Disney Looks to Protect “Avengers”, “Guardians of the Galaxy” Film Profits from Lawsuit by Technology Company

Matthew Soberman

Disney Looks to Protect “Avengers”, “Guardians of the Galaxy” Film Profits from Lawsuit by Technology Company

Disney is facing a lawsuit that could threaten profits from some of their biggest blockbusters in recent years, including Avengers: Age of Ultron, Guardians of the Galaxy, and the remake of Beauty and the Beast.

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Marvel’s Avengers: Age Of Ultron Ultron (voiced by James Spader) Ph: Film Frame ©Marvel 2015

According to The Hollywood Reporter, the suit has been filed by Rearden, a technology company claiming ownership of visual effects technology that captures an actor’s facial performance and processes the data into computer-generated heads of film characters. Rearden says that their software was stolen by digital effects house Digital Domain 3.0, who used it to create characters for studios including Disney, 20th Century Fox, and Paramount.

As THR’s Eriq Gardner reports, Rearden asserts that their software “was an original literary work of authorship fixed in a tangible medium of expression when stored on computer hard drive.” Their case is built on the argument that because these studios supervised their vendors (like Digital Domain 3.0), they’re partially responsible for the alleged violation. Previously, Rearden alleged that they owned the copyright on the program’s output, and that the work seen in the films was an “unauthorized derivative.”  U.S District Court Judge Jon Tigar rejected this idea, but allowed the portions on patent infringement and trademark violations to proceed.

As part of its defense, Disney claims that the special effects are not the only reason people come to see movies. According to Disney’s attorney Ginger Anders, a partner at Munger, Tolles, “Rearden has no evidence that consumers decided to see any of the Motion Pictures at issue here because a third-party vendor, months (or more) before the Motion Picture’s release, made temporary RAM copies of software that no consumer saw.” In a summary motion, Disney called the suit “mischief in the extreme,” adding, “there are limitless reasons why consumers pay to see any particular motion picture, including (among many others) stars, script, costumes, and music. It is highly speculative to say which of these factors lead people to pay to see a motion picture, but at least these are things that consumers actually see visually or hear aloud.”

Rearden could opt to just collect statutory damages, coming out to $150,000 per violation, though if they’re successful, they could collect some of the profits from these films. Disney attempted to dismiss this theory in the motion, saying “Rearden’s indirect profits claim confuses liability under patent and copyright law. Rearden’s claim is not based on DD3’s copying of the MOVA software into RAM through a routine computer operation, but on the use of that software, which is protected (if at all) by patent law. Had Rearden maintained and proved its patent claims, rather than dismissing them, Rearden might have been able to seek damages based on the use of the software. But Rearden’s remedies under patent law would not include claims to the Motion Pictures’ profits. Instead, damages would be limited to a reasonable royalty or perhaps amounts saved by DD3’s use of MOVA relative to the use of another software tool or no facial motion capture technology at all— which is presumably the reason Rearden dismissed its patent claims.”

They concluded by adding, “Rearden cannot proffer concrete, non-speculative evidence of a causal nexus between the temporary copies of MOVA software—which was not and could not be seen by consumers—and Motion Picture revenues. Even the use of the MOVA software (which is not protected by Rearden’s copyright) was a preliminary process that was superseded by numerous artistic and technical efforts and innumerable hours of additional work even to create a single CG character.”

Keep reading WDWNT for more on this ongoing story.

Featured Image: Film Frame