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Disney Facing VFX Firm's Injunction Bid on Three Blockbuster Films (hollywoodreporter.com) 95

From a report: 'Guardians of the Galaxy,' 'Avengers: Age of Ultron' and 'Beauty and the Beast' are now under the microscope for use of facial capture technology. Upping the stakes over a technology called "performance motion capture," Rearden LLC is going after The Walt Disney Company in a lawsuit filed this week. The plaintiff, a firm incubated by Silicon Valley entrepreneur Steve Perlman, is demanding an injunction prohibiting Disney from distributing Guardians of the Galaxy, Avengers: Age of Ultron and Beauty and the Beast. The new lawsuit comes a year after Rearden scored a startling injunction against two Chinese firms that purchased allegedly stolen technology known as MOVA, which was being licensed by Digital Domain 3.0. At the time, some legal observers were reading the ruling as notice to Hollywood studios that the facial motion capture technology was out of play. According to Rearden's latest lawsuit in California federal court, Disney didn't listen. "Disney used the stolen MOVA Contour systems and methods, made derivative works, and reproduced, distributed, performed, and displayed at least Guardians of the Galaxy, Avengers: Age of Ultron, and Beauty and the Beast, in knowing or willfully blind violation of Rearden Mova LLC's intellectual property rights."
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Disney Facing VFX Firm's Injunction Bid on Three Blockbuster Films

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  • Messed up IP laws (Score:5, Insightful)

    by Anonymous Coward on Friday July 21, 2017 @10:46AM (#54852465)
    America deserves what it's going to get. Since when does using a program grant the author of said programs rights on works produced by said program? Sure, maybe Disney is liable for using unlicensed copy(ies), in which case they need to be penalized for doing so - according to the number of unlicensed copies used. However the author does not automatically acquire rights on original works produced with said program. The author of a word processor does not get royalties on the book you wrote, the owner of a paint gun does not get royalties on the building you painted and the inventor of a car does not get a share of the prize you won in the stock car race. Of course in America, everything is different. So I expect American courts to fuck up IP law even further, so that the whole world can be fucked into one party suing the other party forever and nothing ever getting done.
    • by Anonymous Coward on Friday July 21, 2017 @10:50AM (#54852489)

      But Disney MADE those IP laws so dumb. They should reap the whirlwind.

    • Re: (Score:3, Insightful)

      by thaylin ( 555395 )

      Who says they are claiming any ownership rights? They are getting an injunction from them using their technologies to create the film, until they are paid for their use of the technologies. this is no different then you creating a processor and me putting putting it in computers and selling those computers.

      I am typically critical of IP laws but this seems pretty cut and dry.

      To use your analogy:

      "The author of a word processor does not get royalties on the book you wrote"

      If the word processor application was

      • Re:Messed up IP laws (Score:5, Interesting)

        by jedidiah ( 1196 ) on Friday July 21, 2017 @10:58AM (#54852533) Homepage

        No. They are trying to hijack the ownership rights of works created using software. If this passes legal muster, the implications are very ugly. Like "copyrights on APIs" kind of ugly.

        • by Dunbal ( 464142 ) *
          I lent my pen to Bob and you stole the pen from Bob now every check you sign with that pen belongs to me. Yup, makes sense (shaking my head)...
          • by Joviex ( 976416 )

            I lent my pen to Bob and you stole the pen from Bob now every check you sign with that pen belongs to me. Yup, makes sense (shaking my head)...

            This is an ugly analogy that fails to pass the smell test.

            They didnt steal a product that ANYONE CAN BUY IN A STORE FOR 10 CENTS.

            They stole tech, proprietary, not a world-wide distributed PEN.

            And they KNEW they did.

            Knowing is not just half the battle, its the whole intent.

        • by Daetrin ( 576516 )
          Are they? IANAL, but my understanding is that one of the intent of injunctions is to get companies to pay legal expenses in some way related to the thing the injunction is against. It doesn't _necessarily_ claim that Rearden owns a portion of the films, it may only be to prevent Disney from continuing to profit from them until they have paid the fees they should have originally paid to Rearden for the use of the software, plus some kind of legal penalty (especially if the violation is egregious as Rearden c
        • by Registered Coward v2 ( 447531 ) on Friday July 21, 2017 @12:02PM (#54852977)

          No. They are trying to hijack the ownership rights of works created using software. If this passes legal muster, the implications are very ugly. Like "copyrights on APIs" kind of ugly.

