Stan Lee Media loses appeal, sees hope for lawsuit against namesake

Stan Lee Media, which just last month lost its bid to reclaim the rights to Conan the Barbarian, has been dealt another setback as an appeals court upheld a lower court's decision preventing the failed dot-com from intervening in Stan Lee's decade-old lawsuit against Marvel as part of an effort to gain control of the writer's most famous co-creations.

However, Hollywood, Esq. reports the company hopes today's ruling by the 2nd Circuit Court of Appeals will pave the way for pending action in California against its namesake and co-founder, whom it claims improperly transferred rights to such characters as Spider-Man, the X-Men, Iron Man, the Avengers and Thor from Stan Lee Media to Marvel. A judge had stayed the lawsuit last year pending the 2nd Circuit decision.

Lee sued Marvel back in 2002, claiming the company breached a conditional assignment of his copyright in Spider-Man when it failed to pay him 10 percent of profits from Columbia Pictures' Spider-Man movie. He received a partial summary judgment before entering into a confidential agreement with Marvel. Stan Lee Media attempted to intervene in the dispute as the real party of interest, but was rejected by the judge because the company had gone into bankruptcy the previous year, and none of the shareholders could demonstrate they had legal standing or the authority to represent SLM.

The winding, complicated fight between Stan Lee Media, Stan Lee and, sometimes, Marvel dates back to the comics giant's own bankruptcy: In 1998, Marvel CEO Isaac Perlmutter used bankruptcy procedures to end Marvel’s $1 million-a-year lifetime contract with Lee, negating Lee’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 now-infamous entrepreneur Peter F. Paul. The company filed for bankruptcy in February 2001. Stan Lee Media's claims 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 company and signed over his likeness, as well as any claims to characters. But representatives of SLM claim that on Oct. 15, 1998, Lee transferred to that company the rights to his creations and his likeness.

Stand Lee Media has struggled since emerging from bankruptcy in November 2006 to regain some of the money and glory from the heyday of the Internet bubble, primarily through lawsuits claiming the improper transfer of intellectual properties. Two SLM shareholders sued Stan Lee, Marvel and others in 2009 for more than $750 million -- about half the estimated proceeds from Marvel's movies -- but they were later determined to lack standing. An appeal was dismissed in late 2010, followed in February 2011 by a ruling that the plaintiffs’ motions were time-barred, as they come a decade after the alleged injury. But that same month, a California judge cleared the way for Stan Lee Media's new board to filed a consolidated complaint, but only against Lee, POW! Entertainment and QED Productions.

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