Category Archives: Spider-Man

The Superior Spider-Man & The March Across the Valley of Death (Part 2)

(This is the second part of a two-part guest post written by Anthony Cova, who serves as the Corporate Counsel at Addgene, Inc., a nonprofit plasmid repository, where he handles the company’s legal and technology transfer matters.  The views expressed in these posts are solely those of the author and do not necessarily reflect the views of Addgene.)


In Part I, I discussed the origins of technology transfer, or transfer of university innovations to the public in a commercially available form. Since the 1787 Constitution, the federal government and most universities have shared a common objective of promoting the general welfare by encouraging, supporting and sharing innovations. Nonetheless, many innovations, such as the cybernetics technology that enabled Aunt May and Flash Thompson to walk again, fail to reach the public. Many innovations may perish in the Valley of Death (the “Valley”), because they lack the necessary funding. Others fail because companies like Parker Industries (“PI”) choose to shelve the innovation.

In Part II, I will discuss how Empire State University (“ESU”) and the federal funding agencies (collectively, the “FED”) can rescue the cybernetics technology from PI on the public’s behalf. For the purposes of this discussion, I make the following assumptions: Octavius’s cybernetics technology, as researched and developed at PI, is (i) federally funded (ii) patentable technology (iii) that was assigned to, and (iv) retained by, Empire State University and (v) exclusively licensed to PI.[1]



ESU: With Great (Patent) Power, Comes Great (Contractual) Responsibilities

  1. Power of Assignment

Universities and other organizations electing to retain title to federally funded inventions (“FFIs”) must comply with several provisions under the Bayh-Dole Act (“BD”). Otherwise, they may lose not only title to those FFIs but possibly federal funding as well. Given the dwindling pool of federal research dollars and the increasing need for license derived revenue, few universities can afford to mismanage their innovations. For most U.S. universities, proper management begins well before an invention’s conception—it starts with the inventor.

Under U.S. patent law, the owner of an invention is the individual inventor. However, due to the pervasive nature of federal funding in university research and its various obligations, many university policies, as a prerequisite to hiring or enrollment, often require faculty, graduate students and other researchers to assign to their university all patent rights in any future inventions. Even non-university members may be subject to such assignment provisions if they make use of substantial university resources. In the event that federal funding has contributed to an invention, these provisions help universities avoid practical challenges (such as engaging a reluctant or adverse inventor-owners), comply with BD obligations, and, ultimately, facilitate the dissemination of university innovations to the public.

By enrolling at ESU to pursue a Ph.D., Octavius would have agreed to ESU’s intellectual property policy, which, based on similarly situated New York universities, such as Columbia, NYU, and SUNY,[2] likely stated that any patentable technologies Octavius developed while at ESU or using ESU resources were assigned to ESU. Accordingly, the cybernetics technology[3] was likely assigned to ESU.[4]


2. Power of Fees and Payments

      If a university elects to retain title to a FFI,[5] it must comply with several BD obligations. These include: (i) sharing an invention’s technical specifications with the public by filing a patent application within a year; (ii) favoring U.S. manufacturers for invention products; (iii) favoring small businesses in licensing deals; and (iv) reinvesting any FFI derived income into further university research. More importantly, universities have an obligation to (v) ensure that their licensees diligently work toward making licensed FFIs, and their practical benefits, available to the public on reasonable terms. In order to ensure diligent pursuit of these obligations, the FED requires universities to provide periodic reports on FFI development. These and other obligations are intended to protect a twice-charged public’s[6] investment and to facilitate public availability.

While university-industry licenses will inevitably vary, universities concerned with the possibility of FFI shelving by an exclusive licensee can safeguard the public’s interest through proper contract drafting. For example, many university technology transfer offices (“TTOs”) use annual fees to motivate licensees to diligently commercialize a FFI. If a fee becomes prohibitively expensive to carry year to year and the licensee is not expected to recoup any costs through FFI commercialization, the licensee would be expected to end the agreement. The TTO could then market the FFI to more diligent licensees. A TTO could also include license milestone payments. Not only do these payments incentivize FFI commercialization, they also provide less financially stable licensees with additional research and manufacturing funds. In either case, these payments and fees are more likely to work for smaller licensees with a good faith intention of making the FFI publicly available. With larger licensees who can afford to carryover such fees, or, in Parker’s case, where shame outweighs commercialization, these solutions may fail to deter intentional shelving.


  1. Power of Termination

Many universities consider the dissemination of knowledge integral to their academic mission, notwithstanding any federal obligations. Any failure by the university or its licensees to pursue such dissemination circumvents this mission and, in the case of FFIs, may lead to BD noncompliance. Accordingly, TTOs often require licensees to provide periodic reports on FFI development and commercialization. These reports may include production milestones, estimated availability and first sales. A licensee’s failure to diligently pursue FFI public availability is often treated as a material breach of the license, which becomes subject to termination.

Assuming ESU patented the cybernetics technology, PI would have had to license the technology from ESU. Moreover, assuming the technology was federally funded, such ESU-PI license likely required PI to comply with certain diligence obligations, including reports on achieving public availability of the cybernetics technology. Because Parker has publicly announced that PI would cease developing the technology, ESU could terminate the license for material breach and save the cybernetics technology.


