Republican-led bill targeting Disney's Mickey Mouse 'can't possibly pass': Lawyer

Following Disney's (DIS) public battle with Florida Governor Ron DeSantis, who revoked the company's special tax district after it vowed to help repeal the Parental Rights in Education Act (or what critics have dubbed the "Don't Say Gay" bill), the entertainment giant is now fighting another Republican lawmaker.

Earlier this week, Missouri Senator Josh Hawley proposed legislation limiting copyright protections to 56 years. The bill would also apply retroactively to firms with a market capitalization above $150 billion that operate in the motion picture industry.

Hawley admitted on Twitter that the new legislation was created in an effort to target "woke" Disney and its slew of animated characters, most notably Mickey Mouse.

Since 1928, the original Mickey Mouse, which appeared in the animated short film "Steamboat Willie," has been protected under copyright law. Disney has twice lobbied Congress for extensions, therefore allowing the media giant 94 years of exclusive rights to media and merchandise.

But in 2024, the copyright protection for that particular image of Mickey Mouse is set to expire. It will then be released into the public domain for artists and creatives to utilize in their work.

For context, Disney pulled in more than $5.2 billion in retail sales and merchandise licensing (toys, apparel, games, home décor, and other products) last year, an 11 % increase compared to 2020. It is not known how much of that bucket specifically came from the sales of Mickey Mouse-branded items.

Hawley, who is also a constitutional lawyer, is part of a larger Republican-led effort to ensure that Disney is not granted further copyright extensions. His legislation would also strip Disney of those protections as soon as this year.

How we got here

But some legal experts say the bill will never pass, slamming it as unconstitutional.

Originally, copyright protections in the U.S. only lasted for a period of 28 years. A provision was later added that allowed certain works, if still commercially viable, to renew their protections for another term of 28 years, thus creating a max-protection window of 56 years.

In 1988, the U.S. enacted the Berne Convention Implementation Act, which amended the copyright law to one term of life on the part of the author, plus 50 years. This new legislation resulted in an effort to hep the U.S. keep up with the rest of the world, which was significantly more advanced when it came to copyright laws and protections.

For corporate entities (which live forever) copyright protections were updated to exist for 75 years from the time the work was created.

Flash forward to 1998 when then-President Bill Clinton signed the Sonny Bono Copyright Term Extension Act, which increased protections to life of the author, plus 70 years. Consequently, corporate copyright terms were changed from 75 years of fixation to 95 years of fixation.

Disney was part of that corporate lobbying push and was documented to have donated significantly to federal candidates at the time of the legislation's voting; thus causing the act to be known as the "Mickey Mouse Protection Act."

Still, some lawyers argue that that colloquial interpretation does not represent the true motivation of the law.

"Certainly Disney was part of that corporate lobbying effort, but it wasn't a bill designed to specifically keep 'Steamboat Mickey' out of the public domain," explained trademark attorney David Leichtman.

"It was to keep the U.S. in step with what the rest of the world was doing on copyright...most of the countries in Europe had already moved their terms from life plus-50, to life plus-70," he continued.

Disney has not yet publicly commented on the matter, but, so far, there hasn't been any indication that the company plans to lobby for a third time to extend its Mickey Mouse copyright protections.

Experts say it's unlikely that there will even be an appetite to pursue a third extension due to the difficult nature of passing copyright legislation, in addition to the fact that the U.S. is now on par with international norms when it comes to overall copyright protections.

Why Sen. Hawley's bill 'can't possibly pass'

Lawyers say it is incredibly unlikely that the bill will pass since Hawley's proposition of just 56 years of protection goes back to pre-1988 law.

"It can't possibly pass, and no president would ever sign it — whether they're Democrat or Republican — because it puts the U.S. out of step and at a competitive disadvantage with the rest of the world," Leichtman affirmed, adding it would have "really horrible impacts on actual real artists and smaller companies" moving forward.

Furthermore, Hawley's retroactive clause, which targets firms with a market capitalization above $150 billion, is considered unconstitutional in that it violates a bill of attainder — legislation that makes it unlawful to directly target and punish a small group of people or companies.

"He's just doing it for publicity," the attorney continued.

Laurence Tribe, a constitutional law professor at Harvard University, agreed, saying, "This requires no implication. It's open and shut. The U.S. Supreme Court would vote nine to nothing that this an unconstitutional taking."

He added that the bill, in addition to violating the bill of attainder, would also be in "violation of the basic principles of free speech and of the First Amendment," citing the politically-motivated nature of its inception.

The professor went on to explain that it would also violate the Fifth Amendment, which says that no private property should be taken for public use without just compensation.

Tribe told Yahoo Finance that, since the copyright has not yet expired under existing law, "it's a form of property."

"Intellectual property is every bit as much property as brick and mortar and land, and it can't be taken for any public benefit or public justification without just compensation," he continued.

Yahoo Finance reached out to the office of Sen. Hawley for comment but has yet to hear back.

Even if the bill hypothetically were to pass (and not be overturned), it wouldn't have any real, tangible impact on the company, Leichtman said.

"The copyright that will enter the public domain in 2024 is just the 1928 'Steamboat Mickey,' which is rarely used at this point by Disney," Leichtman noted, adding that the company will still have copyright protections on its most recent iterations of Mickey, which are more valuable.

Secondly, "Disney has very strong trademark rights on Mickey Mouse. Trademark rights live forever, as long as you continue to use the mark in commerce," the attorney said.

Consequently, as long as Disney sells branded-products that feature 'Steamboat Mickey,' the public cannot sell that image in the same way since it would be in violation of those rights.

Ultimately, Hawley's bill "is going nowhere," Leichtman reiterated, although it does represent yet another moment of Disney getting caught in the crossfires of politicians — all due to its response to Florida's Parental Rights in Education Act.

The controversial bill, which will go into effect on July 1, states, "Classroom instruction by school personnel or third parties on sexual orientation or gender identity may not occur in kindergarten through grade 3 or in a manner that is not age appropriate or developmentally appropriate for students in accordance with state standards." Parents will be able to sue districts over violations.

Disney CEO Bob Chapek initially decided not to speak publicly on the matter, opting instead to work behind the scenes in an attempt to soften the legislation. It didn't work.

The executive eventually reversed course following intense backlash over his belated response to the bill. He publicly denounced the act during the company's annual shareholder meeting on March 9, in addition to directly apologizing to employees in a company memo.

Chapek, whose contract expires on February 28, 2023, has dealt with a fair amount of controversy during his tenure. In addition to the DeSantis drama and "Don't Say Gay" fallout, the executive came under further scrutiny following a now-settled breach-of-contract lawsuit with "Black Widow" actress Scarlett Johansson last summer.

Disney, which reported second quarter financial results on Wednesday that missed on both the top and bottom lines, has seen shares fall more than 30% year-to-date.

Alexandra is a Senior Entertainment and Food Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 or email her at alexandra.canal@yahoofinance.com

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