Disney breaks contract with Alan Dean Foster, refuses to pay royalties on older STAR WARS books

[Werthead]

Work-for-hire contracts, I've been told, can have some rather awful clauses in them. That might be the case here, and Disney could have a legal right to withhold the money. Or at least think they are in a position to present a compelling legal argument that they do.

The contracts were with Lucasfilm and then Fox, signed in the 1970s, and Disney inherited them.

 

[Vince W]

The contracts were with Lucasfilm and then Fox, signed in the 1970s, and Disney inherited them.

I would say they bought them and the responsibilities that go with them.

 

[Teresa Edgerton]

But I have seen ... somewhere, I don't remember where, it was years ago ...contracts where authors were asking others whether they should sign ... and they did have such clauses, where if the company sold the rights on to another company the author lost the rights enumerated in the contract. They were small presses, bad ones, (and everyone who was being asked for advice said, "No, don't sign") but they must have gotten the idea for those clauses from somewhere.

If that was the case here, Fox may have also had the legal right to withhold the royalties, but decided not to do so because they didn't want the ill-will among readers when they found out. And in any case, I am not saying that Disney is morally right in withholding the royalties, just that it is possible they have a legal right.

 

[tinkerdan]

I would tend to agree with this and your previous post.

But I have seen ... somewhere, I don't remember where, it was years ago ...contracts where authors were asking others whether they should sign ... and they did have such clauses, where if the company sold the rights on to another company the author lost the rights enumerated in the contract. They were small presses, bad ones, (and everyone who was being asked for advice said, "No, don't sign") but they must have gotten the idea for those clauses from somewhere.

If that was the case here, Fox may have also had the legal right to withhold the royalties, but decided not to do so because they didn't want the ill-will among readers when they found out. And in any case, I am not saying that Disney is morally right in withholding the royalties, just that it is possible they have a legal right.

However, if that were the case, you'd think that Disney would simply say,' read your contract'. It wouldn't necessarily stop some from attempting a law suit, but if that were the case that they did say that, then the other side is not admitting to the entirety of the problem.

 

[Bick]

And in any case, I am not saying that Disney is morally right in withholding the royalties, just that it is possible they have a legal right.

From everything I've read, I'm sure this is not the case.

 

[Teresa Edgerton]

However, if that were the case, you'd think that Disney would simply say,' read your contract'.

We here have no way of knowing what passed between them privately.

It wouldn't necessarily stop some from attempting a law suit, but if that were the case that they did say that, then the other side is not admitting to the entirety of the problem.

It would certainly not be the job of Alan Dean Foster's representatives to make any part of Disney's case for them.

But the original contract might be worded in such a way that both sides think they are in the right legally. (Just because something is in a contract it doesn't mean that a court will uphold it. Then there is the court of public opinion. A lot of people are very ready to believe the worst of Disney. If they are fans of ADF's books, so much more will they be willing to side with him. But if the original contract is somehow at fault, it would be harder to convince die-hard fans that Lucas's organization was to blame.*)

I'd just have to know a lot more than any of us do seem to know for certain right now before I'd have the least idea which side was in the right legally. These things are often tricky and none of here are experts, so far as I know, when it comes to literary contracts and the law.

Anyway, my main point is that some contracts do have such clauses, and that anyone signing a work-for-hire contract with a large publisher or any kind of contract with a small one (or, really, any sort of contract with any sort of publisher) should be aware that there are such traps for the unwary and to be very, very careful what they sign. We have a lot of aspiring writers here, and I bet most of them are unaware of half the things they should look out for.

(*Why would such clauses even exist, some may be asking. What would be in it for the original company? Because if, at some future date, they found it expedient to sell on their assets it will make it easier to find a buyer if the company that buys those assets is not held to all the same obligations.)

 

[Foxbat]

Good food for thought, Teresa.

 

[Bick]

We here have no way of knowing what passed between them privately.



It would certainly not be the job of Alan Dean Foster's representatives to make any part of Disney's case for them.

But the original contract might be worded in such a way that both sides think they are in the right legally. (Just because something is in a contract it doesn't mean that a court will uphold it. Then there is the court of public opinion. A lot of people are very ready to believe the worst of Disney. If they are fans of ADF's books, so much more will they be willing to side with him. But if the original contract is somehow at fault, it would be harder to convince die-hard fans that Lucas's organization was to blame.*)

I'd just have to know a lot more than any of us do seem to know for certain right now before I'd have the least idea which side was in the right legally. These things are often tricky and none of here are experts, so far as I know, when it comes to literary contracts and the law.

