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CASE CAPTION: Marvel Enterprises Inc. v. Sony Pictures Entertainment Inc. and Columbia Pictures, a division of Columbia Pictures Industries, Inc., L.A. Superior Court # BC309803.
CAUSES OF ACTION: Breach of written contract; breach of the implied covenant of good faith and fair dealing; accounting; and unfair business practices in violation of Calif. Bus. & Prof. Code Sec. 17200 et seq.
COMPLAINT ALLEGATIONS: The “Men In Black” (MIB) films were based on Marvel's intellectual property. According to the defendants' net proceeds statements, the first MIB film grossed $493 million and the second film almost $275 million. Yet the statements provided to Marvel state that the films have actually lost tens of millions of dollars. Sony Pictures' financial statements “ask Marvel to accept as reality that, for every dollar earned, two were spent,” that distribution costs equaled or exceeded revenues and that costs of advertising alone equaled the cost of production. “Not only do the financial statements provided to Marvel defy common sense, given the 'MIB' motion pictures' public track records, they are replete with unsupported and unexplained specific charges whose only purpose is to unjustly enrich defendants.” Sony charged overhead on advertising without any explanation. As to merchandising, Sony has failed to report revenues, taken unauthorized deductions and overstated expenses.
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