Business Musings: Long-term IP Management

In writing about the Las Vegas Licensing Expo, held in May, I spent a lot of time discussing how writers should think about their intellectual property. In short, writers should consider their IP a living breathing entity that has a lifespan all its own; IP is not something to be easily discarded or sold for a quick buck.

Writers who do that will live to regret it.

In the previous post, I discussed how the most valuable intellectual properties are the ones with longevity, even if they’re not the most famous properties. A property with a long history also has a long relationship with its fan base, something that businesses which license intellectual property for things like games and toys truly value.

And as if to prove my point, a few things happened in the real world (not at the Expo) to bolster that opinion.

The first made me receive a lot of commentary from friends and jokes from acquaintances, none of whom realized how deadly serious the event was.

In May, Authentic Brands Group issued threatening cease-and-desist letters to wedding chapels around Las Vegas. The reason? ABG told the chapels that they were using Elvis Presley’s image, music, and iconography without permission.

I’d often wondered about some of these places. I live in wedding chapel central, not far from several chapels that have a silhouette of Elvis as part of their logo. Not a week goes by in my neighborhood without an Elvis getting into a Cadillac or a group of Elvises (Elvi?) standing around a fake grass lawn or Elvis hits wafting from the cupola of a nearby wedding chapel.

If I’d given this anything—and I really hadn’t—I’d assumed that these Elvis appearances were licensed. I do recall discussing Elvis impersonators in my recent Entertainment Law class in regards to some music copyrights: the Elvis estate routinely denies Elvis impersonators synch licenses, licenses that allow the impersonator to marry their video to Elvis’s music. I get that; the estate wants videos of Elvis singing to be Elvis, not someone else.

That can’t stop the impersonators from releasing their own versions of Elvis tunes—that’s a completely different music license, one the Elvis Presley Estate has little control over. But the Estate has tried, in the past, to put some limits on the use of Elvis.

Not a lot of limits, mind you. When Elvis died, in 1977, there were no impersonators, no Vegas Elvis weddings, nothing like that. There were no laws on the rights of celebrities to control their own images. All of that—what little there is—was developed long after Elvis died, and is still changing and growing.

The Elvis impersonator industry, including the wedding chapels, evolved over decades, and the Elvis estate did not actively pursue imitators. So the industry flourished.

The Elvis estate fascinates me, because of its management history. Elvis essentially died broke, and when his ex-wife Priscilla took over, the estate had little ability to generate revenue. Priscilla, with the help of advisors, created Elvis Presley Enterprises “to manage all Elvis image rights and remaining royalties, which primarily included turning Graceland into a tourist attraction. Between Graceland profits, merchandising, image deals, and royalties from songs recorded after the RCA deal, Priscilla and her co-executors of the Elvis Estate helped grow its value to a reported $100 million by 1993” according to Forbes.

That year, Lisa Marie Presley turned 25, and was able to claim her part of the estate. Then things got messy.

I’m not going to go into the mess here, but suffice to say that Lisa Marie got her father’s business acumen, not her mother’s. She appointed a business guy, one Barry Siegel, to handle the financial affairs. He sold 85% of Presley’s interest in EPE and invested some part (this is murky to me) in a holding company that included American Idol and eventually went bankrupt.

During this great financial upheaval, Authentic Brands Group acquired the rights to license and merchandise all things Elvis. ABG calls itself “an intellectual property corporation,” and it handles the images of Marilyn Monroe and Muhammad Ali, among others. The details of the deal aren’t easy to find, but suffice to say that this deal was made for money, not because EPE wanted to lose control of its cash cow.

ABG has a nasty reputation for bullying. According to TechDirt, among other places, ABG has a history of “overstating what IP and rights it actually has.”

Bullying often works in IP cases because the costs of going to court are so very high. If a company like ABG comes after a small business like a wedding chapel, then the small business usually has no recourse but to cave. A long-term lawsuit on these issues can cost upwards of $100,000 or more. Very few small businesses can absorb that.

