Could the X-Men and other characters created by Stan Lee belong to a Colorado company? That's the contention of a lawsuit filed here by locally based Stan Lee Media, Inc. against The Walt Disney Company. The suit claims SLMI is entitled to "billions of dollars of profits" from movies and more even though Lee hasn't been involved with the company for years -- one of many complications in this zany case. Get details and see the lawsuit below.
According to comic-book-related website Robot 6, Stan Lee Media emerged from the 1998 bankruptcy of Marvel, the firm with which Lee has long been associated. However, SLMI itself filed for bankruptcy in February 2001.
Five years later, after finally emerging from bankruptcy protection, SLMI filed a $5 billion lawsuit against Marvel, beginning a string of legal actions that continue to this day. Indeed, Robot 6 notes that Stan Lee Media and Lee himself "have sued each other on a few occasions." No surprise, then, that Lee has reportedly had no connection with his namesake firm for ten years-plus.
If that's the case, why on earth does Stan Lee Media believe it continues to hold the rights to Lee's creations? The new suit, filed by Denver's Brownstein Hyatt Farber Schreck, LLP, maintains that "In October 1998, Stan Lee assigned in writing the copyrights and all other rights in the comic book characters...that he had previously created or would create in the future to Stan Lee Entertainment, Inc.," the predecessor to Stan Lee Media. Then, in July 1999, Stan Lee Entertainment transferred all of its rights and interests "to a publicly owned Colorado corporation called Boulder Capital Opportunities," which was then renamed Stan Lee Media.
If that seems straight-forward, just wait. "Oddly," the lawsuit continues, "in November 1998, Stan Lee signed a written agreement with Marvel Enterprises Inc. in which he purportedly assigned to Marvel the rights to the Characters. However, Lee no longer owned those rights, since they had been assigned to SLEI previously. Accordingly, the Marvel agreement actually assigned nothing" -- and therefore, Disney, which subsequently acquired Marvel, doesn't own the characters, either.
The suit refers to a "somewhat tortured history" of litigation in Colorado, New York and California. But the document contends that "none of these rulings limit in any sense Plaintiff's claims herein." And those claims are doozies. The suit asks that Disney "account to Plaintiff for all gains, profits and advantages derived by Defendant by their infringement of Plaintiff's copyrights" -- a figure estimated to be in the billions. Plus, SLMI wants the maximum allowable statutory damages because Disney "intentionally infringed Plaintiff's copyrights."
Disney has already shrugged off the suit as being without merit, and the Hollywood Reporter agrees based on an August 23 decision by California federal Judge Stephen Wilson in regard to a 2007 SLM lawsuit. The reasons get technical, so we'll let the Reporter explain:
In the ruling, Wilson addressed why he wouldn't allow SLMI to go forward with a lawsuit against Stan Lee -- res judicata, which the judge defined as barring lawsuits based on "any claims that were raised or could have been raised in a prior action."
Wilson found that the lawsuit against Lee entailed an issue -- whether Lee transferred to Marvel the same IP rights previously assigned to SLMI -- that was previously addressed in a prior case. So the judge dismissed it.
The ruling is now on appeal at the 9th Circuit Court of Appeal.
Meanwhile, SLMI is now attacking Disney and likely will face that very same res judicata issue.
Here's the latest lawsuit, filed in U.S. District Court for the District of Colorado.
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