High profile legal action in the comics world is becoming something of a regular event now. In recent months there was May's class action law suit file by a San Francisco comics retailer against Marvel Comics. In October Neil Gaiman won his court battle fellow creator Todd McFarlane, seen as a stunning victory for Gaiman. Last week was the beginnings of what could potentially be the biggest.
Just last week Marvel's quarterly report was filed with the SEC and one surprising section of this report popped out amongst all the others:
Threatened Action. The Company has received a written claim by Stan Lee,Chairman Emeritus, asserting the threat of litigation, in the event the Companyfails to pay him 10% of the profits derived by the Company from the profits ofthe movies and television programs (including ancillary rights) utilizing theCompany's characters, as provided in the Employment Agreement between theCompany and Mr. Lee dated as of November 1, 1998. Pursuant to the terms of theEmployment Agreement, the Company is currently paying Mr. Lee a salary of $1million per year and believes that Mr. Lee's claim is without merit. If Mr. Leecommences suit, the Company intends to vigorously defend such action.
On Tuesday that threat became action. According to the LA Times, Lee has filed a lawsuit against the company he helped build, Marvel Comics, seeking 10 Million Dollars in damages. The law suit alledged Marvel has reneged on promise to pay him 10% of the profits from movies and television shows based on his characters, as detailed in his work agreement:
In addition, you shall be paid participation equal to 10% of the profits derived during your life by Marvel (including subsidiaries and affiliates) from the profits of any live action or animation television or movie (including ancillary rights) productions utilizing Marvel characters. This participation is not to be derived from the fee charged by Marvel for the licensing of the product or of the characters for merchandise or otherwise. Marvel will compute, account and pay to you your participation due, if any, on account of said profits, for the annual period ending each March 31 during your life, on an annual basis within a reasonable time after the end of each such period.
The timing is not "uncanny" as this filing takes place in the same year that Marvel saw it's biggest success on the silver screen. The "Spider-Man" film grossed over $400 million domestically and last weeks release of the DVD and video set sales records, as expected.
According to the Times, "The publisher said in a statement Tuesday that Lee is 'well compensated' and that the company 'believes it is in full compliance with and current on all payments due under the terms of Mr. Lee's employment agreement.'"
For a detailed account of the filing check out Matt Brady's report at Newsarama.