Tangible_Property

Significant properties involved in the Walt Disney Corporation merger with Marvel Comics, Inc. They types of business property that Disney and Marvel deem significant are very similar. Disney and Marvel exist mainly as a character-based entertainment and licensing businesses. Both companies rely a great deal on merchandising and licensing opportunities that are a result of their intellectual properties, the majority being characters (Deraiche, 2009). Intellectual property is classified as an intangible asset. An intangible asset is non-physical and provides for the promise of particular rights and privileges and potential economic profit for the owner (Vickery). Intellectual property can even be protected as a basic human right. “According to Article 27 of the Universal Declaration of Human Rights (1948), “Everyone has the right to the protection of the moral and material interest resulting from any scientific, literary or artistic production of which he is the author” (Averill, 2005, p. 1032). The Disney Company is a unique entertainment entity as it possesses many tangible assets which are a direct result of their intellectual property. For example they own motion picture studios that produce movies, theme parks, and a publication company that operate and create works based upon their intellectual properties. As Disney has merged with Marvel, they have inherited the following intellectual properties: numerous trademarks, copyrights, franchise agreements, license agreements, brand names and logos. Disney now possesses over 5,000 of Marvel’s trademarked character identities alone (Goldman, 2009). These trademarked Marvel comic book characters can be considered distinctive because they have acquired their distinctiveness through a secondary meaning (Ferrera, Lichtenstein, Reder, Bird & Schiano, 2004). For example, when a person hears the name of “Spider Man” or “The Hulk” it is assumed they will associate the names to comic book characters because they have acquired recognition through a secondary meaning. The more identifiable and developed characters provide the most potential economic profitability for Disney. This valuation of the newly acquired intellectual property by Disney falls into the “income approach” to determine the value. The income approach to determine value focuses on potential benefits which can be realized from a distinct intangible asset but also comprehends the inherited risk (Vickery). Obtaining the copious amount of copyrighted and trademarked intellectual property from Marvel also presents the opportunity for Disney to realize cost savings from potential royalty payments. “Relief From Royalty” is an idea based upon the hypothetical royalty payment Disney would have to pay Marvel to utilize the rights and benefits of their intellectual property for commercial gain (Citation Needed). References Averill, M. (2005). “Intellectual Property.” Encyclopedia of Science, Technology, and Ethics. Ed. Carl Mitcham. Vol. 2. Detroit: Macmillan Reference USA. 1030-1034. Deraiche, F. (2009, September 20). Marvel and Disney: A Merger with Character. Illinois Business Law Journal. Retrieved March 9, 2010 from the Illinois Business Law Journal Web site: http://www.law.uiuc.edu/bljournal/post/2009/09/20/Marvel-and-Disney-A-Merger-with-Character.aspx. Ferrera, G. R., Lichtenstein, S. D., Reder, M. E. K., Bird, R. C., & Schiano, W. T. (2004). CyberLaw: Text and cases (2nd ed.). Mason, OH: Thomson. Goldman, D. (2009, August 31). Disney to buy Marvel for $4 billion. CNNMoney.com. Retrieved March 8, 2010, from CNNMoney.com Web site: http://money.cnn.com/2009/08/31/news/companies/disney_marvel/index.htm Vickery, F. Intellectual Property and Intangible Assets. Retrieved March 9, 2010 from Sanli Pastore & Hill, Inc. Web Site: http://www.sphvalue.com/pdf/Intellectual.pdf