Twentieth Century Fox Film v. Marvel Enterprises
| Decision Date | 09 August 2001 |
| Docket Number | No. 01 CIV. 3017(AGS).,No. 01 CIV. 3016(AGS).,01 CIV. 3016(AGS).,01 CIV. 3017(AGS). |
| Citation | 155 F.Supp.2d 1 |
| Parties | TWENTIETH CENTURY FOX FILM CORPORATION, Plaintiff, v. MARVEL ENTERPRISES, INC., Tribune Entertainment Co., Fireworks Communications, Inc., and Fireworks Television (US) Inc., Defendants. Marvel Entertainment Group, Inc., Plaintiff, v. Twentieth Century Fox Film Corporation, Defendant. |
| Court | U.S. District Court — Southern District of New York |
Dale M. Cendali, O'Melveny & Myers LLP, New York City, for Plaintiff.
Jonathan D. Reichman, Dana Kaplan, Kenyon & Kenyon, New York City, for Defendant Marvel Enterprises, Inc.
Steven Rosenfeld, Ohrenstein & Brown, LLP, New York City, for Defendant Fireworks Communications, Inc. and Fireworks Television (US) Inc.
Gerald Singleton, Maura Wogan, Frankfurt Garbus Kurnit Klein & Selz, P.C., New York City, for Defendant Tribune Entertainment Co.
In this action, plaintiff alleges breach of contract, trademark infringement, copyright infringement and related claims arising out of a proposed television series that is currently being developed and produced by defendants. Before the Court is plaintiff's motion for preliminary injunction, and defendants' cross-motion to dismiss the Amended Complaint. For the reasons set forth below, both motions are granted in part and denied in part.
Plaintiff Twentieth Century Fox Film Corporation ("Fox"), a Delaware corporation with its principal place of business in Los Angeles, California, creates, produces, distributes and markets motion pictures and television shows throughout the world. (Fox Amend. Compl. ¶ 10.) Defendant Marvel Enterprises, Inc. ("Marvel"), a Delaware corporation with its principal place of business in New York, is purportedly the largest publisher of comic books in the United States, and creates, distributes, and markets comic books and related goods and merchandise throughout the world. (Id. ¶ 11; Defendants' Joint Memorandum in Opposition to Plaintiff's Motion for Preliminary Injunction ("Def.Mem.") at 5.) On occasion, Marvel also licenses to third parties the right to create, produce, distribute, and market motion pictures and television shows based on Marvel's comic book characters, concepts, themes, and storylines, and collaborates on such projects. (Fox Amend. Compl. ¶ 11.) As more fully explained below, Marvel licensed to Fox certain rights in its X-Men comic book series so that Fox could create, in association with Marvel, theatrical motion pictures based on such property. Marvel also has licensed certain rights to defendant Tribune Entertainment Co. ("Tribune") so that it may create, in cooperation with Marvel and defendants Fireworks Communications, Inc. and Fireworks Television (US), Inc. (collectively "Fireworks"), a live-action television series called Mutant X. Tribune, a Delaware corporation with its principal place of business in Los Angeles, California, creates, produces, distributes, and markets television shows throughout the United States; the Fireworks companies, which are subsidiaries of Can West Global Communications Corp., a Canadian media concern both have their principal places of business in California, and create, produce, distribute, and market television shows in the United States and Canada. (Id. ¶¶ 12-13.) Defendants Marvel, Tribune, and Fireworks are hereinafter collectively referred to as "defendants."
In 1963, Marvel began publishing a comic book series called X-Men. In a book entitled Ultimate X-Men, co-published by Marvel in 2000, the premise of the X-Men story is described as follows:
[The X-Men] were mutants: people born genetically different from the rest of humankind. Some people saw the rise of these superhuman mutants as the next step in human evolution. Many, however, regarded mutants as dangerous freaks, threatening the existence of the `normal' human race. The growing numbers of mutants needed a champion, and they found one in a visionary named Charles Xavier. A mutant himself, Xavier had a dream of a future in which `normal' humans and mutants would live together in peace and harmony. It was to make this dream a reality that Xavier created his organization of young mutants, the X-Men.