March of the FED

  1. Promoting the General Welfare

A constitutional objective of the federal government is to promote the general welfare. This objective is reflected in the taxing and spending clause, which allows Congress to collect taxes to “provide for the common defence [sic] and general welfare,” and the intellectual property clause, which allows Congress to grant patents and copyrights to “promote the progress of science and the useful arts.” Given their economic, academic and societal benefits,[7] the FED’s funding of university research and its granting of patents are instrumental in furthering that objective; provided that these powers are not misused or abused. Intentional FFI shelving forces the public to suffer through a constitutionally protected patent term without benefitting from a FFI’s practical applications and robs the public of the fruits of its tax derived, federally-invested, research dollars.


  1. Promoting Public Availability

A primary objective of BD is to promote “the utilization of inventions arising from federally supported research or development” and their “commercialization and public availability.”[8] To determine whether effective steps have been taken to achieve a FFI’s public availability, the FED requires federally-funded universities and/or their licensees to submit periodic reports on a FFI’s utilization and development,[9] including its production status and date of first commercial sale. If the FED determines that the university or licensee has not taken the necessary steps to achieve practical application of the FFI within a reasonable time, the FED has a duty to the public to exercise its march-in rights and license, or force the university or its licensee to license, the FFI to someone else.

While the FED has yet to enforce its march-in rights under BD, previous march-in petitions were focused on product pricing rather than utilization and public availability. For example, in CellPro, the National Institutes of Health (“NIH”) determined that a FFI licensee had achieved practical application because it had licensed the FFI and was manufacturing and operating publicly available FFI products. Additionally, the licensee’s decision to allow petitioner’s continued sale of unlicensed FFI products, which met particular public needs that licensee’s products did not, also evidenced practical application. According to the NIH, granting petitioner compulsory licenses to the FFI would “influence the marketplace for the benefit of a single company” and would have “far-reaching repercussions.”[10] For similar reasons, the NIH refused to march-in on a licensee that offered FFI-based drugs at different prices in different countries. According to Xalatan, the “issue of whether drugs should be sold in the United States for the same price as they are sold in Canada and Europe has global implications and, thus is appropriately left for Congress to address.”[11] The FED’s unwillingness to exercise its authority under BD to alleviate pricing concerns has been echoed in other determinations.[12] However, in each case, the NIH found that the FFI was publicly available or would be made publicly available within a reasonable time.


  1. Marching in

In the event that ESU refuses to take action against Parker and PI, the FED has a duty to exercise its march-in rights against ESU and/or PI. It is clear that public availability of the cybernetics technology has not and will not be achieved in a reasonable time. Unlike previous petitions to the NIH/FED, this is not about product pricing. Parker has publicly declared that PI would be putting the cybernetics technology line on hold indefinitely. There is no question that the “licensee [i.e., Parker Industries] has not taken, or is not expected to take within a reasonable time, effective steps to achieve practical application of the [FFI].” To my knowledge, the cybernetics technology has yet to be developed for public “availability” or “use” and neither Parker nor PI have sublicensed the technology to another. Given the technology’s life-changing benefits and potential, the FED should not allow Octavius’s technology to gather dust on PI shelves and should exercise its march-in rights.



       Patents, like many objects of power, are subject to those who wield them. Many patent holders use their period of exclusivity to recoup development costs or to break into an otherwise competitive space. Some patent holders, however, wield their rights like a troll—waiting in ambush for deep pockets and/or new innovations in order to reap financial gain. In the case of Peter Parker, the technology that enabled Aunt May and Flash Thompson to walk again is simply being ignored out of pride. His decision to shelve the technology robs the public of its financial investment and impedes the general welfare.

Fortunately, there is hope. ESU and the FED can rescue the technology from the Valley of Death and ensure that others may benefit from Octavius’s work. ESU not only has academic principles to uphold but, as a recipient of federal funding, has federal obligations to meet. If ESU does not terminate its exclusive license with PI and otherwise make the technology available to other licensees, ESU could lose its patent rights and subsequent federal funding. Should ESU fail to act, the FED is empowered by BD to promote the utilization of inventions arising from federally supported research and to protect the public against the nonuse or unreasonable use of such inventions. In the event that the public is deprived of access to a FFI for an unreasonable amount of time, the FED is authorized to exercise its march-in rights and to license the technology to a more diligent licensee.

Notwithstanding the wrath of an angry Sanjani, Parker’s failure to achieve practical application of the cybernetics technology will likely have other consequences beyond the termination (or loss) of the ESU exclusive license. PI might face damages for breach of contract, and Parker himself might be liable for mishandling company assets.[13] In any case, Parker’s hubristic decision to shelve Octavius’s life-changing cybernetics technology is not as simple as his public announcement suggests. Therefore, while Octavius may no longer be a part of Peter Parker’s world, ESU and the FED can ensure that Octavius’s superior legacy lives on.


[1] These assumptions describe typical technology transfers. Additionally, I am assuming that Sajani’s and Anna Maria’s continued work on the technology is irrelevant for the scope of this article. Their work has not been approved by Parker or PI. Indeed, they work in secret and have taken great strides to keep it hidden from Parker and the rest of the company. Accordingly, any discussions between Parker, ESU and the FED would be based on Parker’s understanding of the technology’s development, i.e., shelved and no longer pursued.

