copycats.
The trial, now with a May 7th start date, is set not only to provide insights into the development of Netflix’s runaway series, but may also serve as an indicator for how the entertainment industry as a whole could evolve to regulate the free exchange of creative ideas.
Matt Shields and Susannah Benjamin are Entertainment Highlight Contributors for the Harvard Journal of Sports and Entertainment Law and current first year students at Harvard Law School (Class of 2021).
Image: Lowtrucks, Stranger Things logo, CC BY-SA 4.0
by JSEL | Apr 23, 2019 | Highlight
Judge Edgardo Ramos for the Southern District of New York ruled that that actions of University of Arizona men’s basketball coach, Sean Miller, and Louisiana State University men’s basketball coach, Will Wade, are irrelevant to the upcoming college basketball bribery trial and will thus not have to testify. An audio from a wiretap of Wade allegedly discussing an offer to a recruit, believed to be LSU player Javonte Smart, will also not be permitted during the trial.
The coaches were subpoenaed for a trial involving sports agent Christian Dawkins and Adidas representative Merl Code over federal bribery and conspiracy charges. Federal prosecutors say Dawkins and Code paid college assistant coaches to direct their players towards them for professional representation.
Defense attorneys argued that testimony from Miller and Wade, in addition to audio evidence and recovered text messages, was necessary to show the state of mind Dawkins was operating under when he was accused of bribing assistant coaches. In regards to Miller, they argued that because of his alleged willingness to pay his players, he has more influence over players than his assistants.
The prosecutors argued, though, that a lot of people may be influencing players. While Judge Ramos agreed to grant the prosecutors’ motion to keep both coaches from testifying, he said the motions “are subject to being revisited depending on how the evidence at the trial plays out.”
Andrew Distell is a Sports Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current first year student at Harvard Law School (Class of 2021).
Image: Jeff Turner, USAirwaysCenter-2008NCAAWestRegional, CC BY 2.0
by JSEL | Apr 19, 2019 | Highlight
As of April 15th, the European Union officially approved a controversial new Copyright Directive that has left members of the art and tech worlds fiercely divided. The Directive, which was narrowly approved by the European Parliament in a 348 to 274 vote last month, has now been given the green light by 19 out of the 28 EU member states, which leaves EU members with 24 months to comply with the new measure.
Under fire is Article 17 of the Directive (previously referred to as Article 13), which renders platforms like YouTube, Facebook, and Instagram liable for the misuse of any copyrighted material that users upload to their sites. As liability shifts from individual users to the tech giants themselves, platforms will need to either buy licenses to the copyrighted content, remove the content entirely, or prevent copyrighted material from being posted in the first place. Prominent artists like Paul McCartney and Björn Ulvaeus are in support of the Directive, asserting that YouTube and its peers are unfairly profiting off of creative labor it has not paid for, feeding a cycle of IP theft. To put this complaint into context, a user may currently upload a video with an unauthorized background song. users flock to the video, platforms profit from the increased traffic generated by the appropriated content. while the artist, who bears the onus of reporting the infringement, receives nothing.
Though the Directive may seem like a much-needed response to artistic exploitation, platform spokespersons, emerging artists, and notable tech figures like Jimmy Wales and Tim Berners-Lee are more concerned about its chilling effect on creative expression. This concern is not unfounded. The Directive will almost inevitably cause platforms to utilize automatic filters to police new uploads—filters that are notoriously ill-equipped to discern between fair use and infringing content (take YouTube’s $100 million dollar Content ID system as an example). This means that derivative art forms such as memes, parodies, and music mixes could be under threat—a fear which is particularly relevant in the internet age, where creative appropriation is not only commonplace, but celebrated.
In addition to the censorship issue, the Directive may further aggravate the divide between prominent artists and those struggling to make a name for themselves in the industry. As YouTube CEO Susan Wojcicki points out, platforms may not have the financial and technological resources available to comply with the Directive’s provisions; consequently, they may end up limiting content providers to a select number of large, vetted companies because smaller, individual providers are too difficult to monitor effectively. This would only further the already powerful monopoly that brand-name artists have over the creative industry, making it even more difficult for rising artists to gain exposure for their work.
Not only does the Directive spell out issues for artists, it also means trouble for the platform managers. Because the EU requires each nation adopting the Directive to formulate its own unique interpretation of the measure’s language—which critics call “maddeningly vague” — tech companies may have to devote resources to develop customized mechanisms and procedures to fit numerous regulatory regimes. As “#SaveYourInternet” protests carry on in Berlin, Poland, Austria, and Portugal, questions remain: who is the biggest loser here, the artists or the platforms, and is the Directive championing creativity, or destroying it?
Matt Shields and Susannah Benjamin are Entertainment Highlight Contributors for the Harvard Journal of Sports and Entertainment Law and current first year students at Harvard Law School (Class of 2021).
Image: ClkerFreeVectorImages, Copyright-40632, CC0 1.0
by JSEL | Apr 16, 2019 | Highlight
Baseball is the national pastime of both the United States and Cuba, but players from the Caribbean nation who dream of playing in the Major Leagues have only two options: defect during international tournaments or embark on maritime journeys at the mercy of human smugglers. Both options are extremely dangerous and preclude any chance of return to the players’ homeland.
Toward the end of the Obama presidency, however, an agreement was reached that would have removed the need for players to attempt smuggler-aided escapes from Cuba to fulfill their goal of playing in the U.S. Under the agreement, players would have been permitted to “to retain their Cuban citizenship, travel to the U.S. with their families and return to their homeland in the off-season.” In exchange, MLB clubs that signed Cuban players would have paid up to 25% of the signing bonus to the Cuban Baseball Federation.
Cuba had released the list of the first group of 34 MLB-eligible players.
The U.S. embargo against Cuba makes it illegal for Cuba to enter into financial arrangements with a U.S. entity unless the arrangement is licensed by the Treasury Department. But the Obama administration had determined, with support from MLB, that the Federation was “itself not part of the Cuban government,” allowing MLB to legally negotiate with the Federation.
In a major blow to MLB, the Treasury Department recently backed away from the previous administration’s position regarding the Federation and rescinded the landmark agreement. Thus, MLB and its member clubs would be violating the embargo by paying commissions to the Federation. According to National Security Council spokesman Garrett Marquis, the Obama-sponsored agreement would have “institutionalize[d] a system by which a Cuban government entity garnishes the wages of hard-working athletes who simply seek to live and compete in a free society.”
The last-minute revocation seems to be directly related to Cuba’s involvement in Venezuela. According to National Security Advisor John Bolton, “America’s national pastime should not enable the Cuban regime’s support for Maduro in Venezuela.”
In response to the sudden turn of events, MLB Vice President Michael Teevan stated, “We stand by the goal of the agreement, which is to end the human trafficking of baseball players from Cuba.”
Thomas “Buddy” Bardenwerper and Andrew Distell are Entertainment and Sports Highlight Contributors for the Harvard Journal of Sports and Entertainment Law and current first year students at Harvard Law School (Class of 2021).
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