Disney Ducks Pooh Bear Trademark Challenge

WASHINGTON (CN) - The Federal Circuit affirmed Walt Disney Co.'s ownership of the Winnie the Pooh trademarks, sidelining claims over a 1930 sale of the rights to Pooh Bear.

A.A. Milne, the author who created Pooh, sold exclusive merchandising rights based on the works to cartoon pioneer Stephen Slesinger in 1930. Slesinger died in 1953, and eight years later his eponymous company, controlled then by his widow, sold Walt Disney Productions the rights from the 1930 agreement.

The company reaffirmed this transfer in a 1983 agreement. Disney went on to market Winnie as its most profitable character.

Litigation between Slesinger's heirs and Disney has been ongoing since 1991.

When a California judge dismissed the first lawsuit in 2005, it noted that Stephen Slesinger Inc. had hired a private investigator to break into Disney offices and steal thousands of documents.

Stephen Slesinger Inc. lost its subsequent appeal, and a federal judge dismissed another attempted lawsuit in 2009.

Over the last six years, the company also filed 12 opposition and cancellation proceedings with the Trademark Trial and Appeal Board of the U.S. Patent and Trademark Office. These actions sought to cancel Disney's applications to register the marks including "Pooh," "Winnie the Pooh," "Classic Pooh," and "My Friends Tigger & Pooh."

In support of the actions, Stephen Slesinger Inc., or SSI, claimed that the Disney agreement is a license, which does not grant Disney the right to register the marks.

The trademark board consolidated the actions and dismissed them with prejudice, on the basis of collateral estoppel, which prevents litigants from bringing up issues that have previously been litigated.

A divided three-judge panel of the Federal Circuit affirmed.

"The board correctly applied collateral estoppel to prevent Slesinger from asserting a claim that its 1983 grant of rights to Disney was a license as opposed to an assignment," Chief Judge Randall Rader wrote for the court.

In his dissenting opinion, Judge Jimmie Reyna argued that SSI should have been allowed to dispute trademark ownership of the trademarks.

"Because the court could have disposed of Slesinger's infringement claims solely on the basis that Disney was authorized to use the Pooh trademarks, it is clear that a decision on ownership of the rights was not essential to the court's judgment on infringement," Reyna wrote. "This alone is sufficient to preclude the application of collateral estoppel."

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