Marvel Entertainment is a success story in how to use licensing agreements in IP rights to leverage the commercial value of creative works. Marvel’s licensing strategy has enabled it to distribute its characters beyond two-dimensional comic books to the more lucrative media formats of film, television, and video games, as well as allowing for merchandising of toys and other products to further enhance their revenues.

Prior to the opening of its own studio, recently purchased by Disney, perhaps the most lucrative licensing by Marvel was in allowing the major studios to buy options to produce films based on Marvel’s superhero characters. This low-risk movie-licensing strategy meant that the studios carried all the financial risk in developing and producing films based upon Marvel’s characters, while Marvel were able to take advantage of multiple marketing opportunities with very little exposure to itself.

These licenses, while lucrative, have caused some problems though. While Marvel now has its own studio it is still bound by its pre-existing agreements and therefore cannot readily use its entire catalogue of well-known characters without some difficulty. For example, the Hulk character was licensed to Universal Pictures, which released a film in 2003, and Iron Man to New Line Cinema. If Marvel had not regained the rights to the Hulk or Iron Man characters in 2005, then it is unlikely that the highly successful Avengers franchise would have been produced.

Marvel and Metro-Goldwyn-Mayer Inc (MGM) were involved in lengthy litigation following a claim from MGM that they had acquired the film rights from a series of dissolved studios for the rights to Spider-Man. The court sided with Marvel and Columbia Pictures Industries Inc (who Marvel hoped to license Spider-Man to and which is now owned by Sony Pictures Entertainment).

The rights to the X-Men characters were licensed to 20th Century Fox (Fox), which they continue to maintain. Under the license with Fox all movie and television rights to all-things involving live action mutants are owned by the studio. This means that the X-Men characters cannot appear in what has been one of the most successful franchises in film, The Avengers. This also means that Marvel cannot use the word “mutant” in any of their upcoming films or in their new TV show Agents of S.H.I.E.L.D.

Due to this rights issue it is being reported that Marvel has now registered a new trademark, “registered gifted”, to describe all super powered individuals in order to circumvent this licensing issue. Marvel will likely use this in both Agents of S.H.I.E.L.D. and the next instalment of the Avengers franchise Avengers: Age of Ultron.

The licensing and protection of its IP rights has proved incredibly profitable to Marvel but in order to continue to leverage the commercial value of its superhero characters it may need to become more proactive with its IP strategy by clawing back its full catalogue of superheroes. Kevin Feige, Marvel Studios’ President said in an interview with HeyUGuys in 2012, “the contracts are all very specific, and if there is ever a time for them to revert, they will. But right now they are safely at those studios”. By clawing back its licensed rights from other studios and ensuring that they trademark the most lucrative of their products they will have complete control over the whole Marvel Universe and all the commercial opportunities that entails.

Meanwhile in other Marvel related news, a US District judge granted Disney’s motion to dismiss against Stan Lee Media Inc (SLMI) in a multi-billion dollar lawsuit over who owns the copyright to certain Marvel characters. SLMI filed the original complaint in 2012 seeking profits that Disney made from Marvel superhero movies and merchandise. Stan Lee had previously signed an agreement giving the rights to those characters to Marvel prior to being acquired by Disney in 2009. The judge agreed with Disney that the lawsuit was “completely frivolous” and held that SLMI is barred from pursuing the case further.

Disclaimer: The views expressed are those of the writer and this article does not constitute legal advice.

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