Is it possible to buy the rights but not the obligations to a property? Disney related

Story here:

Disney has acquired the rights to all the works Alan Dean Foster on behalf of the Star Wars franchise but refuses to pay him royalties earned. As Foster says, "“When you purchased Lucasfilm you acquired the rights to some books I wrote,” explained Foster in a statement addressed to Disney. “STAR WARS, the novelization of the very first film. SPLINTER OF THE MIND’S EYE, the first sequel novel. You owe me royalties on these books. You stopped paying them.”

Foster’s Star Wars novels are not the only books for which Disney is withholding royalties, as the author notes that “when you purchased 20th Century Fox, you eventually acquired the rights to other books I had written,” which included “the novelizations of ALIEN, ALIENS, and ALIEN 3”, a trio of novels for which Foster claims Disney “never paid royalties on any of these, or even issued royalty statements for them.”
Can this in any possible way be legal when it comes buying the rights to intellectual property?

I am very curious about this. I have a hard time believing this is a legal practice; surely every media company of any kind would do it as a matter of course if it were, since it would essentially allow them to purchase works outright and never pay any royalties at all.

It sounds like a textbook case of a swindle.

Every publishing contract says it applies to the original publisher’s “successors or assigns.” Which means that if the publisher is bought out, the new publisher takes on the contract and its obligations.

Disney is unilaterally ignoring that clause. I can’t see a judge agreeing with them.

Disney has an army of lawyers. Maybe they’re doing this to a lot of authors and Foster is one of the few with the means to fight them?

I am shocked by that synopsis of something that somebody allegedly said. I’m not sure if I’d be shocked by the actual communication from Disney’s lawyers.

I suspect the issue is not that Disney’s lawyers are saying “nobody owes you any money” but possibly more along the lines of “corporate entity X does not owe you money, you should be asking corporate entity Y for your money” and corporate entity Y says they should be asking corporate entity X.

Hey, if a little public shaming can get the wheels moving on the legal process, more power to them.

Possible if he wins a case Disney would also have to pay lawyers fee for him. Or his lawyers take a cut of settlement. Either way he does not pay lawyers if he wins but would if he loses so it’s a risk.

Which has yet to happen, despite numerous requests.

I’m confused. The article says:

Kowal then offered further insight into the legal battle, describing how Disney is attempting to argue “ that they have purchased the rights but not the obligations of the contract.”

So Disney is arguing its position without communicating?

My interpretation was that talks have stalled between the two sides. That happens (it certainly happened in my one experience with a lawsuit) and it sucks.

This Science Fiction Writers of America webpage reproduces Alan Dean Foster’s letter to Disney:

This part really amazes me:

See here, too

I know this isn’t going to affect Disney’s bottom line one bit, but I am planning to cancel my Disney+ subscription. I had gotten it primarily to watch Hamilton, and it was cheap enough that I’ve hung on to it in case I wanted to see some of their other shows/movies. (I have been meaning to check out The Mandalorian just because of all the hype I’ve seen over it, but I can live without it.)

Even if it were possible to buy the rights but not the obligations, that would just mean that LucasArts still owns the obligations (not, mind you, that I think they would ever have even considered agreeing to a deal like that). One way or the other, someone owes Foster his royalties.

It seems Disney’s argument is that LucasArts did indeed agree to that. Where LucasArts is going to come up with the money to pay him since they don’t receive any of the proceeds, I have no idea, but if Disney is claiming that they simply purchased the right the publish the novels without being required to pay royalties to the author, the only logical explanation is that LucasArts still owes him royalties for sales made by Disney. It’s going to come down to the very precise wording of his contract to write the books and the contract of the sale of the assets. I highly doubt that anyone would ever rule that the author would not be due his contractual royalties by someone, which has been suggested as what the outcome would be if Disney would not be forced to pay, since that totally defeats the point of the author’s contract to write the book. It seems to me it would end up with LucasArts having to foot the bill somehow; they perhaps could get some of it back by suing the lawyers who allowed them to agree to this terrible deal, but that’s it.

This sounds like a ripe opportunity for abuse – spin off a shell company that has all your debts, none of your revenues, and one intern to send “sux 2 B U” letters to your creditors.

In principle, intellectual property is no different from real property. You could cut it into pieces and sell each bit separately, if you could find someone to agree to the sale. It’s like if you owed a car, you could pull out the engine, sell that, and keep the body, or sell it separately.

Doing that might not be a good idea, but it’s certainly possible. If someone wants just an engine, and they pay you enough for it that you decide having a car that can’t move is worth it.

LucasArts could in principle use some of the money they got to either buy out Foster’s rights, or invest in an annuity designed to pay out enough each year to cover the obligation. A big enough lump sum up front could have been worth it to them.

Assuming that this deal is as Disney claims it to be, of course.

When it comes to book rights, as in the ADF case mentioned in this thread, has it ever been done before?

Technically, Lucasfilm, not LucasArts.

Lucasfilm was George’s main company, which he sold to Disney, and which held the licensing rights to all things Star Wars. LucasArts was a division of Lucasfilm, which specifically made video games. Novels (like the ones written by Foster) were done under license to Lucasfilm, not LucasArts.

When Disney bought Lucasfilm, they got LucasArts as part of the purchase, but LucasArts no longer has any development staff – it mostly now simply exists to license Lucasfilm properties to other video game companies.

I have no idea, but I expect not. As other’s have noted, while this might be possible, it seems like an unlikely deal.

Sounds like a good idea for a car company.

Every book contract has wording saying it applies to the publisher and their “successors or assigns.” Lucasfilm either sold or assigned the contract to Disney, so Disney is responsible for the entire contract.

It is possible they sold the publising rights, but the contract is still in force and Lucasfilm would owe the royalties. But it would be close to legal malpractice if they didn’t insist Disney pay them royalties so they can live up to their contact with the author.

Same here, two days ago. When I canceled, I told them this was why, and I also told them that I would not knowingly spend any more money on any Disney property until they paid ADF what they owe him.