PHOENIX (CN) — After an unsuccessful trip to the U.S. Supreme Court, a long-running dispute over a Spider-Man "Web-Shooter" toy has been reborn in Phoenix, where a man claims his former partners owe him $7 million in profits.
Eduardo Moros sued Stephen Kimble and Robert Grabb in Federal Court on May 27, claiming he helped design the toy and signed a contract with Kimble and Grabb, who then pushed him out of the toy's development, marketing and sale of rights to it.
"Defendants' acts and omissions in keeping Moros in the dark regarding the facts surrounding the Web-Shooter were inconsistent with and adversely impacted Moros' reasonable expectations, and prevented him from earlier asserting his rights under the agreement," according to a 13-page complaint.
Kimble sued Marvel Entertainment in a 1997 patent complaint involving the string-shooting toy, and sued again in 2008, with Grabb, for more royalties. The Ninth Circuit "reluctantly" rejected their appeal after they lost in Federal Court, but in December 2014 the Supreme Court agreed to consider the case.
The Supreme Court heard arguments on March 31, 2015, but ruled against Kimble and Grabb in June that year.
In the latest episode of the saga, Moros says he was pursuing a Ph.D. in mechanical engineering at the University of Arizona in the 1980s, when he and Kimble, an attorney, became friends. He says they developed a concept and design for what they called a Spider-Man Web-Shooter, which uses cans of "Silly String" to simulate the comic hero's ability to shoot webs from his palms.
Grabb, a Tucson attorney, wrote the original March 1990 contract that acknowledged Moros and Kimble's joint development of the toy and set terms of income and expenses associated with it, according to the complaint.
Moros says that while he pursued his doctorate, Kimble and Grabb obtained a patent in December 1991, with Kimble claiming to be the sole inventor. He says they promised to keep him "advised" about development and marketing, but he never heard from them again.
Toy Biz, a predecessor to Marvel Enterprises, later began marketing the "Web Blaster," triggering Kimble's 1997 patent infringement lawsuit in Phoenix.
Kimble claimed the toy was based on ideas he'd developed and introduced to Toy Biz in December 1990. He claimed that Toy Biz promised to keep his disclosures confidential and to compensate him if it used the information.
That lawsuit was settled in 2001, with Toy Biz, now Marvel, agreeing to buy the rights to the Web-Shooter for $516,214.62 and to pay Kimble and Grabb a 3 percent royalty on sales.
Moros says he learned of the settlement in March 2015, through news reports of the second lawsuit, challenging Marvel's refusal to continue paying royalties after the toy's patent ran out. That lawsuit made it to the Supreme Court.
Now Moros claims Kimble and Grabb were obligated by their 1990 contract to apprise him of the toy's progress and to pay him a percentage of profits.
"These defendants never once disclosed to Moros the existence of the agreement with Marvel and, to date, have never shared with Moros any of the fruits of the parties' contract — an amount totaling approximately $7 million," according to the complaint. "Moros brings this action to recover his fair share of income he is entitled to under the agreement — offset by his pro-rata share of reasonable expenses incurred by defendants — that defendants have wrongfully retained in breach of their legal and equitable obligations."
Moros says he's asked the defendants for his share, but they have "stubbornly refused to honor that obligation under the agreement," forcing him to sue.
He claims he is owed 20 percent of the money Kimble and Grabb received from Marvel under the 1990 contract: more than $1.2 million.
He also seeks damages for breach of contract, unjust enrichment, conversion and breach of faith.
Moros' attorney, Christopher Zachar, was traveling and unavailable for comment.
In their 2008 lawsuit, Kimble and Grabb argued that Marvel had breached the settlement by failing to pay royalties after it sold its toy-making arm to Hasbro.
Marvel claimed that the settlement did not require it to pay Kimble after his patent expired in 2010. A federal judge ruled for Marvel, and Kimble appealed to the Ninth Circuit, arguing that the settlement had transferred patented and non-patented rights, both at 3 percent, and that the non-patented rights did not end when the patent ran out.
After the Ninth Circuit said it "reluctantly" had to side with Marvel, the ensuing Supreme Court battle hinged on whether justices should overturn Brulotte v. Thys Co., a 1964 decision prohibiting licensing agreements that require royalty payments beyond the patent's life.
A six-justice majority affirmed in June 2015, citing stare decisis: that the incorrectness of precedent is not by itself enough to overrule.
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