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Stan Lee Media sues Disney for billions over Marvel characters

by  in Comic News Comment
Stan Lee Media sues Disney for billions over Marvel characters

Undeterred by numerous legal setbacks, failed dot-com Stan Lee Media on Tuesday filed a $5.5 billion copyright-infringement lawsuit against Disney, claiming the entertainment giant doesn’t actually own the Marvel characters featured in such blockbuster films as The Avengers, X-Men: First Class and Thor, and the Broadway musical Spider-Man: Turn Off the Dark.  The dollar amount reflects the estimated revenue from box-office receipts, licensing and merchandising dating back three years, the statute of limitations for copyright infringement.

The complaint, filed in federal court in Colorado and first reported by Deadline, has its roots in Marvel’s 1998 bankruptcy, when CEO Isaac Perlmutter ended the $1 million-a-year lifetime contract with Stan 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; just four months after SLM emerged from protection in November 2006, shareholders filed a $5 billion lawsuit against Marvel. Stan Lee Media 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.

That 2007 action, and virtually every one since then, hinges 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. SLM asserts in the latest lawsuit that neither Marvel nor Disney, which bought the comic company in 2009, has ever registered Lee’s November 1998 agreement with the U.S. Copyright Office.

In what makes for entertaining reading, SLM retraces the tangled web of lawsuits — the company characterizes it as a “somewhat tortured history” –which zigzags through at least three jurisdictions and spans more than five years, right up to Aug. 23, 2012. It’s that last date The Hollywood Reporter contends could signal doom for the company’s current action. In the August decision, U.S. District Judge Stephen Wilson dismissed a 2007 SLM claim against Lee and his POW! Entertainment, citing res judicata, which the judge said barred any lawsuits based on “any claims that were raised or could have been raised in a prior action.”

Stan Lee Media has appealed Wilson’s ruling to the Ninth Circuit, but considering the company’s “somewhat tortured history” of courtroom defeats, that avenue doesn’t look promising. However, the plaintiff seems to be pinning its hopes on the argument that, because Disney didn’t enter the picture until 2009, the court will view its conduct as separate from the 2007 lawsuit.

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