This article is written by Suvigya Buch, pursuing Diploma in Intellectual Property, Media and Entertainment Laws from LawSikho. The article has been edited by Aatima Bhatia(Associate, LawSikho) and Smriti Katiyar (Associate, LawSikho).
The year of 2018 was an extremely tough year for comic book lovers all around the globe as in the month of May, 2018, Steve Ditko, an American comic book artist who was best known for his co-creation of Spiderman and Doctor Strange, passed away. Not long after in November of 2018, Stan Lee, the primary creative leader of Marvel and the co-creator of Spiderman also passed away. While these two iconic businessmen, but more importantly comic book authors may not exist on this planet in their physical form, but they left the world a far better place than they found it, as a result of their everlasting art. Despite this, there’s always the possibility of them making a comeback through the Multiverse!
While 2018 had several low moments for comic book fans, there was also reason to celebrate. 2018 saw the release of several Marvel movies, two of which made an unprecedented impact on not only the box office but also the standard of comic book filmmaking. The penultimate Avengers movie in the Infinity Saga, Avengers: Infinity War, released and snapped away all of its box office competition. Marvel also saw unlikely success in the form of Spider-Man: Into the Spider-Verse, an animated movie revolving around the friendly neighborhood web shooter, or as J. Jonah Jameson would refer to him, the crawling arachnid. Spider-Man appeared in both films, albeit in different capacities, and this officially made him Marvel’s highest grossing character ever.
However, the road to becoming the highest grossing on-screen character for a company as large as Marvel was filled with obstacles. While Spider-Man may be one of the most well-known characters in all of the popular culture, he has also been the most controversial and sought-after character when it comes to his Intellectual Property Rights (“IPR”). Marvel’s methodology for film adaptations of its comic-books was for a number of years, focused on licensing its characters to major studios. Marvel licensed many of its famous characters to production houses such as Hulk to Universal Pictures, and the X-Men and the Fantastic Four to 20th Century Fox. The conditions of such licenses often provided film studios with the permission to utilise Marvel’s IPR in their films in exchange for a fee or royalties, without Marvel having to spend money on the actual creation or production of the films. The webslinger was one of the characters that was licensed by Marvel several years ago and this paper aims at understanding and analysing the journey of Spider-Man through the years, under the lens of IPR.
“Spider-Man has taken to Court, Friend or Foe?”- J. Jonah Jameson, The Daily Bugle
The Spider-Man film franchise can be a little befuddling. Not only must fans grapple with an ever-growing number of films, some of which even date back to the 1970s, but they are constantly faced with the question of who owns Spider-Man. Since at least 1985, the rights to Spider-Man have been a source of contention. For several decades, there was a legal battle principally between Marvel and Metro-Goldwyn-Mayer, Inc., (“MGM”) with the letter asserting to have purchased film rights from companies that had since shut down. In the 1980s, Marvel sold the rights for Spider-Man movies to independent production houses three times, each of which went bankrupt subsequently. Marvel too filed for bankruptcy protection soon after. The television and home video rights to the film were licensed to Viacom Inc. and Sony, respectively, by one of those independent companies in turn for bankruptcy protection. However, MGM claimed it had purchased or inherited the sole movie rights from the deceased independent studios, putting Marvel, Sony, and Viacom in court. Due to the lack of funds for the legal battle against Marvel that could possibly cost them tens of millions of dollars, MGM decided to settle. The courts ultimately concluded that Marvel possessed the cinematic rights to Spider-Man in that case. Following that, in 1999, Marvel opted to license Spider-Man to Columbia Pictures Industries, Inc. (a subsidiary of Sony Picture Entertainment) on the condition that Sony was to produce a new Spider-Man movie every five years in order to be able to retain the rights to the character. Sony was given the right to make as many Spider-Man films as it wanted and to utilise Marvel’s IPR in exchange for royalties, all without having to spend any money on production or filming.
Since then, Sony released its first trilogy of Spider-Man movies directed by Sam Raimi in the years 2002, 2004, and 2007. However, during this period, Marvel decided to change its strategy. Marvel in 2007 was not in the best position, financially and content-wise. They were on the verge of bankruptcy and had little to no self-esteem, as said by Avi Arad. Their ideology was that they would rather create bad films because their idea didn’t work instead of them not being able to do anything about it. Marvel got a small amount of revenue through merchandising, and other such revenue sources. However, it was not enough, especially because they could have owned the rights to sell the DVDs. This is when they decided on starting Marvel Studios, a venture where they would create movies for the niche market and additionally earn money, retain all the intellectual property rights. This would also enable them to protect all their characters and movies under Copyright law. Marvel, however, did not have the right to produce films based on some of its own characters because those rights had already been sold to other companies. Marvel, for instance, would require Sony’s authorisation to develop a film based on Spider-Man.
