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Legal

Licensing Litigation

Hollywood Reporter reports that Disney “narrowly preserved” a win against author Royce Mathew in the 9th Circuit Court of Appeals over its Pirates of the Caribbean franchise. The legal battle has been on-and-off for over a decade, but the current controversy centers around a release Mathew signed when he withdrew a 2005 complaint alleging that Disney had used his work. Mathew attempted to rescind his release, but the court denied a trial on the issue—holding that because Disney “has continuously exploited” and “expended significant resources in developing” the Pirates franchise, it’s now too late to revisit. The dissent was skeptical about the extent of “economic prejudice” Disney would face, however, noting that the question was “fact-intensive” (and one that should not be dismissed before trial).

Iconix Brand Group files a complaint against Roc Nation (and owner Jay-Z), New Era, MLB Properties, Lids Sports Group, the San Francisco Giants, and other unnamed parties. Iconix alleges that the companies have undermined its own licensing agreements—at issue specifically are baseball caps from New Era sporting the Roc Nation logo in partnership with Roc Nation (MLB and the SF Giants have co-branding agreements with New Era). In 2007, Iconix had paid $204 million and was conveyed certain intellectual property from Roc Nation. Six years later, the two companies apparently got into a spat over the extent of the agreement (the complaint is heavily redacted at this point). Despite this, they continued to work together—Iconix reported $800 million in Roc Nation revenue for 2014 and 2015—until now, when Roc Nation (apparently) made a deal with New Era to produce the baseball caps and some apparel with the Roc Nation logo. Iconix claims it did not approve of, and is not being compensated for, the use of the brand, which it has heavily promoted. The complaint was filed in the U.S. District Court, Southern District of New York.

NBA prospect Lonzo Ball—one of the two inspirations behind his father LaVar Ball’s Big Baller Brand—is trying, and failing, to get a co-branding deal for footwear. Adidas, Nike, and Under Armour all backed out of the $1 billion deal thanks to the loud-mouthed antics of LaVar. According to Promo Marketing, George Raveling (Nike’s Director Global Basketball Sports Marketing) had earlier expressed skepticism the deal would go through, calling the 48-year-old “the worst thing to happen to basketball in the last hundred years.” DeVar told ESPN that he’s exploring partnering with Chinese brands or non-footwear businesses instead.

On the restaurant-licensing side, Forbes outlines the years-long drama between Benihana‘s founder’s family (who currently license a Benihana location in Hawaii) and brand’s owner (only in the U.S., Central America, South America, and the Caribbean—the family owns the rights to Benihana everywhere else worldwide). The story started with an unauthorized burger, and has gone on for almost five years. I’ve summarized the words of Bryan Graham, MD of RCO Licensing (Beanstalk’s auditing partner)—the moral of the story—when entering a licensing agreement, try to provide for a “middle ground” that can compensate the licensor for unauthorized licensee activity without an outright breach of contract (and avoid years of contentious litigation).

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