Disney infringed on a VFX company’s intellectual property when it used copyrighted technology to animate CG characters in Beauty and the Beast, a jury has found.
Siding in favor of Rearden, an Oakland jury on Thursday awarded the firm roughly $600,000 after finding that Disney knew it may be engaging in copyright infringement by utilizing VFX software called MOVA Contour, which has been used in array of titles by major studios across Hollywood, but continued to use and benefit from it regardless. Part of the verdict, nearly $350,000, is meant to claw back profits attributed to use of the tech.
The figure represents a fraction of the damages that Disney potentially stood to lose in the case, which threatened profits for Beauty. Rearden looked for more $100 million, arguing that the movie’s box office success was due to VFX work performed by MOVA.
Five months after Beauty opened in theaters, Disney was sued by Rearden for improperly using its tech in three movies, including Guardians of the Galaxy and multiple Avengers installments. At the core of the dispute was whether DD3, the company Disney teamed up with on the project, owned the tech that the movie’s principal players attributed to its 10-figure success. A complicated chain of title, involving a bankruptcy and a fraudulent sale, effectively led to confusion around ownership and licensures of MOVA.
The sole claim in the trial was whether Disney should be held vicariously liable for DD3’s alleged infringement of MOVA, meaning it was aware that the company may not have properly licensed the tech but continued to use and benefit from it anyway.
The award signals that jurors didn’t credit a large portion of Beauty’s box office earnings to VFX work performed by MOVA. Of Disney’s $255 million in profits for the film, they attributed roughly $345,00 to use of the tech.
In a 2016 prequel to the legal saga between Rearden and Disney, a federal judge froze Digital Domain’s licensures of MOVA in a preliminary injunction targeting DD3 affiliate Shenzhen Haiticheng Science and Technology and Virtual Global Holdings, a British Virgin Islands-based firm that thought it owned MOVA and licensed it to DD3. U.S. District Judge Jon Tigar found that the companies had behaved “fraudulently” in transferring ownership of the tech among various Chinese firms. The order set the stage for Rearden to go after various studios that used the tech.
While jurors were aware of the decision, they were instructed that Disney wasn’t a party to the case and isn’t legally bound by the final judgment.
On summary judgment, claims for contributory and trademark infringement were dismissed. Tigar found that Disney “did not know, or have reason to know, of DD3’s alleged infringement before the court held in 2017 that Rearden owned MOVA.”
Disney and Rearden didn’t immediately respond to requests for comment.
A sequel to the case may come in the form of another trial over Avengers: Infinity War and Avengers: Endgame, which were released after the 2017 decision putting Disney on notice that it may be infringing on Rearden’s tech.