Marvel to Sony: “Bitch, He’s Mine!”

The Spectacular Stupid Lawsuit
Source: CNN.com

‘Spider-Man’ dispute unmasked

LOS ANGELES, California (Hollywood Reporter) — Sony Pictures and Marvel Entertainment on Monday inched closer to airing their “Spider-Man” dispute in open court, but issues regarding venue and how much confidential information about their partnership will be revealed were left unresolved by a judge.

As expected, Los Angeles Superior Court Judge Alexander Williams unsealed the lawsuit, which was filed under seal by Marvel in February. However, Williams denied a motion by third-party attorney Bonnie Eskenazi to make the contested sections of the suit, including the entire license agreement and sensitive marketing documents, part of the public record.

“I am cynical about trying to seal stuff — and this is a relatively straightforward contract dispute,” Williams said.

Marvel attorney Carole Handler, in a move that appeased Sony, said that she would refile the lawsuit after first removing the marketing documents and portions of the licensing agreement. A copy of Marvel’s new suit, expected to be filed Tuesday, was acquired by The Hollywood Reporter.

Character rights owner Marvel is seeking more than $50 million in damages as well as termination of the license agreement with Sony for “Spider-Man,” last year’s top-grossing film. Marvel accuses Sony of fraud and attempting to misappropriate the franchise for its own benefit.

According to Marvel, Sony paid it an upfront fee of $10 million in early 1999 for limited motion picture and television rights.

“(Sony) has played fast and loose with the license agreement and the merchandising agreement,” Marvel’s complaint says.

Sony has countered with its own suit, accusing Marvel of using inappropriate accounting to deprive Sony of certain merchandising revenue. Sony has separately demanded that Marvel explain to the court how sealed documents were allegedly leaked to the Internet gadfly Drudge Report.

By and large, Sony characterizes Marvel’s suit as a renegotiation ploy after repeatedly complaining to Sony that it was unhappy with terms of the license agreement.

“To achieve this goal, Marvel lodged its complaint in this action and threatened public disclosure of its meritless claims and confidential Sony Pictures business information,” Sony’s legal response said.

Much of Monday’s three-hour hearing centered on where the case will be sent if and when it goes to trial.

The license agreement calls for taking these kinds of disputes to a private judge, a procedure known as a reference. A reference would be overseen by a retired judge in a private office.

Throughout the hearing, Williams openly expressed his disdain for closed-door hearings, leading him to tentatively deny the motion for a reference regardless of the contractual provisions. But after a scorching argument by Sony attorney Patricia Glaser that told the judge that “he could not be more wrong” on the issue, Williams rescinded and decided to send the issue out for further briefing from the parties.

A hearing on the issue has been scheduled for May 20.

Glaser argued that a reference, which would remain open to the public, was part of their contract and that in certain instances was quicker and less expensive than a jury trial and could have procedures tailored to the specific needs of the parties.

Handler argued that because of the growing contentiousness surrounding the case, it would be better adjudicated in the court system under a knowledgeable judge. Handler also argued that it would not be as easy “for the public to have access to the case” if it were a reference.