[2] See generally New York University, University Policies: Statement of Policy on Intellectual Property 1, 4-5 (2012), Columbia University, Appendix D – Statement of Policy on Proprietary Rights in the Intellectual Products of Faculty Activity, and The State University of New York Board of Trustees, Official Compilation of the Codes, Rules, and Regulations of the State of New York, Title J- Patents, Inventions and Copyright Policy § 335.28 (b) (2015).

[3] I am assuming that the technology developed by Octavius and subsequently developed at PI is not the exact technology that drove the villain-Octavius’s arms and that, for patent purposes, the current technology is sufficiently different to warrant patentability.

[4] There is a possibility that Parker was under a similar assignment provision as a Horizon Labs employee. Upon acquisition of Horizon Labs, Tiberius Stone told Octavius that all inventions in production, including Spider-Man technology, were the acquired property of Allan Chemical. However, the cybernetics technology was not then in production. Moreover, it is unclear if Octavius was conducting his research at Horizon Labs or on Spider Island II. Finally, because Stone was fired from Horizon Labs prior to Octavius’s acquisition of Parker’s body, Stone was likely unaware of any cybernetics-related technology Octavius was developing.

[5] Receipt of federal funding does not require universities to retain title. Universities can waive title back to the inventor or to the FED.

[6] The public has paid once in tax dollars and once in suffering a patent monopoly.

[7] Discussed in Part I.

[8] 35 U.S.C. § 200 (2012).

[9] The information required by a university from a licensee in a diligence report often mirrors the information required by the FED.

[10] National Institutes of Health, Office of the Director, Determination in the Case of Petition of CellPro, Inc. 6 (1997).

[11] National Institutes of Health, Office of the Director, In the Case of Xalatan Manufactured by Pfizer, Inc. 6 (2004).

[12] See generally National Institutes of Health, Office of the Director, In the Case of Norvir Manufactured by Abbot Labs., Inc. 4 (2004), and National Institutes of Health, Office of the Director, Determination in the Case of Norvir Manufactured by Abbvie 7 (2013).

[13] Greater discussion of claims against an officer are beyond the scope of this article.

The Superior Spider-Man & The March Across the Valley of Death (Part 1)


(This fantastic guest post, the first of two parts, was written by Anthony Cova, who serves as the Corporate Counsel at Addgene, Inc., a nonprofit plasmid repository, where he handles the company’s legal and technology transfer matters.  The views expressed in these posts are solely those of the author and do not necessarily reflect the views of Addgene.)


Since regaining control of his body from Dr. Otto Octavius following the events of The Superior Spider-Man, Peter Parker has had his hands full reconciling with family, friends and co-workers, and restoring Spider-Man’s credibility with the public and other heroes. Yet, despite all the harm Octavius caused during his tenure as Peter Parker/Spider-Man, he still managed to obtain a Ph.D., found a company and restore Parker’s loved ones’ ability to walk.

Now, the cybernetics technology that freed Aunt May from her cane and Flash Thompson from his wheelchair is at risk. In a recent public address, Parker announced that Parker Industries would be putting its cybernetics line “on hold” to research and develop technologies focused on capturing, imprisoning and depowering super villains. Parker, who does not possess Octavius’s cybernetics knowledge, would rather shelve a proven technology than carry out another’s work. Given the benefits of Octavius’s cybernetics technology, can Parker simply halt its research and development (presumably indefinitely) out of pride and insecurity? Will the public be deprived of invaluable cybernetic prosthetics? Who can rescue the technology from the crumbled shelves of Parker Industries?[1]

In Part I, I will provide a brief overview of technology transfer—its history, objectives, and barriers. Part II will then describe the powers and objectives of Empire State University and the federal government and whether they are sufficient to rescue the cybernetics technology on the public’s behalf.


The Origin Story

In the sweltering summer months of 1787, a conclave of demigods[2] assembled behind bolted doors and shuttered windows at the Pennsylvania State House. Their task: to bandage a hobbling federal government. However, rather than patching the Articles of Confederation, the demigods chose to create an entirely new constitution. Unlike its penniless, toothless predecessor, the 1787 Constitution empowered the federal government to collect taxes “to provide for the common defence [sic] and general welfare;”[3] to grant inventors an exclusive right (a patent) to exclude others from using their inventions for limited periods of time “to promote the progress of science and the useful arts;”[4] and to make all laws “necessary and proper” to “carry[] into execution the foregoing powers.”[5] While these powers strengthened the federal government, they were intended to be exercised to “promote the general welfare.”[6]

Since the conclave’s end, the U.S. has grown into a global, economic power. Recognizing the benefits of “promoting the progress of science and the useful arts” and the need to remain competitive internationally, the federal government, through its various agencies (collectively, the “FED”), began funding university research. Similar to the FED, universities are “conducted for the common good.”[7] They are committed to the education of their students, the pursuit of unbiased research and the dissemination of knowledge to the public. Moreover, as institutes of higher learning, universities have historically served as centers of innovation. Indeed, many products today can be traced back to a university lab notebook or chalkboard.[8] When innovations are transferred from universities to commercial partners and, ultimately, the general public, this process is referred to as “technology transfer.” Unfortunately, despite FED objectives and university academic principles, technology transfer is not always successful.


