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THE COPYRIGHT RULING

Disney Wins Big in Battle to Keep Company Icons

January 16, 2003|Richard Verrier | Times Staff Writer

The legislation may have been called the Sonny Bono copyright act, but it had Disney's name written all over it.

The Burbank-based entertainment giant wasn't party to the case in which the U.S. Supreme Court on Wednesday upheld a 1998 law extending copyright protection for an extra 20 years. Yet it had every right to savor victory in what it saw as a crucial battle to protect the most cherished characters in its corporate pantheon: Mickey Mouse, Donald Duck, Goofy and Dumbo, among others.

With those icons on the line, Walt Disney Co. had flexed every bit of its considerable lobbying muscle in pushing the Bono Act through a wary Congress. Had that law failed before the Supreme Court, analysts said, the company probably would have lost at least a billion dollars in revenue in the next few years. More immediately, Disney almost certainly would have seen its lackluster stock price plummet Wednesday.

The campaign to avoid just such a debacle began more than a decade ago, when Disney's then-President Frank Wells asked his legal team how to keep the characters created under founder Walt Disney from slipping into the public domain as they aged. Wells said that copyright protection was "the single most important issue we had to deal with," said one source familiar with the effort.

Disney's general counsel at the time, Sanford Litvack, compiled a range of options, including a search for legal grounds to protect the characters regardless of a copyright expiration. But not until 1996 did Disney firmly decide to fight for a new law, rather than searching for salvation in the old ones.

The catalyst was a decision by the European Union to extend its copyrights for 20 years. With that precedent, Disney officials were convinced that they could weather an expected storm of opposition to any copyright extension. Now, they could argue that they were defending not just their own self-interest but the rights of U.S. musicians and artists who would otherwise be at a competitive disadvantage to the Europeans.

Much of the heavy lifting in Disney's fight fell to Preston Padden, Disney's longtime Washington lobbyist. An affable yet wily operator, Padden has built a reputation as one of the most powerful in a legion of industry representatives.

In the campaign, Padden worked closely with Jack Valenti, head of the Motion Picture Assn. of America. Indeed, MPAA member companies such as AOL Time Warner Inc. and Metro-Goldwyn-Mayer Inc. were no more eager than Disney to lose their grip over trademark properties in their film libraries.

Perhaps the key connection, brokered by Padden, was a 1998 meeting between Disney Chairman Michael Eisner and then-Senate Majority Leader Trent Lott, the Mississippi Republican. Despite heavy pressure from librarians, Internet publishers and others who touted the virtues of the public domain, Lott threw his support behind what eventually was dubbed by one critic "The Mickey Mouse Protection Act."

Bono, the musician-turned-GOP congressman from Palm Springs, became the law's sponsor shortly before he died. When the law passed in 1998, insiders saw it as a personal coup for Padden. "Preston absolutely delivered the goods," said one source.

Disney had more to lose than its corporate rivals because so much of its identity -- from its theme parks to its TV programs to the logo on corporate documents -- is invested in the character of Mickey Mouse.

"This is a huge victory for Disney," said David Miller, an analyst with Sanders Morris Harris Group. "Disney's stock price would have taken it on the chin if it went otherwise."

Disney -- in what some saw as an attempt not to gloat -- released a muted statement after the high court's ruling, noting that it was "pleased."

But others were less restrained. "It was a big victory for us, but not unexpected on my part," Valenti said. "I thought it was going to be slam dunk."

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