A judge has tentatively agreed to grant a motion by Daily Variety and the Los Angeles Daily Journal to open the record in a licensing dispute between Marvel and Sony over Spider-Man that was filed in February under seal.
At a hearing Monday to address the issues raised by the media’s attorney, Bonnie Eskenazi of Greenberg Glusker Fields Claman Machtinger & Kinsella, L.A. Superior Court Judge Alexander Williams said, “I am of the view that this case must be opened to the public.” Indicating he had reviewed what had been filed under seal, Williams said, “I don’t believe anything in this record should be sealed from the public.” Williams is expected to issue a formal order Monday.
Marvel’s attorney, Carole Handler of O’Donnell & Schaeffer, has indicated that although the company was contractually bound to file under seal, it would not oppose unsealing the complaint. Sony, represented by Patricia Glaser of Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, opposes the unsealing.
Redacted papers provided to Daily Variety give a glimpse into why Williams referred to the dispute between Marvel and Sony as the “the mother of all contract suits.”
Marvel seeks to terminate its license agreement with Sony after the completion of “Spider-Man 2” and also filed claims against Sony for “cross-promoting” “Spider-Man” with other Sony features.
The dispute began last fall, when Sony became concerned that Marvel was using inappropriate accounting methods to deprive Sony of its share of payments from Marvel’s exploitation of the Spider-Man character. Sony then withheld $1.5 million from a participation payment made to Marvel and announced it would begin an audit in January.
From there, the dispute mushroomed into what Sony describes as an attempt by Marvel to force the unjustified renegotiation of the license agreement. According to Sony’s papers, Marvel executives repeatedly have expressed their unhappiness with the 1999 license agreement, particularly their participation in the film’s box office and home entertainment receipts.
Sony also alleges that despite an agreement to resolve their dispute privately, Marvel filed an inflammatory complaint with sensitive and confidential documents attached as exhibits to force Sony to renegotiate. The two documents Sony most wants to keep sealed are the license agreement itself and an internal marketing document. According to Sony’s papers, the document contains extremely detailed information about revenue projections and licensing rates for the first “Spider-Man” feature. Publicizing the information, Sony said, will jeopardize its ability to make licensing agreements on the sequel.
Given the tortured history of Spider-Man, it’s no surprise the property is back in litigation. Sony secured the film rights to the webbed one in 1999 in the settlement of a six-year litigation that involved MGM and Viacom as well as Sony and Marvel. A string of earlier claimants — Carolco, most prominently — went bankrupt before they ever brought Spider-Man to the screen.