The Bayh-Dole Act and the Rise of the Technology Transfer Offices

Prior to 1980, title to any patentable innovations developed through government-sponsored contracts or federally funded research (a federally funded invention or “FFI”) typically vested in the FED. This reflected the rationale that research funded by the public belonged to the public. Ironically, only a handful of FFIs ever reached the public. Neither the FED nor the university possessed the necessary resources to develop and commercialize FFIs for public use, and obtaining developmental help from the private sector was often a slow, circuitous process due to the number of funding federal agencies and/or their inconsistent intellectual property policies.[9] Exacerbating FFI unavailability was the fact that some FED agencies offered FFIs on a non-exclusive basis only, believing that non-exclusivity provided the public potentially with greater access. Unsurprisingly, this deterred many in the private sector from investing in and commercializing a FFI. If the public was ever to benefit from the fruits of its tax dollars, legislative and systematic changes were needed.

In 1980, Congress passed the Bayh-Dole Act (“BD”) in order “to promote [FFI] commercialization and public availability” and “to protect the public against [FFI] nonuse or unreasonable use.”[10] By granting universities the right to retain title to FFIs, BD allowed universities to facilitate technology transfer transactions on behalf of the FED and to streamline the licensing process. Revenue from these licenses also provided universities additional funds to be reinvested into further research. Since its passage, BD has created thousands of jobs, generated billions of dollars and significantly increased the number of FFIs reaching the public. Nonetheless, the right to retain title is not absolute. BD requires universities to timely file patent applications, to prefer certain licensees and, most importantly, to promote a FFI’s utilization, commercialization and public availability. Universities that fail to comply with these and other obligations risk losing title to FFIs and even future research funds.[11]

With so much at stake, U.S. universities have established special administrative offices, generally referred to as technology transfer offices (“TTOs”), to manage regulatory compliance and advance university policies. TTO operations can typically be divided into three purposes: (1) generate revenue for the university to supplement federal grants; (2) support the university’s research community (e.g., facilitating industrial partnerships, assisting spinout companies, responding to student and faculty intellectual property queries, etc.); and (3) comply with external laws and regulations. While some TTOs may focus their operations on one purpose over another, most TTOs fulfill, to varying degrees, all three. More importantly, as stalwarts of their universities, TTOs are charged with defending and advancing their universities’ core academic principles. TTOs must be vigilant of any hazards that could interfere with a university’s ability to develop and disseminate innovations and knowledge to the public. For example, contract provisions that restrict publication or intellectual discourse amongst faculty are often immediately struck from any collaboration agreement. Licenses that restrict universities’ rights to use an invention for research purposes are often renegotiated, and any agreements that narrow or remove access to research tools are best avoided. Given these academic principles and the BD obligations described above, TTOs have a duty to promote public availability of FFIs and to ensure that the public will ultimately benefit from federally funded university research.


The Valley of Death

Across the commercial plain, nestled between academia and the consuming public, lies the Valley of Death (the “Valley”). Despite the best efforts of countless TTOs, the Valley has claimed many worthwhile innovations. Some FFIs perish along the way for lack of funding—having failed to attract investors or to maintain sufficient cash flows. Others—having been deemed commercially invaluable—may be immediately abandoned at the Valley’s edge. Although lack of funding and investment support are endemic to the Valley, those wishing to guide FFIs through the financial brambles have many tools at their disposal. Universities and local business groups often offer low cost spaces or business incubators for small businesses. Financial programs like the Small Business Innovation Research Program provide federal funds to support the research and commercial development of small business innovations. Even federal laws, such as the Orphan Drug Act, can incentivize commercial investment and development of less marketable technologies. While these and other tools may not always be sufficient to blaze a path through the Valley, TTOs can help FFI licensees appropriately equip themselves for the attempt.

More troubling within the Valley are the surreptitious barbs of patent trolls or the alluring facades of devious competitors. Patent trolls often use broadly written, and sometimes ambiguous, patents to poke at a company’s portfolio in hopes of spearing forced royalties and/or settlement payments. Although many companies may succeed in routing these attacks, they may find they have suffered significant financial lacerations to continue beyond the Valley. Devious competitors, looking to maintain or promote their own technologies, might approach a TTO with alluring exclusive license terms, only to later bury the competing technology within the Valley. While President Obama and various legislators have taken great strides to cull the patent troll population and professional technology transfer organizations have developed best practices to prevent the burying or intentional shelving of exclusively licensed technologies,[12] many innovations continue to languish in the Valley.

In the present case, Parker has simply decided that Parker Industries will no longer pursue the cybernetics technology. The decision to shelve the technology—thereby abandoning it in the Valley—stems from Parker’s hurt pride rather than for lack of funding. Unlike Aunt May and Flash Thompson who benefitted directly by Octavius’s hand, the public may have to wait years before the cybernetics technology finds its way out of the Valley, just because Parker is ashamed that he lacks the necessary cybernetics skills and knowledge. For some members of the public, access to such life-changing technologies may come too late.


To be Continued . . .

Next time, in Part II of this series, we will consider whether the powers and obligations of Empire State University, the university where Octavius earned Parker’s Ph.D., and/or the FED, are sufficient to rescue the technology from Parker Industries on behalf of a needy and ready public.


