To World IP Day and beyond: how patents helped save Toy Story and inspire the next generation of filmmaking

World Intellectual Property Day is an excellent opportunity to focus on how intellectual property is a powerful tool for scientists discovering cures for deadly illnesses or inventors creating ever-smaller and more powerful computer chips. Just as important, however, is its starring role in helping artists create magic. The early days of one of the greatest creative hubs of our time, Pixar, provides a perfect illustration of how intellectual property can be a catalyst for storytelling and how with the right mindset, IP outsourcing can reap rich rewards.  

You’ve got a friend in intellectual property 

Nearly 30 years ago, the world was introduced to the first ever computer-animated film, Toy Story, which captured the hearts and imaginations of people of all ages and carved a new path for filmmaking, computer animation and patent technology. But what do creating the first ever computer-animated movies and building a patent licensing strategy have in common? A lot, from a financial perspective. You could say they go together like Woody and Buzz: great on their own, but unstoppable together. What some people may not know is that, without patents, Toy Story may not have ever existed.  

In the late 1980s, before becoming an animation studio, the then Pixar Image Computer sold animation hardware. It also created the Computer Animation Production System for Disney – binding the two studios close and also providing a major source of income for Pixar. Each Disney cel animation produced in the following years was executed using this system, having first been employed for one scene in The Little Mermaid in 1989 according to Ed Catmull in his 2014 book Creativity Inc.: Overcoming the Unseen Forces That Stand in the Way of True Inspiration. Pixar’s crowning jewel, however, was RenderMan, a revolutionary piece of graphical imaging software that became an industry standard and is still used today.

In his 2016 book To Pixar and Beyond: My Unlikely Journey with Steve Jobs to Make Entertainment History, Lawrence Levy recounts receiving a call in 1994 from none other than Steve Jobs, chair of Pixar at the time, asking for financial help. Pixar was bleeding cash and Levy was recruited to help solve this problem – without spoiling the creative culture. 

Pixar had developed many valuable patents in various different departments. Jobs believed that the company should sue every violator for $50 million, however, Levy suggested that they license the technology instead. 

As a result of this strategy, Pixar successfully received more than $13 million in emergency cash from licensing deals with Microsoft and Silicon Graphics, which they determined were infringing RenderMan patents. According to Levy, they could have sued, but what Pixar really needed was a quick infusion of cash so that it could finish producing Toy Story

In 1995, Toy Story took box offices across the world by storm, grossing $30 million in its opening weekend and setting new standards for creativity and innovation.

Ultimately, had it not been for patents and a strategy that allowed Pixar to quickly unlock their commercial value, Toy Story and Pixar may not have survived. By licensing the RenderMan patents to gain a quick cash infusion, Pixar was able to continue developing Toy Story and changed the trajectory of animation – an industry that is worth a whopping $15.34 billion today.  

What is more, Pixar successfully produced the first completely computer-animated feature film, paving the way for the future of animation and inspiring the next generation of innovative and creative filmmaking. 

IP and the arts 

This story teaches a valuable lesson – intellectual property can help make dreams come true. From fine art to pop music and comic books, artists and the technology wizards that work with them are an endless source of valuable intellectual property, which in turn can be used strategically to provide the financial resources to bring creative visions to life.   

This is an Insight article, written by a selected partner as part of IAM's co-published content. Read more on Insight

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