Starting Marvel Studios and making Iron Man would be Marvel’s biggest gamble, because if the movie flopped, as a result of a financing deal for the movie, they would lose their rights to several characters such as Black Panther and Doctor Strange. However, the risk paid off, the movie grossed over $500 million and the world received its first-ever major superhero timeline. The Marvel Cinematic Universe (“MCU”) has since been pushing the limits of story-telling and engaging an audience. While they managed to win back the rights of Iron Man from New Line Cinema and Hulk from Universal Pictures, Spider-Man kept escaping their web of rights.
Disney’s spidey senses are tingling
Marvel Entertainment, the wing of Marvel that made movies, was acquired by Disney in 2009 and this gave Marvel movies the second wave of life. Marvel now had access to a lot more characters, however, Spidey was still tough to get a hold of. After the Raimi trilogy, Sony rebooted the Spidey universe and made two more films, The Amazing Spider-Man (2012) and The Amazing Spider-Man (2014) both of which were directed by Marc Webb. Both these movies proved to be the lowest-earning Spider-Man movies. Sony was trying to figure out how to halt a bleeding movie franchise whereas Marvel/Disney was trying to figure out how to develop films around characters to which it did not have rights. It was possible that the studios would renegotiate their contracts. A flurry of talks ensued. After the failure of the reboot, “The Amazing Spider-Man” series, Marvel and Sony first discussed a collaboration. It is safe to say that the discussion did not end well as Amy Pascal, Head of Sony Pictures, at one point, threw a sandwich at Kevin Feige.
However, Pascal and Feige struck a deal in 2015 the terms of which stated that Spider-Man may appear in Marvel films, and characters whose rights were retained by Marvel (such as Iron Man) might appear in Sony’s Spider-Man films. Sony would retain all fundamental rights to the Spider-Man films, including financing for, owning, and distributing them, as well as creative control over the final product.
Resultantly, Spider-Man could be a long stay in the MCU. In exchange for access to Spider-Man for inclusion in Marvel Studios’ extraordinarily profitable series of Avenger films, Marvel Studios would co-produce Sony’s Spider-Man flicks. What a lot of people don’t know is that the Spider-Man reboot which goes by the name of “Spider-Man: Homecoming” is still financed and distributed by Sony Pictures. Sony also accrued all the box office earnings; however, Marvel Studios was the creative lead and produced the film. Hence, Marvel Studios helped create the movie in the sense that the team chose the cast, director, script and by doing so not only supervised but also got to control the process of the movie, thereby setting its tone and showcasing it to the audience as a part of the extensive MCU.
Marvel still owns the merchandising rights to Spider-Man and with the release and success of “Spider-Man: Far From Home” and the recent success of the teaser trailer for the third movie in this series, “Spider-Man: No Way Home” it is evident that these movies have relentlessly continued to dominate the market.
While this partnership is going strong as of today, it faced a few roadblocks that had started forming in 2017 and came to the surface in 2019. Amy Pascal in 2017 voiced her concerns over the longevity of the relationship between Sony and Marvel with respect to Spider-Man. She said, “One of the things that I think is so amazing about this experience is that you don’t have studios deciding to work together to make a film very often. In fact, it may never happen again… after we do the sequel.”
Discussions between these entities came to a halt when it got down to a few important points such as the degree to which future Spider-Man films would be co-financed, whether this contract would apply to Spider-Man spin-offs not part of the MCU, and producer credits. Despite this, both companies came to an agreement and the audience is now being treated to a few more web slinger appearances on the big screen. This new contract enabled Spider-Man to stay in the MCU for at least one more feature in exchange for Marvel Studios co-producing another Tom Holland Spider-Man film which will be released on December 17, 2021.
Recently, beginning with its 2022 films, Disney and Sony Pictures have announced a multi-year “content licencing agreement” that will deliver new Sony theatrical productions to Disney-owned networks. The agreement also grants Disney the rights to several of Sony’s earlier movies, notably Spider-Man films, implying that films starring the web-slinger, which are conspicuously missing from Disney Plus’ Marvel film library, may someday find their way to the streaming platform.
Will the real owner please stand up?
It is therefore evident that Marvel Comics and/or Disney, its parent company own the rights to Spider-Man comics and have control over all his appearances in said comics. When Sony bought the movie rights to Spider-Man in 1998, they also got the Spider-Man merchandising rights, which turned out to be a very profitable source of revenue. While the movies generate a lot of money at the box office, the merchandising rights can (and frequently do) produce much more revenue.
