+1 212 318 2000
Europe, Middle East, & Africa
+44 20 7330 7500
+65 6212 1000
Oct. 22 —There was no error in a federal district court's dismissal of an action seeking to overturn a 10-year-old bankruptcy settlement involving the ownership of intellectual property rights to Conan the Barbarian, the U.S. Court of Appeals for the Ninth Circuit ruled Oct. 21 in an opinion designated as non-precedential and not for publication (Stan Lee Media, Inc. v. Conan Sales Co., 9th Cir., No. 12-55405, unpublished opinion 10/21/13).
This is the second loss in the space of two months on the part of Stan Lee Media Inc. to try to claim ownership of popular fictional characters. In another proceeding in September, a federal district court thwarted the company's attempt to wrest control over a series of Marvel Comics characters from the Walt Disney Co.
This case involved Conan the Barbarian, a fictional character created by Robert E. Howard (1906-1936) and first appearing in a series of stories published in periodicals starting in 1932. Since then, Conan has appeared in numerous media, including novels, comic books and movies.
Ownership of Conan and related copyrights eventually ended up in the possession of Stan Lee Entertainment Inc., which was founded by Stan Lee (born Stanley Martin Lieber in 1922), who is well-known for creating numerous popular comic book characters for Marvel Comics.
Stan Lee assigned his rights in Marvel characters to Stan Lee Entertainment Inc. in 1998. The next year, Stan Lee Entertainment was merged into Stan Lee Media Inc. of Denver. At some point, Stan Lee severed his relationship with Stan Lee Media Inc. and purported to reassign the IP rights to Marvel Entertainment Group Inc.
In 2000, Stan Lee Media entered into a stock purchase agreement transferring ownership of the Conan properties to Conan Sales Co. In 2001, Stan Lee Media entered into bankruptcy proceedings before the U.S. Bankruptcy Court for the Central District of California and Conan Sales asserted that Stan Lee Media had defaulted on its obligations under the stock purchase agreement.
Because of the existence of the bankruptcy proceeding, Conan Sales could not foreclose. Eventually, Conan Sales was able to reach an agreement with the unsecured creditors through which Conan Sales would get ownership of the Conan properties in exchange for $275,000. Stan Lee Media moved for approval of the settlement and in March 2002 the bankruptcy court issued an order approving it.
The bankruptcy proceeding was dismissed in 2006 and Stan Lee Media's shareholders then initiated a dispute alleging that Stan Lee, along with Stan Lee Media's officers Arthur M. Lieberman, Junko Kobayashi and Gill Champion had illegitimately exerted dominance over Stan Lee Media in order to transfer all its IP assets to a different entity.
In 2010, with a new board of directors, Stan Lee Media sued several entities and individuals, including Conan Sales, Kobayashi and Champion.
Stan Lee Media sought to have the bankruptcy settlement approval order set aside as void pursuant to Fed. R. Civ. P. 60. Judge Stephen V. Wilson of the U.S. District Court for the Central District of California dismissed the action. Stan Lee Media appealed.
In a per curiam opinion, the court reviewed the matter de novo and found that the settlement order was not void. Stan Lee Media had not produced sufficient evidence to establish that Kobayashi or Lieberman had acted with adverse domination. Furthermore, the court found that Kobayashi had been duly authorized to act for Stan Lee Media.
The court also found that the notice of the settlement had been adequate and that, furthermore, the settlement did not constitute a disguised sale. Thus, the court said, the shareholders of Stan Lee Media had not been entitled to notice.
Finally, the court found no abuse of discretion on the part of the district court. The court thus affirmed dismissal.
The appellate panel comprised Judge Harry Pregerson, Judge Kim McLane Wardlaw, and Judge Richard C. Tallman.
Stan Lee Media was represented by Christopher F. Graham of McKenna Long & Aldridge LLP, New York. Conan Sales was represented by Sacha V. Emanuel of Los Angeles.
To contact the reporter on this story: Anandashankar Mazumdar in Washington at email@example.com
To contact the editor responsible for this story: Naresh Sritharan at firstname.lastname@example.org
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).