Films By Jove (FBJ), a Los Angeles based company, acquired worldwide distribution rights (excluding the former U.S.S.R) to Moscow's famous Soyuzmultfilm library in 1992. Over the years, FBJ invested millions of dollars digitally restoring and marketing the Soviet films, but court hearings ensued as Soyuzmultfilm changed its organizational status more than once and claimed it had sole ownership of all copyrights on its products.
FBJ co-owners Oleg Vidov and Joan Borsten, who are married, said in their open letter that the issue was not of prime importance just to them. They asked that the Russian government step in and settle the dispute, which has already assumed the proportions of a scandal.
Under the 1992 agreement, FBJ acquired distribution rights for 10 years, with the possibility of extending them up to 30 years. In 1994, in exchange for returning the films, when FBJ gave back 280 out of 360 hours of animation, the contract was prolonged for 20 more years.
In 1999, the Russian Film Ministry, which was later absorbed by the Culture Ministry, registered a new entity, which it also called Soyuzmultfilm and which it claimed was the sole owner of the copyrights.
A series of court hearings began between the original Soyuzmultfilm Studio and the new government entity, which has regularly been losing legal battles against the original studio.
The U.S. Federal Court for the Eastern District of New York ruled in August 2001 that FBJ properly licensed the rights in 1992. But the Russian Supreme Court of Arbitration overruled eight lower court decisions four months later.
It endorsed the government's position that in 1989 the original state studio did not, as previously thought, cease to exist when it was transformed into one of the quasi-private enterprises established during perestroika.
The court implied that the copyrights were never legally passed to the new entity, from which FBJ licensed them.