[1] This article was originally written shortly after the Ghost had destroyed Parker Industries.

[2] Letter from Thomas Jefferson to John Adams (Aug. 30, 1787), in Hilary, Prologue: Pieces of History, The National Archives, Dec. 5, 2012 (referring to the Framers of the Constitution as an “assembly of demigods”).

[3] U.S. Const. art. I, § 8, cl. 1.

[4] U.S. Const. art. I, § 8, cl. 8.

[5] U.S. Const. art. I, § 8, cl. 18.

[6] U.S. Const. pmbl.

[7] American Association of University Professors, 1940 Statement of Principles on Academic Freedom and Tenure 14 (1940).

[8] For example, Gatorade was developed at the University of Florida; the algorithms for Google were developed at Stanford University; and the components that produce high-definition television were developed at MIT.

[9] There were 26 different federal agency policies regarding the use of federally funded research at the time of the Bayh-Dole Act’s consideration. U.S. Gen. Accounting Office, GAO-09-742, Information on the Government’s Right to Assert Ownership Control Over Federally Funded Inventions 4 (2009).

[10] 35 U.S.C. § 200.

[11] For example, in Campbell Plastics, the Federal Circuit determined that a federal defense contractor had forfeited its right to retain title under BD for failure to comply with BD’s invention disclosure requirements. Campbell Plastics Engineering & Manufacturing, Inc. v. Brownlee, 389 F.3d 1243 (Fed. Cir., Nov. 10, 2004).

[12] See David Kravets, History Will Remember Obama as the Great Slayer of Patent Trolls, Wired (Mar. 20, 2014) (discussing the various implementations to combat patent trolls including five executive orders issued by President Obama and patent reform legislation introduced in Congress); and AUTM, In the Public Interest: Nine Points to Consider in Licensing University Technology (AUTM, Mar. 6, 2007).

Uncle Ben at the Supreme Court

Thanks to Joe, Josh, and others for pointing out Justice Kagan’s quotation in yesterday’s decision in Kimble v. Marvel:

What we can decide, we can undecide. But stare decisis teaches that we should exercise that authority sparingly. Cf. S. Lee and S. Ditko, Amazing Fantasy No. 15: “Spider-Man,” p. 13 (1962) (“[I]n this world, with great power there must also come—great responsibility”). Finding many reasons for staying the stare decisis course and no “special justification” for departing from it, we decline Kimble’s invitation to overrule Brulotte.

I happen to disagree with the majority’s decision; Brulotte v. Thys was wrongly decided*, and the Court wasted a rare opportunity to correct a mistake.  So on the one hand the citation and other references to Spider-Man were fun, but on the other hand it felt a little too cute by half for a decision that will ultimately result in Marvel (now part of the second largest media company in the world) avoiding royalty payments to an individual inventor whose idea Marvel (apparently) pretty blatantly ripped off.  The tone of the opinion is incongruous with its consequences.

It may seem a little overly dramatic in a case that is ultimately about money, but I am reminded of Robert Cover’s Violence and the Word:

Legal interpretation takes place in a field of pain and death. This is true in several senses. Legal interpretive acts signal and occasion the imposition of violence upon others: A judge articulates her understanding of a text, and as a result, somebody loses his freedom, his property, his children, even his life. Interpretations in law also constitute justifications for violence which has already occurred or which is about to occur. When interpreters have finished their work, they frequently leave behind victims whose lives have been torn apart by these organized, social practices of violence. Neither legal interpretation nor the violence it occasions may be properly understood apart from one another.

This is not to say that all judicial writing should be humorless.  I have enjoyed reading any number of funny, often acerbic opinions, but those opinions were usually written in response to parties that were themselves behaving badly or foolishly, and so deserved to be treated lightly or even mockingly.  In this case, however, the Court has sided with a multi-billion dollar corporation over an individual inventor and did so on fairly technical grounds.  The majority interpreted the law of stare decisis, and as a result Stephen Kimble lost his property (i.e. the contractual right to royalties from sales of the patented toy).  This does not seem like an appropriate occasion for such levity.

Stepping back off my soap box, I promise the next post will return to discussing the legal implications of comic book hijinks.

* A full discussion of why this is the case is beyond the scope of this blog, but if you’re interested, see the dissent in Kimble and Judge Posner’s opinion in Scheiber v. Dolby Labs.

Ultimate Spider-Man #117

The question behind today’s post comes from Levi.  Trigger warning: this post deals extensively and frankly with the subject of suicide.

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Nobody Foresees the Lizard

We received a great question about The Amazing Spider-Man and liability for the damage done by the villain.  Spoilers below!

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The Amazing Spider-Man: Warrants and Assault

As we discussed in our background post, most of the issues in The Amazing Spider-Man aren’t new, but there are two stand-outs.  There are some  minor spoilers ahead for anyone who hasn’t seen the trailers, and a couple of very minor spoilers for anyone who hasn’t seen the film.