          Not really. They are saying Disney used a stolen device to produce those works and thus they are not entitled to distribute any of the resulting products. They don't claim to own the product, just that Disney should not be allowed to benefit from their actions until the issue is resolved. To use a car analogy, If I get a sale Ford fender stamping machine and started to sell fenders Ford would get an injunction to stop that. Just because this is a software product doesn't make the idea any different.

          • by Qzukk ( 229616 )

            they are not entitled to distribute any of the resulting products

            If I steal a hammer and use it to build a house, the extent of punishment for stealing the hammer is a year or so in jail and/or paying for the hammer plus a fine. Home Depot can't tear down the house or stop people from living in it.

            If I get a sale Ford fender stamping machine and started to sell fenders

            Not sure what exactly you're trying to say here, but you're describing every third party aftermarket part maker ever. Unless you are stampi

            • If I get a sale Ford fender stamping machine and started to sell fenders

              Not sure what exactly you're trying to say here, but you're describing every third party aftermarket part maker ever. Unless you are stamping "Ford" onto the fender, then you're violating trademark law.

              I'm saying if someone stole (I just saw autocorrect turned my misspelling of stolen into sale and hence the confusion) Ford's stamping machine and you used to to make parts Ford could get an injunction stopping the sale of those parts. I realize it is legal to make aftermarket parts, using your own technolog

              • The vehicles in question test for the presence of the Ford trademark, and reject the bumper if the trademark cannot be found.

            • by Joviex ( 976416 )

              they are not entitled to distribute any of the resulting products

              If I steal a hammer and use it to build a house, the extent of punishment for stealing the hammer is a year or so in jail and/or paying for the hammer plus a fine. Home Depot can't tear down the house or stop people from living in it.

              You also cannot compare a widely used, generic tool i.e. hammer with something that is unique, i.e. proprietary software, that is not easy to access or available to joe public, thus rendering your cute analogy moot.

              Disney stole. They knew they stole. They made the IP laws around this very topic. They deserve everything they get.

            • by Rolgar ( 556636 )

              But in this case, (if the MPAA's traditional argument is followed) they can cut off your access to the internet and fine you thousands of times the economic impact of the offence for something that's not actually theft.

              For a company making a movie, the equivalent in this case would be being locked out of theaters and BILLIONS in fines.

              I'm usually a live and let live kind of guy, but when somebody abuses the court system, using a high quantity of lawyers and delaying tactics to break opponents who have no ch

          • If you get a cheap used Ford fender stamping die, you are well within your legal rights to use it (along with your own stamping machine) to make sloppy-ass new fenders from that worn-out die. You're not free to use the other die that they use to stamp their logo onto the fender without their permission, because of trademark and copyright law, but you're explicitly allowed to make copies of automobile parts so long as they are not protected by patent and if they sell you the die, then the die is yours.

            • If you get a cheap used Ford fender stamping die, you are well within your legal rights to use it (along with your own stamping machine) to make sloppy-ass new fenders from that worn-out die. You're not free to use the other die that they use to stamp their logo onto the fender without their permission, because of trademark and copyright law, but you're explicitly allowed to make copies of automobile parts so long as they are not protected by patent and if they sell you the die, then the die is yours.

              Correct, but in this case tehy apparently stole the die and machine; and used the patented and copyrighted technology as well.

              • Correct, but in this case tehy apparently stole the die and machine; and used the patented and copyrighted technology as well.

                If anyone can buy it, then it's easy to figure out what the remedy is. If you can only license it, then the situation becomes more complicated. Which is the case for this software?

                • Correct, but in this case tehy apparently stole the die and machine; and used the patented and copyrighted technology as well.

                  If anyone can buy it, then it's easy to figure out what the remedy is. If you can only license it, then the situation becomes more complicated. Which is the case for this software?

                  Who knows. From various articles this appears to be a complicated situation involving some major figures as well as a bunch of off shore companies.

        • by Gadget_Guy ( 627405 ) on Friday July 21, 2017 @12:26PM (#54853135)

          They are trying to hijack the ownership rights of works created using software.

