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Colorado Entity Estopped From Asserting Rights in Characters Created by Stan Lee

Thursday, September 12, 2013
By Anandashankar Mazumdar

Sept. 10 --An entity originally formed to manage Stan Lee's rights in the characters he created was estopped from bringing a copyright infringement claim against Walt Disney, the producer of recent films based on Marvel superheroes, the U.S. District Court for the District of Colorado ruled Sept. 5 (Stan Lee Media, Inc. v. Walt Disney Co., D. Colo., No. 1:12-cv-02663-WJM-KMT, 09/05/13).

Granting a motion to dismiss, the court found that issue preclusion, laches, and the statute of limitations all prevented the entity from bringing claims. 

Entity Created to Enforce Rights

Stan Lee (born Stanley Martin Lieber in 1922) was the co-creator--with Jacob Kurtzberg (p/k/a Jack Kirby) and Stephen J. Ditko--of many popular Marvel Comics characters, such as the Fantastic Four, the X-Men, Spider Man, the Hulk, Iron Man, the Avengers, and Thor.

Over the decades, Marvel characters have been the subject of numerous television programs and films, but in 1996, Marvel Entertainment Group Inc. created a subsidiary, Marvel Studios, to handle such projects.

In 1998, Lee assigned his rights in Marvel characters to Stan Lee Entertainment Inc. In 1999, Stan Lee Entertainment Inc. merged into Stan Lee Media Inc. of Denver, which subsequently claimed to own the rights in the characters created by Stan Lee. However, in the meantime, Lee had sent a letter to Stan Lee Media purporting to terminate the assignment and reassigned the rights to Marvel Entertainment.

The Walt Disney Co. of Burbank, Calif., is a media and entertainment conglomerate, whose holdings include Walt Disney Studios, one of the world's major motion picture producers. In 2009, Disney acquired Marvel Entertainment and, with it, Marvel Studios.

In 2012, Stan Lee Media sued Disney, alleging copyright infringement. Disney moved for dismissal under Fed. R. Civ. P. 12(b)(6) for failure to state a claim for which relief is available under the law. 

Entity Does Not Hold Rights

Judge William J. Martinez found that, pursuant to prior litigation, it had already been determined that Stan Lee Media did not hold the relevant copyrights and thus did not have standing to bring these claims against Disney.

The preclusive ruling was made in Abadiin v. Marvel Entm't, Inc., No. 1:09-cv-00715 (S.D.N.Y. Mar. 31, 2010), in the context of a shareholder derivative lawsuit. Abadiin ruled that the personal service contract through which Stan Lee Media asserted its rights was statutorily terminated in 2005. Furthermore, the claims were barred by laches, estoppel, and the statute of limitations.

The court found that the copyrights being asserted by Stan Lee Media in the instant proceeding were the same alleged rights that had been found unenforceable in Abidiin. Thus, the court found that Stan Lee Media had no valid copyright interest to assert. The court thus dismissed the complaint with prejudice.

Stan Lee Media was represented by James Ryan Molen of Greenberg Glusker Fields Claman & Machtinger LLP, Los Angeles. Walt Disney was represented by Frederick J. Baumann of Lewis Roca Rothgerber LLP, Denver.

To contact the reporter on this story: Anandashankar Mazumdar in Washington at amazumdar@bna.com

To contact the editor responsible for this story: Naresh Sritharan at nsritharan@bna.com


Text is available at http://www.bloomberglaw.com/public/document/Stan_Lee_Media_Inc_v_The_Walt_Disney_Company_Docket_No_112cv02663.

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