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The Amazing Spider-Man: Background

So The Amazing Spider-Man came out last weekend. This is a “reboot” of the Spider-Man cinematic franchise. Rumor has it that Sony’s rights to the franchise would expire if they didn’t release a film every so often, so when Raimi withdrew from the planned Spider-Man 4, the studio opted for a full-on reboot. Given the choice between an arguably too-soon reboot—Spider-Man was only ten years ago and Spider-Man 3 came out in 2007—and letting to of what was almost guaranteed to be a multi-million dollar cash cow, the choice seems pretty obvious.

This post is actually more of a reminder about things we’ve already discussed rather than an exploration of new ground. We’ve already talked about a lot of the legal issues raised by Spider-Man, and The Amazing Spider-Man doesn’t exactly break much new ground here. The following touches on most of the more obvious issues in the movie. We’ll follow this up with some new material on Friday.  In the meanwhile, if you have any questions, feel free to mention them in the comments or email us!

Just last month we talked about Spider-Man and likeness rights, something related to two guest posts on the right of publicity generally.

This one isn’t immediately relevant to the new movie, as Parker’s connection with The Daily Bugle hasn’t been established yet, but we did look at the possibility liability Parker has for not being entirely honest with the Bugle about his relationship with Spider-Man.

We took a brief look at a story from Ultimate Spider-Man # 6 back in February.

Spider-Man isn’t a journalist in this movie—now he just takes pictures for the school newspaper and yearbook, etc.—but he is in a lot of the comics, and we looked at that here.

In April 2011 we examined whether patents might be a problem for Parker given that he’s arguably making off with sensitive data. We then revisited the issue last September, considering the passage of the America Invents Act on our earlier discussion.

A bit earlier we did a two post series on superpowered minors, and while we don’t talk about Spider-Man directly, it’s possibly relevant, although we don’t know exactly how old Peter is in this version.

One thing that is more directly relevant is the issue of costumes and the confrontation clause, something that this version of Spider-Man might well have to deal with given the way he drops off criminals for the cops. We don’t specifically mention Spider-Man in that post, but he does wind up testifying in costume in an early She-Hulk comic, so it’s definitely an issue.

Related to costumes, we discussed the issue of superhero merchandising (part two), something which actually comes into play in the movie. We see a guy wearing a Spider-Man t-shirt, for example.

Then there’s the duty to rescue, an issue always raised in any discussion of Uncle Ben’s death, but thrown in sharp relief here given the way it’s portrayed this time.

Very early on we did a four-part series (one, two, three, four) on superheroes and privacy rights. This issue is touched on rather explicitly by the film, as the dangers Parker’s activities as Spider-Man will pose to his loved ones are discussed.

Mayor Jameson’s Eminent Domain Problem

We’ve picked on Spider-Man a bit recently, so in interests of fairness we’re going to pick on J. Jonah Jameson, who is currently the mayor of New York in the Marvel Universe.  Recently, Jameson has focused his ire on Horizon Labs, a research and development company that happens to employ Peter Parker in his capacity as a scientist.

The particular issue in today’s post comes from a question from Christopher, who writes:

[In Amazing Spider-Man #682] Parker and other Horizon Labs employees witness a confrontation between HL owner Max Modell and Mayor Jameson in which the Mayor says “As Mayor of this city, I am ordering all of you to vacate these premises immediately!” He has arrived to bully HL into shutting down and gives various reasons [, listed below]. Later in issue 683 he comes back with “Chief Pratchett” presumably some ranking officer in the NYPD and shuts off the company’s power supply: “You’re not getting a single amp out of Con Ed!” He then orders “Chief Pratchett, have your men clear the building, after that, no one gets in or out, understood?” Chief Pratchett accedes to the request but we cut away from the confrontation and don’t return this issue.

This is obviously an ongoing storyline which will play out over another 4/5 issues but surely Jameson is overstepping his authority to clear out a private building without any kind of court order. And isn’t Pratchett wrong to comply?

At various points in #682 and #683 Jameson gives some reasons for wanting Horizon Labs shut down, including:

1. “This man has access to spider-jammers that could control Spider-man! Yet he refuses to turn them over to the city!” (see Spider-Island 667-673)
2. “One of your people built a time machine that did destroy the city.” (678-679)
3. “And now I hear you have a monster holed up here?!” (679.1 The “monster” is Dr. Morbius)
4. “Two days ago, you almost got my son killed.” (680-681)

So, is any of this sufficient to justify cutting power and ordering the police to clear the building?

As Horizon’s lawyer, who was present for the first confrontation with Jameson, argues, probably not.  The spider-jammers have been destroyed, the EPA cleared Horizon regarding the alternate universe incident (who knew that the EPA had jurisdiction over time travel and alternate futures?), and Dr. Morbius isn’t a monster but rather suffers from a poorly-understood medical condition.  Jameson isn’t satisfied and vows to return, which leads to the second confrontation (the one with the power-cutting and the police).

But suppose Jameson’s allegations were correct.  Could the mayor really do that?  And if not, what is the potential liability for Pratchett and the other police officers?

I. Eminent Domain

The most likely source of Jameson’s power to order Horizon shut down is eminent domain, which allows the taking of private property for public use in exchange for just compensation.  New York has a statute, the New York Eminent Domain Procedure Law, that is just what it sounds like.  It sets out “the exclusive procedure by which property shall be acquired by exercise of the power of eminent domain in New York state.”  N.Y. Eminent Domain Proc. Law § 101.  Unfortunately for Jameson, it doesn’t look like he has complied with the procedures.

