Disney withdraws request to stay former Digital Domain patent sale

By Caroline Salls

Pittsburgh, Jan. 11 - Walt Disney Studios Motion Picture Production has agreed to withdraw its motion for a stay of DDMG Estate's patent sale, according to a Friday filing with the U.S. Bankruptcy Court for the District of Delaware.

As a result, the sale will not be subject to any further stay and must close by 3 p.m. ET on the business day following entry of the agreed order.

According to the order, the appellees to the appeal of the sale order that Disney asked the court to stay cannot seek dismissal of the appeal based on mootness.

As previously reported, Walt Disney Co. entities Walt Disney Studios Motion Picture Production, Briar Rose Productions, Ltd. and Extinction Productions, Ltd. filed an appeal on Dec. 28 of a Dec. 10 ruling that DDMG Estate can sell its patents for creating three-dimensional motion pictures and that Disney holds no option to buy the rights.

In his Dec. 10 ruling in the dispute, judge Brendan L. Shannon wrote that Disney should have exercised its option before In Three, Inc. sold the patents to Digital Domain.

In Three held the patent on technology to transform two-dimensional digital images to three-dimensional images.

Digital Domain bought the patents from In Three and is seeking to sell the rights.

Absent a stay pending appeal, the Disney entities said they cannot be assured that a higher court will be able to resolve the question of whether DDMG's interests in the patents they purchased are subject to and limited by pre-existing licenses.

The Disney entities said this would require any subsequent sale of the patents in bankruptcy to remain subject to the pre-existing licenses.

DDMG was formerly Digital Domain Media Group, a Port St. Lucie, Fla.-based media company that filed for bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on Sept. 11. The Chapter 11 case number is 12-12568.

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