          Just repeating the claim doesn't make it right. Even if the injunction succeeds and monetary damages are awarded, the ownership of the films will still be in the clutches of Disney. Disney owns the films, it is just that they won't be able to distribute them (temporarily).

          If this passes legal muster, the implications are very ugly. Like "copyrights on APIs" kind of ugly.

          No, this isn't a precedent-setting case. It is quite normal for injunctions preventing the sale of offending products to be sought during legal cases.

    • Re: (Score:3, Informative)

      by Anonymous Coward

      There is no such thing as IP law. There are copyright, patents and trademark laws. Which is it? The 3 of these laws have nothing to do with each other.

      • by guruevi ( 827432 ) <evi@ev c i r c u i t s . com> on Friday July 21, 2017 @11:16AM (#54852629) Homepage

        There is also contract law. If the contract between two businesses states that the company should get royalties or attribution for works produced by the software, then it's entirely possible that they are due royalties and an injunction against further distribution/sales would be possible.

        This is entirely possible under e.g. Creative Commons. Let's say you license something under Creative Commons with Attribution and Disney uses your work without attribution, you would have the right to ask a judge to pull all media (DVD, BluRay etc) and rework it so they put your name in the credits.

        • by Dunbal ( 464142 ) *

          If the contract between two businesses states that the company should get royalties or attribution for works produced by the software, then it's entirely possible that they are due royalties

          You can't have a contract with someone and hope to enforce that contract on the 3rd party. Otherwise let's you and me sign a contract right now saying that any money earned by any of your neighbors is mine forever. Rearden LLC had a licensing agreement with one or more Chinese firms. Disney might have "borrowed" software from said Chinese firms. Said Chinese firms might even be liable TO DISNEY for not warning Disney about their arrangement with Rearden LLC. Disney never made any arrangements with Rearden L

          • If the contract between two businesses states that the company should get royalties or attribution for works produced by the software, then it's entirely possible that they are due royalties

            You can't have a contract with someone and hope to enforce that contract on the 3rd party. Otherwise let's you and me sign a contract right now saying that any money earned by any of your neighbors is mine forever. Rearden LLC had a licensing agreement with one or more Chinese firms. Disney might have "borrowed" software from said Chinese firms. Said Chinese firms might even be liable TO DISNEY for not warning Disney about their arrangement with Rearden LLC. Disney never made any arrangements with Rearden LLC. Rearden LLC can go after the Chinese firms to try to enforce said contract. GOOD LUCK enforcing it with Disney.

            Except Rearden is claiming Disney knew the machine may have been stolen, based on previous contracts with Reardon, and still used it; so they should have been aware of the contractual agreements and thus acted in bad faith.

            • by Dunbal ( 464142 ) *
              Still doesn't give Rearden a cut of Disney's movie income. How much is a license for the software? OK. We'll pay that. Sorry.
              • by MobyDisk ( 75490 )

                There are two problems here. The first is your question about the license cost.

                How much is a license for the software?

                What if the license is based on royalty payments? You can't let the infringer get around the royalty payment just because they pirated it. Then you would have companies going "$1 per copy, no way! I can pirate it, then just pay a fixed $500 to avoid the royalty, yay!"

                The second problem is that, if Disney did indeed know that they had "pirated" the software, then there can be punitive damages. That means that if the license s

          • by msauve ( 701917 ) on Friday July 21, 2017 @12:43PM (#54853225)
            "You can't have a contract with someone and hope to enforce that contract on the 3rd party. "

            They don't need to. It's a case of infringement. If I have the patent to a process and equipment to implement that process, you might contract for a license limited to using that process and equipment to produce your own products.

            If a third party borrows or steals that equipment from you and makes use of it without a license, they are infringing and any product they produce with it is tainted.
            • by Dunbal ( 464142 ) *

              . If I have the patent to a process and equipment to implement that process

              While I'm not an attorney, I seem to recall that software patents are MIGHTY SPECIFIC. You can't patent a "process" and all those claims that just add "on a computer" or "on a mobile phone" to older, expired patents have already been tested in court and found to be hogwash. You might be able to patent a specific algorithm. They'd have to demonstrate that the software used the same algorithm.

              • The USPTO has granted software patents that look awful general to me, although the courts have been stomping on that to some extent. Rearden is claiming that Disney illegally infringed on their patents in the production of three (and perhaps more) movies. Presumably they have some way to show that, and the court will decide.