A. Public Hearing

Ordinarily the eminent domain process begins with a public hearing.  § 201.  However, there are some exemptions, one of which is when “because of an emergency situation the public interest will be endangered by any delay caused by the public hearing requirement in this article.” § 206(D).  I suppose it’s arguable that Horizon presents such an extreme danger to the city that a public hearing can be avoided.

However, Horizon labs could file suit to challenge the City’s determination that it is exempt under § 206(D).  “Where, however, a condemnor proceeds under one of the exemptions provided in EDPL 206, and therefore claims that it is not required to comply with the foregoing notice, hearing, and determination requirements, a condemnee may, unless otherwise provided by statute, challenge the applicability of the claimed exemption in the Supreme Court … .” Steel Los III, LP v. Power Authority of N.Y., 33 A.D.3d 990, 990-91 (2006).  The reviewing court would almost certainly issue a temporary restraining order or preliminary injunction preventing the City from shutting down Horizon until it had reviewed the case.  Given that Horizon appears to be represented by competent legal counsel, I think it’s likely Horizon would go to court once Jameson threatened to take the building.

B. Negotiations

The eminent domain law also requires the condemnor (i.e. the City) to “make every reasonable and expeditious effort to justly compensate persons for such real property by negotiation and agreement” “at all stages prior to or subsequent to an acquisition by eminent domain.” § 301.  This includes making at least one written offer representing the just compensation for the property.  § 303.

In this case, we don’t see any discussion of compensation, much less negotiation or a written offer.  Instead, Jameson seems to think he can simply take the building outright.  There is a lot more to eminent domain, but I think that’s enough to establish that Jameson wasn’t doing it right.

II. Consequences

Assuming the City can’t legally take the building through eminent domain, what are the possible consequences for cutting power and forcibly evacuating the building?  The most likely result is a § 1983 suit alleging a violation of Horizon’s constitutional rights, specifically their rights under the Fourth Amendment.  If successful, this could result in an award of actual damages, punitive damages, and attorney’s fees.  Given the expensive equipment and experiments that may have been lost or damaged by the sudden loss of power, that could be a pretty significant bill for the city.

Importantly, the City and officers could claim qualified immunity under § 1983.  “The doctrine of qualified immunity protects government officials from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.”  Pearson v. Callahan, 555 U.S. 223, 231 (2009).  “The protection of qualified immunity applies regardless of whether the government official’s error is a mistake of law, a mistake of fact, or a mistake based on mixed questions of law and fact.”  Id.

So, for example, if the officers were told that the City had a court order to shut down Horizon, then the officers might not be liable because they were operating under a mistake of fact.  Jameson, however, clearly knew what was up, and I think it would be hard for him to claim qualified immunity, at least if he thought he was exercising the power of eminent domain, since a reasonable person would have known about the proper procedure for doing so.

III. Conclusion

There are other possible ways that the City could try to shut down Horizon (e.g. alleging violations of the law and arresting everyone or suing the company), but the way it’s depicted in the comics really suggests eminent domain to me.  I think it’s reasonable to assume that if the City had a good claim to criminal or illegal activity then it would have simply called in the cops or sent in the lawyers.  Jameson’s approach is so vague that eminent domain is the only thing that I can think of that fits the bill.  Alas, his failure to follow proper procedures is likely to get him (and the City) sued.

Peter Parker, Con Artist?

The inspiration for today’s post comes from Greg, who asks:

During the Civil War storyline, for a brief time Peter Parker “outed” himself as Spider-Man. … J. Jonah Jameson wanted to sue Peter for fraud because he sold pictures of Spider-Man to the Daily Bugle under  what [Jameson] claimed were false pretenses. My question is, would that hold any water?

The facts for this question come from Amazing Spider-Man #533 (which you can buy reprinted in The Amazing Spider-Man: Civil War).  Specifically, a lawyer for the Bugle tells Parker that the Bugle is suing him for “misrepresentation, fraud, breach of contract and several other related charges” and they are seeking both compensatory and punitive damages of at least five million dollars.  So, how worried should Parker be about this?  Pretty worried, in our estimation.  Let’s take a look at each charge in turn.

(Before we get started, we’ll mention that there would have to have been a contract between Parker and the Bugle for the photographs because, as an independent contractor, Parker owned the copyright in his photos and would need to license or sell the copyright to the Bugle via a contract before they could be printed.  See this post for more on that.)

I. Misrepresentation

Because both breach of contract and fraud are also listed, we think that misrepresentation is being used in the contract law sense rather than the tort law sense.  In the contract law sense, misrepresentation is also known as fraud in the inducement (i.e. a misrepresentation made in order to induce the other party to enter into a contract).  This should not be confused with the tort of fraud, which we’ll get to shortly.

In New York, “To recover under a theory of fraudulent inducement, the plaintiff must prove: (1) misrepresentation of a material fact; (2) falsity of the representation; (3) scienter; (4) reasonable reliance; and (5) damages.” Creative Waste Mgmt., Inc. v. Capitol Env. Servs., Inc., 429 F.Supp.2d 582, 607 (S.D.N.Y. 2006).  “Scienter” is a fancy legal word for “knowledge,” and in this case means the defendant has to make the misrepresentation knowingly.

