Court papers shed light on Sony-Marvel feud

Court papers filed late last week in the still-sealed lawsuit between Marvel Enterprises and Sony Pictures Entertainment seeking termination of the Spider-Man license shed more light on the alleged fraud that Marvel claims induced it to sign its 1999 deal with Sony.

Marvel claims the studio never disclosed its intent to associate Spider-Man exclusively with Sony in the minds of retailers and that Sony never intended to use its sister corporations, such as Sony Electronics, to merchandise Spider-Man, as it promised Marvel it would.

Sony claims the deal was carefully negotiated by both sides, and Marvel is just looking for an excuse to renegotiate a better deal.

In a subplot spawned by the litigation, Sony is seeking contempt charges against Marvel, claiming it leaked sealed documents from the case to “The Drudge Report” on Wednesday.

“Nobody at Marvel had any contact with Drudge,” Marvel attorney Carole Handler said. “Besides,” Handler added, “Everything accurate in the Drudge story already had been reported by Variety (Daily Variety, April 8) and was available in redacted documents the court made public.” Court papers filed by Marvel make the same point.

But Sony attorney Patricia Glaser said the Drudge story was “an attempt by Marvel to spin the story and tarnish Sony as much as possible before the truth comes out. When their case is unsealed, it’s going to be ugly for them.”

The parties are due back in court today for what is expected to be the most significant hearing in the case so far. In response to a motion filed by Bonnie Eskenazi on behalf of Daily Variety and the Los Angeles Daily Journal, L.A. Superior Court Judge Alexander Williams is expected to unseal the complaint. Marvel filed under seal, saying it had a contractual obligation, but it does not oppose the unsealing. Sony has opposed unsealing.

At an earlier hearing, Williams tentatively ruled that the complaint should be public, but he has still not decided the status of two documents Sony most wants to protect — a marketing strategy document for the first “Spider-Man” and the specific financial terms of the license agreement.

Also on the table is whether Williams will send the case to a retired judge for trial. The proceeding, known as a reference, was agreed to by the parties, but Marvel claims that because of Sony’s alleged fraud, the entire contract, including the reference provision, is moot. Marvel now seeks a jury trial in L.A. Superior Court, over Sony’s objection.

Retired judges try cases in private offices, under the supervision of the court. They cannot empanel a jury. References have been ruled to be public proceedings.

As previously reported by Daily Variety, Marvel sued, under seal, in February to terminate its license agreement with Sony after the completion of the “Spider-Man” sequel claiming fraud and breach of contract by Sony. A dispute over Marvel’s share of merchandising revenues mushroomed after Sony withheld $1.5 million from a participation payment to Marvel and announced it would begin an audit.

The biggest box office hit of 2002, “Spider-Man” has been highly profitable for both companies and expectations are high for the sequel.

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