              • by msauve ( 701917 )
                You're referring to the ability to take an existing process, and add a simple "on a computer" to it to create a new patent.

                That clearly doesn't apply here - unless you can point to some prior art which does motion capture/CGI without a computer.

                Process patents are well established as legitimate.

                You can certainly disagree with all intellectual property law - there are legitimate arguments on either side - but this is not a case of "on a computer."
      • There is no such thing as IP law.

        The liability limitation part of the Communications Decency Act, codified as 47 USC 230 [cornell.edu], states in part: "Nothing in this section shall be construed to limit or expand any law pertaining to intellectual property." Interestingly enough, it defines "Internet" but not "intellectual property", which I assume it leaves up to the federal court system to define.

        There are copyright, patents and trademark laws. Which is it?

        All of the above. From the featured article: "Now, Rearden is now bringing patent, copyright and trademark claims against Disney."

    • by MobyDisk ( 75490 )

      The company is not claiming they have rights on those works. They are asking for a temporary injunction until the case is resolved. Their claim is that Disney should have known that the software was not legally purchased, which makes us have less sympathy for Disney here. If it was a simple licensing dispute, an injunction might seem like overkill. But if Disney knew of it, the injunction is a way of saying "You can't continue to profit from this until you resolve the dispute, since you knew you were vi

    • No, this is just another in a long line of examples that software is not, nor has it ever been, patentable (based on the requirements for patents), regardless of what the USPTO says. Software should and must eventually be reverted to the realm of copyright. When this will happen is anyone's guess, but the sooner it happens, the better for us all...

      • Courts have upheld software patents, so they are legal. Rearden claims copyright and trademark infringement also.

        • I understand that old men with no clue have upheld software patents, but my argument is based around the plain language reading of the law that defines what can be patented. The law requires that only processes, machines, articles of manufacture, and compositions of matter can be patented. Software does not fall under one of these categories... http://www.bitlaw.com/patent/r... [bitlaw.com]

          Most legal scholars agree there is a strong argument against any software being granted a patent because there is no physicality

          • Processes can include software, and they're patentable. I understand that software patents have some boilerplate language to make them legal, and I also believe that some innovations in software should be patentable (the spreadsheet is an example).

            I agree that the laws should be changed, and probably won't be.

  • by rsilvergun ( 571051 ) on Friday July 21, 2017 @10:49AM (#54852483)
    move outside the reach of copyright and film film film.
  • Karma (Score:5, Interesting)

    by imrahilj ( 3553503 ) on Friday July 21, 2017 @11:17AM (#54852639)
    Is it wrong that I feel amused that this is happening to Disney, after all Disney has done to ruin copyright law?
    • by Anonymous Coward

      Yeah, this sure would be jacked-up copyright law.

      "Disney used the stolen MOVA Contour systems and methods, made derivative works..."

      If even the plaintiff's lawyers don't understand what a derivative work is, what hope is there for courts to get any of this right?

      Quick primer: a derivative work is a new work that derives from the content of a previous work- a translation, a sequel, a tv adaptation, etc. It is emphatically not something that attaches to the method of production. Recording my movie's sound w

      • In many cases, a finished product will have parts that are patented or copyrighted. Gnu's gcc leaves copyrighted code in the runtime, and that (and glibc) come with special licenses that make it legal to use gcc and glibc to create non-GPLed software.

        There's also the claim that Disney knowingly and illegally used Rearden technology to profit, and may not profit further from the illegal action until the situation is resolved. That's actually pretty standard.

    • by Megane ( 129182 )
      I'm sure we'll be seeing them sponsor a law to shorten the length of patents any day now.
    • Is it wrong that I feel amused that this is happening to Disney, after all Disney has done to ruin copyright law?

      It's schadenfreude, and that is a perfectly legitimate form of entertainment.

  • complicated... (Score:5, Interesting)

    by Goldsmith ( 561202 ) on Friday July 21, 2017 @11:21AM (#54852659)

    The Hollywood Reporter has done a series of good articles on this... worth searching through what's been reported over the last year, it's amazing. There's a mysteriously killed Chinese billionaire, a Silicon Valley inventor giving away his IP because he thinks it's worthless (and it was worthless until the Oscar won by the guys using it), and a ton of extremely shady lawyers.

