Housing, IP, and Disney

A New York Times article from last week reports on the convergence of housing, intellectual property, and the Walt Disney Corporation in a recently built suburban home near Salt Lake City:

The sherbet-colored structure sits at the intersection of Meadowside Drive and Herriman Rose Boulevard here, but you don’t need directions to find it. Just look for the swarm of helium-filled balloons that the developer tied to the chimney of a house that has a gabled roof, scalloped siding and a garden hose neatly coiled next to the porch — all details taken from “Up,” the 2009 hit about an old man and his flying abode.

Developer Blair Bangerter duplicated Pixar’s Up house with as much fidelity as physical reality would allow.  And he got permission to do this from Disney!  As the article notes, getting such permission from Disney is highly unusual:

This is a company that once forced a Florida day care center to remove an unauthorized Minnie Mouse mural. More recently, Disney told a stonemason that carving Winnie the Pooh into a child’s gravestone would violate its copyright [though it later “reversed its ruling on that Winnie the Pooh tombstone after the news media reported the rejection”].

So how is a homebuilder in this Salt Lake City suburb getting away with selling a near-identical copy of the floating house in the Disney-Pixar film “Up”?

Although Disney declined to comment for the story, the article suggests several reasons:

  • The developer is the son of a former Utah governor.
  • The developer was able to convince Up‘s director, Pete Docter, to “personally intervened on behalf of the project.”
  • Disney “is trying to evaluate with more care the hundreds of requests it receives a month from people wanting to use its characters and imagery.”

Taking these suggested reasons at face value, it sounds like Mr. Bangerter obtained permission primarily because (a) he was well-connected and (b) Disney sensed a PR opportunity.  There are at least two ways of interpreting this:

  1. Bangerter and Disney saw a market opportunity and bargained to create value.  Most homes in the subdivision are priced around $300,000; the Up home is listed at $400,000.  Disney is often seen as an IP bully; it now looks a bit nicer.  Thus, a deal between Bangerter and Disney created almost $100k in new economic value for the developer and (possible) new goodwill towards Disney.
  2. IP is being used here to create an unnecessary monopoly rent to benefit the already well-connected.  It’s hard to see how Disney would suffer any economic loss if everyone were free to build Up houses–Disney is in the business of selling media and related merchandise, but generally not houses.  However, since everyone is presumably not free to build Up houses, Bangerter and Disney had to spend time and money hammering out an agreement.  As a result of their agreement, Bangerter (apparently) gets ~$100k more for the Up house than he gets for comparable houses in the subdivision, and Disney successfully pacifies a politically powerful developer.

Especially insofar as Disney only considers such deals with well-connected developers like Bangerter, the IP issues quickly blur into fairness issues.

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