I'm getting deja vu here. I'm pretty sure we've had this argument before.
Though I work in real estate and not motion picture licensing, I can tell you that ambiguous contracts in my field are a big no no. If the terms of the agreement are not spelled in exacting details -and I very much doubt crossovers are covered - FOX and Disney/Marvel are going to have reopen the deal. A judge is not going to rule for one or the other party. They are going to tell them to put on their big boy pants and work it out. Just like they recently did with the X-Men TV deal.
As character crossovers were never intended in the original agreement - and have proven to be quite lucrative - Disney would be well within their rights to ask for a big piece of the crossover film nobody is asking for. So as far as I see that would kill the idea in the womb.
Well, just practically speaking, and perhaps I have this viewpoint because I am a litigator, if it is a matter of contractual interpretation and it does reach that point, a judge (or perhaps more likely an arbitrator, as I am guessing there is an arbitration agreement) would have to interpret the contract at some point if neither parties could reach an agreement.
Of course it would be preferable if all aspects were addressed in the contract. But being as it is very likely that crossovers are not, we have a contract that covers general film rights. So the question becomes, what is included in that? I'd say general film rights would cover whatever the industry standard of a superhero movie is. Considering that crossovers are now the industry norm, I think its covered.
Of course, then there is the question as to whether you would consider the industry standard at time of formation or present. Come to think of it, that is actually a fascinating legal question, a good law school case...I'm not quite sure that it has ever come up as I cannot think of a situation in which it would.
Obviously the idea of a contract is to effectuate the intent of the parties. The intent of the parties to be bound by the agreement can only exist at time of formation. So you'd think industry standard at time of formation would govern. However, is that really practical precedent? Especially in the ever evolving world of IPs and new formats and contexts in which IPs can be used?
I'm thinking back to how my mind worked to analyze this stuff during my clerkship (since we all know that the clerks do the real work
). If this came across my desk...I may very well have advised the judge to simply ascertain who the principle drafter was and rule against that party. Lord knows judges love to dodge the tough questions. Interpreting an ambiguity against a drafter is an easy canon of interpretation that lets the question be dodged with no real room to argue.
At any rate, perhaps I am getting overly academic. I tend to agree that this would ultimately be resolved through mediation and arbitration and likely result in some sort of profit sharing agreement or payout to Disney to avoid litigating it.
Although, if I were advising Disney, I may not agree to such a payout or agreement. I may want to litigate or go through with the binding arbitration. It was one thing with X-Men. Fox isn't going to let those rights revert. May as well make some money off of Fox having the rights. But with Fantastic Four, Disney's goal is pretty clear. It has been attempting to undermine the value of the Fantastic Four for awhile. Cancelling the comics, slowly phasing the characters out of marketing and crossover appearances...Disney is trying to cut down the value of the characters and minimize potential hype and profitability so as to disincentivize Fox from investing in another movie and ultimately putting Fox in a position in which the profitable thing to do would be to simply let the rights revert. So Disney may be incentivized to litigate to stall and further drive down the value of the franchise.
Keep in mind, Disney can afford years of litigation. Fox can't. And Fox has a clock. Disney doesn't.
Let's say for the sake of discussion that the rights revert in 10 years if no film is made. Come 2024, Fox says "you know what, its not really profitable to make another Fantastic Four movie and deal with the backlash and negative PR and probably end up losing money...so lets just do a crossover with X-Men." Along comes Disney's lawyers and they say "time out! No way!" Lawsuit commences. Disney has two options. Negotiate, reach a deal, take a cut. Or just drag it out for two or three years and wait for the rights to revert. It wouldn't be that hard to stretch litigation of this nature out for a few years and Fox would certainly be enjoined from attempting to make said crossover during litigation. At that point, Fox would have two choices: sit on the rights and helplessly watch as they revert or invest in and make a Fantastic Four movie out of spite.
The downside there is that Disney is opening itself up to tort liability and arguably dealing in bad faith. But never-the-less, the franchise has proven to be so unprofitable with Fox that the damages would be a drop in the frying pan (if said damages can be proven at all...future rights of a film franchise would be awfully speculative).
But again, I may be getting overly academic and I am definitely thinking like a litigator. But yeah, if Disney were my client and their goal is to devalue the franchise and run down the clock...I see no reason to settle in mediation or work something out.