But ABG made a biiiiiiig mistake going after wedding chapels in Las Vegas. The wedding industry in this city is a two billion dollar industry, and Elvis-themed weddings are a big part of it.

So, when ABG went after the chapels (and not all of them, either), it screwed up. Within days, the chapels had banded together to fight this overreach, and had the entire city behind them. Eighteen-thousand jobs were suddenly at risk, not to mention all the other Elvis themed products.

ABG didn’t randomly pick this spring to go after the chapels. There’s a big Elvis movie coming out on June 24, and some person at ABG figured that would increase interest in Elvis. They sent these letters so that no one would profit off the Elvis revival but them.

Big problem, though. People have been profiting off Elvis for decades. Yes, EPE and the estate have occasionally gone after trademark infringers, but not in any organized way. Neither has ABG.

This has serious implications for potential lawsuits. ABG expected the wedding chapels to roll over and either give up their work or pay hundreds of thousands without a fight. ABG did not want a legal fight, because they have not correctly defended the Elvis brand.

No one has. It would take years, but there’s a strong possibility that lawsuits over the IP could result in ABG and EPE losing their trademarks over Elvis. To maintain a trademark, you need to vigilantly defend it. EPE and ABG did not defend much at all. In fact, for years, EPE and ABG allowed this to go on, and so to try to shut it all down now might be impossible.  (Lawyers, feel free to correct if I’m wrong.)

Given the fact that ABG reversed course the moment the wedding chapels and the city got involved tells me that some higher up in the company blinked. I’m sure some junior lawyer has been fired and now ABG is trying to clean up its mess.

The clean-up is ugly as well. ABG is now trying to charge for a license, which they should have done in the first place. The charge went (in less than a week) from tens of thousands to $500 per year. No one has signed anything or agreed to anything, and if the chapels are getting advice from some of the good IP attorneys in this city, I doubt anyone will pay for a license.

The game of chicken is underway, and, in my opinion, ABG and Elvis’s estate will lose.

Why am I telling you this? Because Elvis Presley is the 7^th highest earning dead celebrity, according to Forbes. The estate earned $30 million last year. Yes, some of that was Graceland, but it also included licensing a TV channel and a Netflix animated alternate history series in which (I’m not kidding) “Elvis will explore an alternate history where he faked his own death to fight crime with a secret government spy program.”

As I mentioned before, long-term IP is worth a lot of money. Even when it’s badly mismanaged, as the Elvis estate has been since Priscilla stepped away from it all. The dang thing keeps earning money. Clearly a lot of that money is going into the pockets of people who have no connection to the long-dead King, but that’s because of the mismanagement.

Had Lisa Marie handled everything—or let her mom remain in charge—that $30 million would go directly to the estate instead of others. And clearly, someone would have known better than to mess with the wedding chapels and Vegas, which have done more to keep Elvis’s legacy alive than almost any other group.

That’s story number one—and now, my friends, you understand why it is not a joke.

Story number two is one many of you sent to me. Each one of you sent a different article, and all of those articles were different from the one I initially saw.

Yep, there’s a copyright lawsuit over the new Top Gun: Maverick movie. A lawsuit so serious that should some judge really want to, the judge could pull the movie from the theaters.

The lawsuit was filed in early June, and so far, the movie is still playing well, so I doubt that any injunction will happen. But what’s going on here is almost the exact opposite of what happened with Elvis.

In 1983, Ehud Yonay published an article in California Magazine called “Top Guns.” The original movie, Top Gun, was based on this article. In fact, Ehud Yonay received a single card credit in the movie, which I noticed when I rewatched the movie in late May.

Yonay’s involvement wasn’t hidden, like the involvement of so many writers. It was there for everyone to see.

Yonay died in 2012. In 2018, Yonay’s widow and son filed a notice to reclaim the full copyright…and notified Paramount Pictures that it was doing so. The rights reverted to the Yonays in 2020, and in January of 2020, they filed a notice of termination of the copyright with Paramount Pictures, knowing full well that the Maverick movie was in development.