So, has the Bugle likely got a case for fraud in the inducement here?  Let’s go through the elements.

(1) Misrepresentation of a material fact.

Right off the bat we run into a small snag: did Parker ever explicitly claim that the photos were unstaged photos of a different person?  Maybe, maybe not.  But even if he didn’t, his silence may be enough.

“[W]hen dealing with a claim of fraud based on material omissions, it is settled that a duty to disclose arises only when one party has information that the other party is entitled to know because of a fiduciary or other similar relation of trust and confidence between them.” Creative, 429 F.Supp.2d at 607.  Such a relation can be imputed by the “special facts doctrine,” under which “the courts impose a duty on a party with superior knowledge of essential facts to disclose those facts where nondisclosure would make the transaction inherently unfair. For this doctrine to be applicable, the plaintiff must prove that (1) one party has superior knowledge of certain information; (2) that information is not readily available to the other party; and (3) the first party knows that the second party is acting on the basis of mistaken knowledge.” Id.

Clearly, Parker had superior knowledge of Spider-Man’s identity.  Jameson had no clue who Spider-Man was and certainly didn’t suspect Parker.  The information was not readily available, as demonstrated by the fact that quite a few people, Jameson included, had tried and failed to determine Spider-Man’s identity.  And it can reasonably be assumed that Parker knew that Jameson wouldn’t have bought the photos if he knew they were staged and being sold to him by Spider-Man.

So Parker’s misrepresentation by omission will suffice.  It’s also definitely a material misrepresentation (i.e. it would have made a difference in whether a contract was agreed to) because Jameson would not have bought the photos if he knew the truth.

(2) falsity of the representation

This one is pretty easy.  At the very least the photos were falsely presented as genuine news photographs and not a semi-staged photo-op for Spider-Man.

(3) scienter

No question here; Parker definitely knew he wasn’t being honest about the photographs.

(4) reasonable reliance

Another easy one.  It was entirely reasonable for Jameson to believe that Parker was not Spider-Man and that the photos were genuine.  Unlike some superheroes (*cough* Superman *cough*), Spider-Man does a believable job of keeping his identity secret, and there was nothing incredible about the photos.

(5) damages

This one is also straightforward.  The Bugle paid Parker money for the photos, per the contract, and so there are damages.

So that’s misrepresentation established.  What does it get the Bugle?  The likely result is rescission of the contract and restitution of any money paid to Parker for the photographs.  So the Bugle gets its money back and no longer owes Parker anything under the contract.

II. Breach of Contract

This one is a little harder to write about, since we don’t know what the terms of the contract were.  It’s extremely likely, however, that the contract included a representations and warranties section in which Parker affirmatively represented that the photos were genuine, unmodified, unstaged, etc.  By trying to pass off the (effectively) staged photos, Parker would have breached the contract.

The practical upshot of the breach of contract claim is the remedy.  Breach of contract remedies are a little complicated, but the main damages here will be the loss of value due to lost reputation.  What it definitely doesn’t get the Bugle is punitive damages, as damages in contract cases are almost always compensatory. Even in cases of a fraudulent breach of contract, punitive damages are not available unless the fraud was “malicious, vindictive or morally reprehensible [demonstrating the] intent of wanton and reckless behavior.” Reinah Development Corp. v. Kaaterskill Hotel Corp., 59 N.Y.2d 482, 487 (1983).  Parker was not trying to scam the Bugle, so we don’t think his conduct rises to that level.

Because the damage due to lost reputation is so hard to measure, it’s possible that Parker’s contract with the Bugle included a liquidated damages clause.  A liquidated damages clause lets the parties agree to a particular amount of damages in advance.  Parker could thus be on the hook for whatever that amount is times the number of photos the Bugle printed (or, less likely, the number it purchased).

III. Fraud

“Generally, in a claim for fraudulent misrepresentation, a plaintiff must allege a misrepresentation or a material omission of fact which was false and known to be false by defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission, and injury.” Mandarin Trading Ltd. v. Wildenstein, 16 N.Y.3d 173, 178 (2011).  As you can see, that’s remarkably similar to the elements of fraud in the inducement.  The difference in this case is in the remedy.  Whereas the remedy for fraud in the inducement is to undo the contract, the remedy for tortious fraud covers all of the damages stemming from the Bugle‘s reliance on Parker’s misrepresentations and omissions.

But wait a minute, that sounds a lot like the breach of contract damages.  And that’s right: the damages for fraud would be essentially identical to the damages for breaching the representations clause of the contract.  But you don’t get to recover twice for the same injury, so even if the Bugle proved both claims it wouldn’t get twice as much money.  So why bother suing for both?  First, because it might not be able to prove both claims and second, because the contract might not include a representations section (though this is unlikely)

IV. Conclusion

All told, Parker is looking at a pretty serious lawsuit.  As well he should, since passing off staged or manipulated photographs is a serious journalistic no-no, even if it’s done for the best of reasons.

Ultimate Comics: Spider-Man

The new run of Ultimate Comics: Spider-Man from Brian Michael Bendis is getting rave reviews.  There haven’t been a ton of overt legal issues, but a scene from the recent issue #6 caught my eye.  Spoilers ahead!

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