Judge slaps down Stan Lee Media's bid for Marvel characters

A federal judge on Thursday dismissed Stan Lee Media's multibillion-dollar lawsuit against Disney, potentially ending its long and confusing legal battle to claim ownership of the Marvel characters co-created by Stan Lee. The failed dot-com has had no connection to its co-founder and namesake in more than a decade; in fact, the two have sued each other on a few occasions.

As Deadline reports, in granting Disney's motion to dismiss the 2012 copyright-infringement complaint, U.S. District Judge William J. Martinez didn't attempt to hide his annoyance with the litigious Stan Lee Media, whose tangled web of lawsuits began it at least 2007, just months after the company emerged from federal bankruptcy protection.

"Plaintiff has tried time and again to claim ownership of those copyrights; the litigation history arising out of the 1998 Agreement stretches over more than a decade and at least six courts," Martinez wrote in his 11-page order. "Taking its cue from the Southern District of New York and the Central District of California, this Court holds that Plaintiff is precluded from re-litigating the issue of its ownership of copyrights based on the 1998 Agreement ..." He said it would be "futile" to permit Stan Lee Media to amend the lawsuit.

The dispute has its roots in Marvel’s 1998 bankruptcy, when CEO Isaac Perlmutter ended the $1 million-a-year lifetime contract with Lee, negating the legendary writer’s assignment to the company of his rights to his co-creations. It also freed Lee to form Stan Lee Entertainment, which later merged with Stan Lee Media, with infamous entrepreneur Peter F. Paul. That company in turned filed for bankruptcy in February 2001.

All of the lawsuits filed by SLM's shareholders hinge on a sequence of events that took place between August 1998, when Marvel terminated Lee’s employment, and November 1998, when Lee entered into a new agreement with the House of Ideas and signed over his likeness, and any claims to the characters. Stan Lee Media has long claimed that on Oct. 15, 1998, Lee transferred to that company the rights to his creations and his likeness (that's the "1998 Agreement" Martinez references in his order). SLM asserted in its 2012 lawsuit that neither Marvel nor Disney, which bought the comic company in 2009, ever registered Lee’s November 1998 agreement with the U.S. Copyright Office. Therefore, the plaintiffs argued, they actually own the Marvel characters and were owed $5.5 billion in profits from such blockbuster films as The Avengers, X-Men: First Class and Thor, and the Broadway musical Spider-Man: Turn Off the Dark.

However, Martinez agreed with Disney's claim that the 1998 agreement was vague -- it merely referred to comic book characters that Lee "had previously created or would create” -- and didn't provide Stan Lee Media with the proof of ownership of a valid copyright required to file a copyright-infringement lawsuit.

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