Disney Lists Copyright Protection Among Business “Risk Factors”

The Walt Disney Company does not joke about its Intellectual Property Rights. Special copyright laws like the aptly named “Mickey Mouse Protection Act” have been passed and individuals have been sued, banned from Theme Parks, and even thrown in prison all for the sake of protecting the IP.

In its 2022 Annual Fiscal Report, Disney tells its investors, “The Company’s businesses throughout the world are affected by its ability to exploit and protect against infringement of its IP, including trademarks, trade names, copyrights, patents and trade secrets,” and that “The success of our businesses is highly dependent on the existence and maintenance of intellectual property rights in the entertainment products and services we create.”

Disney clarifies, “Important IP includes rights in the content of motion pictures, television programs, electronic games, sound recordings, character likeness, theme park attractions, books and magazines, and merchandise.”

It seems 2022 was filled with stories regarding Disney’s fights and losses over its IPs, with the two biggest arguably being United States lawmakers deciding to relieve Disney’s special protection over its mascot Mickey Mouse, specifically beginning with the “Steamboat Willie” variant entering the public domain, and an ambitious director’s decision to make horror movies based on all the Disney Characters that fall like fruit from the proverbial tree into the public domain beginning with the twisted take on Winnie the Pooh.

It appears that due to this current climate, Disney decided to list its IP situation among its other “Risk Factors” in its 2022 Fiscal Report, stating, “a wide range of factors could materially affect future developments and performance.”

“The value to us of our IP is dependent on the scope and duration of our rights as defined by applicable laws in the U.S. and abroad and the manner in which those laws are construed,” the Company explains. “If those laws are drafted or interpreted in ways that limit the extent or duration of our rights, or if existing laws are changed, our ability to generate revenue from our IP may decrease, or the cost of obtaining and maintaining rights may increase.”

The Company also highlights the fact that the terms of some of its IP and copyrights have already or are about to expire, citing the “Steamboat Willie” situation specifically, as well as pointing to what they call “inadequate laws or weak enforcement mechanisms to protect entertainment industry IP,” and “successful challenges to our rights in IP” as potential risks to the company’s revenue. It is estimated that licensing profits from Mickey Mouse alone amount to billions of dollars per year.

Read More: Senator Introduces Legislation to End Disney’s Special Copyright Protections

It should be noted at this time that many of these risk factors are described as “forward-looking statements,” which “generally relate to future events or our future financial or operating performance,” including financial results and future liabilities.

“These statements reflect our current views with respect to future events and are based on assumptions as of the date of this report,” Disney clarifies. “A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances. You should not place undue reliance on forward-looking statements.”

The Magic Kingdom of Disney holds an unrivaled treasure trove of IP accumulated over its 100-year history through the work of world-class creatives and historic acquisitions including characters and stories from Minnie Mouse to Marvel, from Snow White and the Seven Dwarfs to Star Wars, from Tinker Bell to Toy Story, and beyond. And the Kingdom has worked to defend its treasure from copyright infringement with dragon-like ferocity on all fronts, from the innocent school function to the digital pirates.

Since Bob Iger resumed the role of Disney CEO, he has placed emphasis on the strength of the Disney brand and Disney-owned brands, exuding bullish confidence over the Company’s ability to maximize the profitability of that IP through means such as increased third-party licensing and Theme Park integration. Only time will tell though, how much trouble lies in waiting for Disney’s precious treasure as we venture deeper into 2023.

The Walt Disney Company’s Annual Meeting of the Shareholders will commence on Monday, April 3, 2023, at 10:00 a.m. PDT.