When Sony needed funds in 2011, it decided to sell the merchandising rights back to Marvel. As a result, Sony presently just has the rights to make films; it no longer has a stake in the merchandising market. Sony’s Chief Financial Officer, Kenichiro Yoshida in a 2017 interview, said: “We had sold some assets of the studio, such as merchandising rights of Spider-Man, to raise short-term cash in exchange for long-term cash flow when the electronics units were struggling.” Hence, Marvel Comics and/or Disney also own all the rights to the Spider-Man merchandise and as a result, they derive revenue from every official Spider-Man t-shirt, bag, water bottle and so on. However, when it comes to Spidey in the film format, whether that be on the big screen or on an Over The Top (“OTT”) Streaming Service, it is done under the control and supervision of Sony Pictures as they own the rights to the Spider-Man movies.
Marvel’s strategy of copyrighting and licensing has worked largely in their favour even though there were problems in their initial days. Marvel has been able to create a universe that has trumped all its previous success and managed to overshadow its competition. This would not be possible without the help of legal instruments like copyright and trademarks that are largely known as Intellectual Property Rights. Marvel has undoubtedly reaped huge rewards from its licencing endeavours thanks to its strong IP assets. Because of its low-risk movie-licensing strategy, production companies bear all of the financial risks in generating the picture, while Marvel benefits from different marketing prospects. Spider-Man is and has been a prime example of how successful a single character can be not only when it comes to its profitability but also its significance in pop culture. Spider-Man has stood the test of time, which believe it or not, is tougher than defeating the Sinister Six all in one go. Spider-Man has over the years provided vital income to three different production houses and has become a mainstay at each of them. As various other companies and artists try to emulate the success of Marvel, through similar business structures, the importance given to Copyright law and character protection will see a constant rise. However, despite all the success, the biggest takeaway from this is the importance of managing one’s IP. Had Marvel never sold off the rights to their poster hero, they never would have had to go through so many legal procedures just to acquire rights over what was already theirs and lose millions of dollars in the process. Marvel’s move to sell off the rights to Spider-Man movies in exchange for a quick cash grab is a classic example of the lack of foresight that existed two decades ago and is prominent even today. The legal journey of Spider-Man and his film rights serves as a great learning experience and precedent for several creators and owners of IP. It is a classic example of how the loss of IP for one entity can prove to be one of the biggest assets for another, in this case, the former being Marvel and the latter, Sony.
Spreading awareness about IP management and enforcing the same to the highest possible extent is of utmost importance, especially when it comes to comic book characters. With basic awareness about the law of copyright and its correct application, the world may witness the success story of another visionary like Stan Lee or Kevin Fiege. However, in the foreseeable future, Marvel will continue to be the finest case study for why copyright and specifically character protection are crucial to any artist. Little did Uncle Ben know that he’s saying, “With great power comes great responsibility” would be applicable to both Peter and IP management.
- Micheal Hiltzik, Studio Rights to Spiderman Are Untangled, Los Angeles Times https://www.latimes.com/archives/la-xpm-1999-mar-02-fi-13115-story.html.
- Joanna Robinson, The Beginning of Marvel Studios, Marvel Looks Back at Iron Man- the Movie That Started It All, Vanity Fair https://www.vanityfair.com/hollywood/2017/11/marvel-looks-back-at-iron-man-the-movie-that-started-it-all
- Ben Fritz, The ‘Black Panther’ Movie Deal That Didn’t Get Made, The Wall Street Journal https://www.wsj.com/articles/the-black-panther-movie-deal-that-didnt-get-made-1518703200
- Gregory Wakeman, Will Marvel And Sony’s Partnership Last? Here’s What One Producer Says, CinemaBlend https://www.cinemablend.com/news/1641019/will-marvel-and-sonys-partnership-last-heres-what-one-producer-says
- Jay Peters, Disney inks a huge Sony deal to bring Spider-Man and other films to Disney Plus and Hulu, The Verge https://www.theverge.com/2021/4/21/22396430/disney-plus-sony-pictures-marvel-deal-spider-man
- Takashi Mochizuki, Sony Says It Won’t Sell Movie Unit Despite Nearly $1 Billion Write-Down, The Wall Street Journal https://www.wsj.com/articles/sony-slashes-profit-forecast-after-writing-down-nearly-1-billion-on-movie-unit-1486017798?tesla=y
Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skills.
LawSikho has created a telegram group for exchanging legal knowledge, referrals, and various opportunities. You can click on this link and join:
Follow us on Instagram and subscribe to our YouTube channel for more amazing legal content.