    Both Perlman and LaSalle have been screwed over here, and they both deserve some of the blame for this. Neither one appears to have understood how to commercialize the technology. They were good friends, but they were not able to separate the ups and downs of friendship from their business relationship.

    • Re:complicated... (Score:5, Insightful)

      by Zontar_Thing_From_Ve ( 949321 ) on Friday July 21, 2017 @11:57AM (#54852923)

      Both Perlman and LaSalle have been screwed over here, and they both deserve some of the blame for this. Neither one appears to have understood how to commercialize the technology. They were good friends, but they were not able to separate the ups and downs of friendship from their business relationship.

      Thanks for that info that the Hollywood Reporter has a series on this (I didn't quote that part of your post to save space). Yeah, from reading the article this seemed to me to be more about spillover from the Perlman vs. LaSalle case than "Disney stole my stuff because they are EVIL!" Disney has a really good legal team so my guess is that Perlman gets paid off, but nowhere near close to what he thinks he'll get, and everything is resolved confidentially. Probably won't be in his best interests to fight this in court and potentially end up with a ruling that he doesn't own squat and on top of that he just ran up a gigantic legal bill.

  • The request for injunction is completely baseless and fails any legal requirement for even requesting one. This is just a media hound lawyer trying to grab headlines, and doesn't speak well for the merits of the case to begin with.

    There is no harm to Rearden from the continued distribution of these movies while the courts figure out how many millions (if any) Disney owes them, ergo no grounds for injunctive relief.

    • by Anonymous Coward

      Otherwise the big movie company will just slow down the case until the accusers run out of money and can't afford justice. This injunction means that the movie company cannot afford to just wait this out, therefore they will push for a quick resolution.

      Remember all those bits about the right to a speedy trial?

  • I sincerely hope they succeed ... it would be delightful to see Disney hoist by their own petard as it were. But the Mouse is the 800 lb gorilla in the IP cage match arena and I'm guessing they'll come out on top.
  • by Orne ( 144925 ) on Friday July 21, 2017 @12:49PM (#54853277) Homepage

    The claim is Rearden, LLC (Pearlman) invents the MOVA technology, and licenses it to Digital Domain Media Group (DDMG). Pearlman hires LaSalle and become friends, but the MOVA technology doesn't quite catch on in the VFX world. In 2012, DDMG goes bankrupt, and reforms out of bankruptcy in China as Digital Domain Holdings Limited (DDHL).

    Pearlman moved MOVA to OnLive Inc., declared it bankrupt, and moved the tech ownership to OL2 (a holding company operated by Lauder). In 2012, one of the Rearden partners (LaSalle) wanted to sell the technology to DDHL claiming Rearden wasn't doing anything with it. Lauder sells MOVA to Lauder Partners, who sells it to LaSalle's company MO2 LLC. DDHL instead arranged for MOVA to be sold from MO2 to SHST (Chinese subsidiary of DDHL), who licensed the technology back to DD3 (American subsidiary of DDHL). LaSalle then goes to work for DD3.

    In 2015, DD3 sells the MOVA service to Disney. Disney uses the technology in several live-action movies and makes a crap-ton of money. Pearlman now claims whaa? and reforms as Rearden MOVA, claming that they still own the tech. Pearlman claims that LaSalle violated his contract's inventions agreement by selling intellectual property owned by the parent company.

    In 2015, SHST attempts to preemptively sue Rearden that it has the rights to MOVA, and Rearden should stop using the name. Meanwhile they transfer MOVA to Virtue Global Holdings Limited (VGH, subsidiary of DDHL). In court, SHST/VGH fails to provide documentation that they owned the software, are counter-sued, and lose; VGH and SSTL are told to stop claming they own the software. DDHL later comes under investigation by Chinese regulators for creating a ton of shell companies to hide profits from the Chinese government.

    Rearden claims that
    1) they have the rights to MOVA, not DDHL,
    2) that DDHL violated software export laws and shouldn't have been allowed to sell MOVA to SHST in the first place,
    3) that DD3 didn't have the rights to license the MOVA technology to Disney, and
    4) Disney owes a share of their revenue to Reardon MOVA, the parent of Reardon, LLC.

    The only thing clear to me is that all of the parties involved are playing the "Hollywood profit hiding" game of creating shell companies to change who declares the revenues, moving profits among the shell companies, then declaring them bankrupt.

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