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Comment by car_analogy | Hacker News Reader

It is utter nonsense, let me show why:

1: Acquire a license for ARM/x86/ISA and patents of your choice, at a license fee of 20,000$ / CPU-sized-die.

2: (Declare bankruptcy), sell the "asset" of being allowed to use the ISA, but not the "liability" of having to pay any fees.

In other words, it would make literally all contracts meaningless, since you're only ever one (shell) company restructuring away from keeping only the parts of the contract you want, and discarding any obligations.

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This doesn't happen between corporations because they are powerful and savvy. All the terms of a contract are reviewed in detail by the lawyers. Objectionable terms are negotiated and changed. The same is true for wealthy directors and actors.

But how much power does an individual have when signing a contract with a media giant? The contracts are probably "take it or leave it". You may not be able to afford a lawyer to review the contract in detail and if you do and they flag something, you cannot make Disney change the term.

Disney isn't arguing that there is a clause in these specific contracts that allows them to split liabilities and assets. They're arguing that they can do so generically, to any contract.

So being a big corporation with lots of lawyers wouldn't help - no matter what clauses they insert in a contract, they can be discarded as "liabilities".

Usually contracts have clauses about what happens in case of a merger or acquisition [0]. If you are powerful, say a wealthy star or a big corporation, you can push for terms that are favourable to you. If you are not, you have to sign whatever they put in front of you or walk out. I guess in this case, there was a clause in the contract that was most favourable to the company and least to the contributor.

[0] For examples, look at any SaaS company's privacy policy. Here is Figma's:

If we are involved in a merger, acquisition, financing due diligence, reorganization, bankruptcy, receivership, purchase or sale of assets, or transition of service to another provider, then your information may be sold or transferred as part of such a transaction, as permitted by law and/or contract.

https://www.figma.com/privacy/

> Usually

So has Disney, the writers, or anyone pointed to such a clause in this case?

That's a good question. What has Disney publicly said about this case? I don't know where to look for their official public communications.

IIRC, Disney wanted the writer to sign an NDA before they'd even negotiate to pay him what they owe. So giving their silence the benefit of the doubt now goes beyond charity and firmly into idiocy.

Has the writer posted the text of the contract somewhere? Is the text of the contract under NDA? I am asking because media companies (film, music, anything really) screwing over artists in contracts is fairly commonplace. Them ignoring contracts altogether and just doing whatever is not something I had heard of before. In the absence of other information, I lean towards believing they had snuck a term into the artist's contract allowing them to do what they have done here, because that's their MO. If you think that makes me an idiot, so be it.

That's why IP licenses usually have a termination clause for failure to pay licensing fees and often have a non-transference clause.

And for real assets you keep a "security interest" that allows you take the proceeds of the asset sale.

I understand your example, but it's not very convincing. Purchasing a license for use seems extremely different from a book scenario for licensed material, where I imagine Lucasfilms owned the actual book and its contents.

I suppose my question wasn't very precise. There are lots of contracts for licenses and the like that state they are non-transferable. Imagine you did not put that in there. Is there some sort of contract law backstop to prevent this from happening then?

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