Anyway, my main point is that some contracts do have such clauses, and that anyone signing a work-for-hire contract with a large publisher or any kind of contract with a small one (or, really, any sort of contract with any sort of publisher) should be aware that there are such traps for the unwary and to be very, very careful what they sign. We have a lot of aspiring writers here, and I bet most of them are unaware of half the things they should look out for.

(*Why would such clauses even exist, some may be asking. What would be in it for the original company? Because if, at some future date, they found it expedient to sell on their assets it will make it easier to find a buyer if the company that buys those assets is not held to all the same obligations.)

But Disney have acknowledged the original contract they bought out required payment of ongoing royalties. It clearly wasn’t an ill-advised work for hire contract. ADF isn’t a green author with a poor agent, he’s an experienced professional who’s been signing royalty contracts for 50 years.

 

[Teresa Edgerton]

Well, he hadn't been doing that for fifty years when he signed that contract, had he?

But yes, he was experienced and no doubt had a good agent. But if Disney has acknowledged that the original contract obliged them to go on paying royalties after they bought it out, what is their argument that they don't owe them now? Surely there argument is that they did NOT inherit that obligation.

Anyway, I have no idea which one of them has the legal right here, not having seen the original contract, and neither I suppose have most of the people up in arms about this. Presumably the real facts will come out eventually. I assume that SFWA knows what it is doing. But on the other hand, it is hard to imagine that Disney lawyers don't know what they are about. The only thing I know for sure is that such clauses do exist sometimes and writers should watch out for them.

 

[Bick]

We here have no way of knowing what passed between them privately.

Yes we do - Alan has been clear what has passed between them - nothing whatsoever - as they have refused to answer queries from Alan, his agent or SFWA, they have simply halted payments that were made for decades previously according to his contract. But you seem to be adamant in your defense of a multinational who are infamous for stiffing artists regardless of the described facts, so I'll leave it there.

 

[Pyan]

Yes we do - Alan has been clear what has passed between them - nothing whatsoever - as they have refused to answer queries from Alan, his agent or SFWA, they have simply halted payments that were made for decades previously according to his contract. But you seem to be adamant in your defense of a multinational who are infamous for stiffing artists regardless of the described facts, so I'll leave it there.

I fail to see that pointing out that Disney's lawyers may possibly be correct in their interpretation of a contract (that we have no details of) is defending the actions "of a multinational who are infamous for stiffing artists regardless of the described facts".
Whereas it would seem that these are manifestly unfair and a breach of faith, unless you happen to be an expert in US copyright law, we have no way of telling which side is correct in law - and if the law is on Disney's side, I'd hardly expect their lawyers just to roll over.
I'm not defending Disney - all I'm saying is that we simply don't know who is correct, and whether the case presented by ADF would stand up in court, or is just an emotive plea to 'do the right thing'. As Disney are staying schtum, all we have is one side of the argument.

 

[Teresa Edgerton]

Never once have I defended Disney here. I said they MAY have some legal basis for what they are doing. (Surely, oh surely Disney lawyers are not babes in the wood or cheap con artists. They may or may not be villains, but they will know the law.) I also said that morally they ought to pay him.

You may have some private acquaintance with Alan Dean Foster and know exactly what was said (or not said) and by whom. That does not apply to the rest of us, or to all the people declaring they will end their Disney subscriptions. People read stories online and get excited and indignant before they have all the facts. It's regrettable, because I believe it serves neither side in such a dispute.

But again, and for the last time, the point of my posts has been that writers need to be careful not to sign away rights without recognizing what they are doing, as many writers have done before them. I have no opinion on the legal standing of this particular case because I don't know enough about it.

 

[BAYLOR]

I fail to see that pointing out that Disney's lawyers may possibly be correct in their interpretation of a contract (that we have no details of) is defending the actions "of a multinational who are infamous for stiffing artists regardless of the described facts".
Whereas it would seem that these are manifestly unfair and a breach of faith, unless you happen to be an expert in US copyright law, we have no way of telling which side is correct in law - and if the law is on Disney's side, I'd hardly expect their lawyers just to roll over.
I'm not defending Disney - all I'm saying is that we simply don't know who is correct, and whether the case presented by ADF would stand up in court, or is just an emotive plea to 'do the right thing'.

I sincerely hope that ADF comes out on the wining side of this case.

 

[Bick]

Never once have I defended Disney here. I said they MAY have some legal basis for what they are doing. (Surely, oh surely Disney lawyers are not babes in the wood or cheap con artists. They may or may not be villains, but they will know the law.) I also said that morally they ought to pay him.

Fair enough, those are all reasonable comments, and my last point was indeed unfair - my apologies, and I retract it.