Peter Sanderson, Ultimate X-Men 9 (2000). The original six characters of the X-Men series were Professor Charles Xavier (aka Professor X), Scott Summers (aka Cyclops), Jean Grey/Marvel Girl (aka Phoenix), the Beast, Bobby Drake (aka Iceman), and Angel (aka Archangel). Also appearing in the original series were villains comprising the Brotherhood of Evil Mutants, in particular Magneto, the nemesis of Professor X, who believed that mutants should adopt violent and revolutionary means in order to claim their rightful place in society. As conceived by Marvel, the X-Men are "metaphors for minorities and other disenfranchised groups ... spanning from the Civil War to Auschwitz to the gay community." Furthermore, "the philosophical divide between Professor X and Magneto can be likened to that between Martin Luther King, Jr. and Malcolm X, in terms of the way each believes they should pursue their objectives for the mutant population." (Arad Decl. ¶ 7; see also Transcript of Oral Argument dated July 3, 2001 ("Tr.") at 59:24-25.)
Marvel has "create[d] many new titles spawned from the original X-Men series," which introduced new characters to the existing universe. (Arad Decl. ¶ 8.) Such additional titles include (i) Giant Size X-Men, released in 1975, (ii) The Uncanny X-Men, released in 1980, which supplanted the X-Men title and still continues, (iii) New Mutants, released in 1983, (iv) Alpha Fight, released in 1983, (v) X-Factor, released in 1986, (vi) Wolverine, released in 1988, (vii) Excalibur, released in 1988, (viii) X-Terminator, released in 1988, (ix) X-Force, released in 1991, (x) X-Men Unlimited, a series of short stories released in 1993, (xi) Generation X, released in 1994, (xii) X-Man, released in 1995, and (xiii) Mutant X, which was released in 1998 and ran through 2001. (Id.; Declaration of Joseph Witek, Ph.D. dated June 25, 2001 ("Witek Decl.") ¶¶ 23-25.) According to Marvel, it routinely registers copyrights in its comic books with the United States Copyright Office, and its character names and comic books with the United States Patent and Trademark Office. (Marvel Compl. ¶ 13.) It currently possesses at least ten federal trademark registrations for or incorporating its X-Men mark in connection with various goods and services, including its comic books, magazines, and illustrated stories.
In October 1993, Fox and Marvel entered into an agreement (the "1993 Agreement" or "Agreement") pursuant to which Marvel licensed to Fox the exclusive right to create, produce, distribute and market theatrical motion pictures based on the "X-Men Property" (or "Property"), which refers to the "X-Men comic book series." (1993 Agreement ¶ 6.) The scope of the grant of rights was broad, although the media within which they could be exploited (i.e. theatrical motion pictures) was narrow. Paragraph 6 of the Agreement, entitled "Granted Rights," states that Property to which Fox obtained rights included (i) certain characters specified in Exhibit A to the Agreement, (ii) the so-called "origin stories" of those characters appearing in the story or screenplay of the film, (iii) all individual storylines from individual comic books other than the origin stories, and, in a catch-all provision, (iv) "all other elements relating to the Property and the Characters." (Id.) (emphasis added). This paragraph also specifies that the rights "include the right to use the title (or subtitle or portion of the title) of the Property or any component of the Property as the title of any Picture or related exploitation." (Id.) In addition to the $1.6 million purchase price, (Declaration of Thomas Rothman dated June 26, 2001 ("Rothman Decl.") ¶ 10)2, and a percentage of gross proceeds, (1993 Agreement ¶¶ 4, 5), Marvel was able to reserve, in Paragraph 7 of the Agreement, certain rights for itself in connection with the films to be developed by Fox.3 Other ancillary rights, which define the scope of Fox's granted rights as applied to other media, are treated in Paragraph 8, the content of which is at the center of the parties' contractual dispute in this case. Paragraph 8, entitled "Other Rights," reads in pertinent part:
Marvel reserves all television rights [based on the Property] (other than television rights with respect to the Pictures produced hereunder). However, prior to the reversion (if any) of the Rights ... Marvel shall not, without Fox's prior written consent, which consent may be withheld in Fox's sole discretion, produce, distribute or exploit or authorize the production, distribution or exploitation of any live-action motion picture for free television exhibition, pay television exhibition, non-theatrical exhibition, or home video exhibition (on cassettes or discs) or any feature-length animated motion picture for non-theatrical exhibition or home video exhibition (on cassettes or discs).4
(1993 Agreement ¶ 8.) The possible reversion of rights to Marvel is addressed in Paragraph 9. In effect, this paragraph sets control dates by which Fox must create sequels by requiring reversion where "Subsequent Pictures" are not made within a certain time. (Id. ¶ 9.) The reversion dates set forth in this Paragraph were extended by an amendment to the Agreement signed by the parties on or about October 10, 2000.5 (See "X-Men II" Amendment/Extension ¶ 2(d).)
Paragraph 11 further defines the logistics of the production of Fox's films, by requiring that Marvel must approve: (i) the "fundamental elements" of the story, namely the...
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