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Disney loses 3D patent action

October 4, 2013

By Chris Forrester

A Delaware federal judge has denied a Walt Disney Company appeal that claimed the studio giant holds a broad licence on 3D film patents acquired and later sold by bankrupt special effects company Digital Domain Media Group (DDMG), confirming that Disney’s rights to the technology are somewhat limited.

DDMG was co-founded by 3D guru James Cameron back in 1993. DDMG’s assets were mostly sold to India’s Reliance MediaWorks and Galloping Horse America. However, DDMG held on to some key assets for the benefit of creditors, and top of the manifest were the 2D to 3D conversion patents.

US District Judge Sue L. Robinson firmly rejected Disney’s claim that an agreement with original patent owner In-Three gave the studio a licence to use its technology which in particular helped convert 2D movies to 3D. The court determined that DDMG’s sale of the acquired intellectual property rights to RealD, which is very much a going concern, were in order.

Disney filed an emergency appeal on Feb 1 with the court, arguing that it had an option to acquire the rights. The appeal application followed a December 2012 decision by Delaware bankruptcy judge Brendan Shannon to approve the patent sale as part of the bankruptcy process. During that bankruptcy decision the judge asked: “And to put a finer point on it, for purposes of the Debtor’s Sale Motion, will whoever buys the In-Three Patents from the Debtor be required to permit Disney to use that technology, gratis, in perpetuity?”  The answer, said the judge, was, “No”.

The background Court papers are at:

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