I'm quite sure though that the fact Disney have expert lawyers doesn't make it more likely they have found some genuine legal loophole that suddenly removes their contractual obligations though - it makes it much more likely they think they they have the legal muscle to just get away with something. You're aware its Disney who have kept getting copyright duration extended in the US, merely to protect the Mickey Mouse iconography, right? The Disney corporate goal would appear to be to try to change laws specifically to extend and protect exclusive IP. Perhaps they are trying this on in an attempt to instigate law change that would greatly benefit them, given that their business model is now based to a large extent on established franchise acquisition (e.g. buying Star Wars, Alien).

 

[Teresa Edgerton]

Your apology is accepted.

Yes, I am aware that they are the ones getting copyright duration extended in the US, and it is because it is in their own interest to do because it protects the Mickey Mouse iconography. They don't give a hoot if it incidentally helps writers and their heirs.

But you wouldn't expect me, as a writer, to be against extending copyright, would you? I have very strong views on intellectual property rights, as a matter of fact. If Alan Dean Foster is being cheated out of his, then I think that is atrocious. But if there is a legal loophole somewhere that Disney can exploit ... then if they are successful other companies will no doubt do the same (and not just big, powerful companies like Disney, small companies already have awful contracts some times) then writers and artists of all kinds need to know about it so they don't end up in the same situation.

We need to know: is the loophole there, what does it look like, how can we recognize it, how can we avoid it.

But if the Disney business model it now based, as you suggest, on franchise acquisition, they may not have to change the laws, because the precedents are already there. All they need to do is find ways to twist existing laws to their advantage.

 

[Brian G Turner]

Anyway... back to Alan Dean Foster and Disney. Let's see if there are any updates. I have a sneaking suspicion that this decision was more likely made by a middle manager who had been told to cut costs. Let's see.

 

[Werthead]

We do know what the contract contains, because the SFWA told us at rather exacting length via the video they recorded. Foster gets a royalty even if the rights are sold on to third parties later on. That's hardcoded in the contract.

Against, these contracts were signed with Lucasfilm and Fox in 1976 and 1979 before the tie-in media market as we know it really existed. The contract they used was a standard novel contract which guaranteed the author a royalty in perpetuity. Modern contracts might be somewhat different, but it's not really relevant to these specific contracts.

 

[Robert Zwilling]

This has been going on for several years now. Payments stopped in 2014, and ADF couldn't find out who the rights holder was. After SFWA got involved, they found out in 2017 that Disney was the rights holder. Talks went nowhere, and if publicly unchallenged, Disney could have set an unspoken precedent where businesses could routinely not pay royalties for material that they bought from another company.

Reading the original article and the comments adds some information. The best thing that can be done, according to Mary Robinette Kowal, president of SFWA, is supporting the #DisneyMustPay hashtag. This steers bad publicity in Disney's direction. It needs to be trending big time.

Going to court means a protracted expensive legal battle, which doesn't mean the right thing will be done in the end. And a pro big business court could end up saying that the obligations are separate from the rights. An article on a different web site said NBC-Universal was also trying to get the obligations separated from the rights in contracts.

One commentator said that contracts need to have it spelled out that the obligations are included with the rights, but Mary Robinette Kowal said that was not needed because it would go against everything US contract law is based on, and his contract has a clause, specifically says that it is binding on “successors and assigns” which would include Disney. Mary also said that breaking this clause would hurt everyone. So it sounds like this is a case of Brave New World speak which says what was true yesterday, doesn't have to be true today.

Perhaps a corporation would be willing to engage in a court battle (not a case to see that the right thing gets done) where they gamble on getting a decision that separates obligations from rights, versus being told to pay what they are required to pay. They supposedly have to pay the money anyway, but if they win, they won't have to pay anyone every time a business with intellectual property gets sold. This could effectively make creative writing a job that ultimately only pays by the hour, or by the word. For many writers in the last century, this was the only way they could get paid. In effect, big business is putting things back the way they were.

Until people realize that money isn't just money, it isn't just a representation of a number, but is exactly the same as drugs, good or bad, exactly the same as bullets, used for good or bad, that it is a shield, protecting good or bad, things like the ADF case will always have people scratching their heads, wondering how it could ever happen. Life seems so much easier when you don't connect the dots.

 

[Bick]

From Alan's website, this sounds promising:
"The irritating imbroglio with Disney, which you may have read about, is moving rapidly toward a mutually agreeable conclusion. A formal statement will be forthcoming."

 

[psikeyhackr]

The annoying thing is that this should be peanuts to Disney. The royalties should only be a percentage of what is being made anyway.

So Deiney is saying, "We get to take everything, you get nothing!" Even a pro-business court should figure that should tend to kill future creativity.