The Yonays claim that Paramount needed to reacquire the film and ancillary rights to the article. In other words, they needed a new agreement.

Paramount claims they do not need to do that, since the movie was more or less complete before the notice of termination hit. The pandemic messed everything up, including timing here. The Yonays claim that the movie wasn’t completed until May of 2021, long after Paramount received notice.

This will be up to a court to decide. What’s happened in most of these 35-year reclamation cases is that ultimately the licensing agreements are renewed, with a boatload of money going to the copyright holder. Most of these cases are settled and the terms are not disclosed.

Since I’ve heard nothing since, and since the movie is still in theaters, I’m pretty sure that’s what’s going to happen here. At some point, the Yonays will get a deserved financial windfall. Deserved because the article is the foundation of the original movie and anyone who has seen the second movie knows that it is strongly based on the first.

Deserved too because the Yonays did everything right. They applied for the copyright reversion at the first moment they could, and they notified Paramount twice through proper channels.

The Yonays might not prevail. But if Paramount pursues this, the legal costs will be ridiculous. Better to pay the copyright holders, which I’m sure some high-priced attorneys are arguing right this very minute.

Unlike the Elvis estate, the Yonay estate is protecting and guarding its intellectual property. That’s how it’s done.

And all of this ties into the Licensing Expo stuff. Remember, older IP is valuable.

I want you to think about this: an article written in 1983 has IP that is worth millions because of some licensing agreements. An article.

Or, think about the fact that Elvis, a has-been who died cash poor, is earning more in death what he ever earned in life. The IP is worth a lot of money, which is why ABG backed off its initial bullying tactics. ABG doesn’t want to lose the tenuous grasp it has on the Elvis IP, which it stupidly endangered in May.

Most writers think their work isn’t worth anything. They license as much of the copyright as they can on the first sale, figuring that’s all the money they’ll get.

Agents encourage this, because they want upfront money. Major magazines have now changed their contracts to demand that writers license the full copyright, including movie and TV rights.

Agents and magazines (and many others) have recognized the value of a writer’s copyright, but writers don’t. Writers don’t understand IP at all. They certainly don’t understand that they can license their IP in hundreds of different ways.

I blog about this often, and wrote a book about it, but most writers willfully ignore what I have to say. Most writers trust their book agents, who are untrained, unlicensed, and unregulated, instead of attorneys or common sense.

You writers need to learn about IP. You need to value it. You need to use your imaginations to envision a future in which a story you wrote fifteen years ago suddenly has an opportunity to earn 10 times what it originally earned, because someone needs a license for a product based on the story’s topic.

Yeah, some magazine or book publisher might offer you money right now, but believe me, that money is a drop in the earnings bucket. If you protect your IP, it will earn money for you for decades. Your copyright belongs to you and your estate for 70 years after your death. Seventy years of earning for the estate.

Don’t think it happens to writers? Think about the Tolkien estate. The Dune estate. The Roald Dahl estate ($165 million in 2021 alone). The Dr. Seuss estate ($35 million in 2021). Were any of these writers earning that kind of money when they were alive? Hell, no.

Some writers do. Sometimes its sheer luck that they didn’t license too much of their copyright. Some writers actually know what they’re doing and license properly.

Be one of those writers. Protect your assets. Yeah, they might not be worth a lot in 2022, but what about 2050? 2070? You have no idea if something will take off and become successful in the future.

Bet on yourself. Believe that your work will be worth something in that future and protect the work now.

If you don’t, no one else will.

Learn from all of this, and the things I saw at the Licensing Expo. Start thinking big.

Like writers should.

*****

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“Business Musings: Long-term IP Management,” copyright © 2022 by Kristine Kathryn Rusch. Image at the top of the blog copyright © 2022 by  Kristine Kathryn Rusch.