DeLorean Estate's Lawsuit over 'Back To the Future' Royalties

Under the accord between DeLorean Motor and the DeLorean family, the Texas company agreed to pay an unspecified sum to the estate, according to court documents. The estate said in the settlement that it would release the defendants from “any and all claims and causes of action” that were sought or could have been sought in the litigation. Also under the settlement, the estate agreed not to challenge the use by DeLorean Texas of the name “DeLorean Motor Company” or “DMC.”

DeLorean Texas' attorney in the prior case, William Mead Jr. of Litchfield Cavo in Cherry Hill, NJ, said he was not familiar with the latest suit and had not been retained to handle it. The company did not respond to a phone call or an email about the case.

The DeLorean DMC-12, with its gull-wing doors and brushed stainless steel body panels, was produced from 1981 to 1983 in a factory in Northern Ireland. Only about 9,000 were made. But it earned a place in pop culture in 1985 when Marty McFly, played by Michael J. Fox, traveled through time in a DeLorean radically modified by Doc Brown, played by Christopher Lloyd, in Back to the Future.

The DeLorean is at the center of the plotlines in the three Back to the Future films: Fox's character uses the car to journey to the past and future, including one trip where he encounters his own parents as teenagers.

John DeLorean signed a contract with Universal in 1989, providing royalty payments for use of the vehicle in Back to the Future. That contract gave DeLorean a 5% cut of Universal's net receipts for merchandising deals in which the car is a “key component.” Universal made some payments under the agreement but stopped at a point in time that is unknown by the estate, according to the new lawsuit. The estate could not enforce John DeLorean's rights at the time of his death because it did not have a copy of the agreement, the complaint claims.

Attorney Thompson said the estate approached Universal in February 2018 about royalty payments pursuant to the 1989 contract, only to learn that the Texas DeLorean company had sought to collect the royalties a few months before. Thompson said he didn't know how much DeLorean Texas collected in royalties, but he believed it was a six-figure sum.

Thompson said DeLorean Texas started out as a club for DeLorean owners. It sells used DeLoreans and DeLorean parts, and has proposed production of new, replica versions of the car, although that venture has yet to get off the ground, according to the Texas company's website.

Although the estate holds the commercial rights to the DeLorean name, it has not made much use of it over the years, while DeLorean Texas has been using the name for commercial purposes, which gives it certain rights, said Thompson.

More than 30 years after the movie's release, the Back to the Future name and the DeLorean time machine are still being licensed by companies such as Lego and Nike, Thompson added. He said Sally DeLorean feels DeLorean Texas has wrongly represented itself as the rightful owners of the company's intellectual property, and she wants to set the record straight, said Thompson.

“Any time they surface and overstep what we believe are their actual rights, she becomes concerned,” Thompson noted.

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Charles Toutant writes for the New Jersey Law Journal, an ALM affiliate publication of Entertainment Law & Finance. He can be reached at [email protected].