Muppet-Baby Mama Drama | Vanderbilt Journal of Entertainment & Technology Law

kermitFor those of you who have always wanted to rage on the drums with Animal, ask Oscar why in the world he doesn’t get out of that trash can and get a job, or break it to Miss Piggy that things with Kermit are just never going to work out, I have some good news — you don’t have to venture to Sesame Street to bump elbows with your favorite Muppet. Thanks to the wonderful world of Disney and its partnership with FAO Schwarz, you can invoke your inner Jim Henson and create your own Muppet with one click of a mouse. Much like the “Build-A-Bear” franchise, the “Muppet Whatnot Workshop” offers a fun, interactive experience by providing users with an array of choices — from clothing accessories to hair styles — to give their Muppet character. If you’d rather do your designing at the “Happiest Place on Earth” rather than on your laptop, fret not. Disney is currently in the process of constructing Muppet Whatnot Workshops at Disneyland and Walt Disney Resorts.

If you’re thinking the idea of bringing your own little Muppet into the world is genius, you’re not alone. Debutts Marcus Productions (“DMP”), owned by Russell Marcus (the former producer of the hit 90s show “Married with Children”), recently filed a lawsuit in the Los Angeles Superior Court against the Walt Disney Company, the Jim Henson Company, and The Muppets Studio, claiming that this cash-cow idea of designing your own Muppet is actually Marcus’s, and that he is entitled to royalties. In his complaint, Marcus alleges that at some point in 1998, he entered into an agreement with Tadpole Productions, the department of the Jim Henson Company responsible for product development, whereby Marcus would create Muppet television shows with the understanding that he would become increasingly involved in expanding the Muppet brand over time. Marcus claims that his idea for the Muppet design Workshop materialized in 2002. In 2001, Marcus alleges that DMP and the Jim Henson Corporation entered a written contract in which the Jim Henson agreed to pay Marcus 2.5% of any profits received in exchange for the use of his “Muppet Workshop” idea.

All was well in Muppet land until the Mouse entered the picture in 2004, and Disney purchased the Muppet franchise from the Jim Henson Co. for an undisclosed amount. Marcus claims that he met with Disney “higher-ups” who promised to honor his agreement with the Jim Henson Co., and keep him involved in the Muppet brand. However, the basis for the lawsuit was born when Disney permitted FAO Schwarz to use Marcus’s idea for its virtual “Muppet Whatnot Workshop” without paying Marcus his 2.5% of the revenues generated therefrom. In defense of its actions, Disney claims that because it has not made any money from the “Muppet Whatnot Workshop” in any way, it is under no contractual obligation to pay Marcus royalties. Marcus clearly isn’t buying it, as he is seeking compensatory damages for Disney’s breach of contract, fraud, deceit, and unjust enrichment.

Given that FAO Schwarz charges $129.99 a pop to make your own Muppet, and the Walt Disney Co. is famous for being a well-oiled money-making machine (its current market value is 61.17 billion), I find it extremely hard to believe that Disney has not made a dime off of Marcus’ idea. It will be interesting to see how Cookie-Monster’s proverbial cookie will crumble in this legal battle.

Casey McLaughlin

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