Happy Ending for Disney in Stan Lee Media Face-Off


     DENVER (CN) – Stan Lee Media cannot take copyright claims against Disney that failed in other districts and try to make them stick in Colorado, a federal judge ruled.
     The company believes that it owns the rights to Spider-Man, the Incredible Hulk, the X-Men and other Marvel Comics superheroes created by Stan Lee, and has tried to prove it in court for more than a decade.
     It sued The Walt Disney Company nearly a year ago in Colorado, claiming to be “entitled to the billions of dollars of profits” Disney has made off of Lee’s creations since it bought Marvel in 2009.
     The crux of Stan Lee Media’s argument is that Lee had actually given his namesake company the rights to his characters in 1998, only to “oddly” transfer the same to Marvel weeks later. Stan Lee Media claimed that the second agreement is void because it was never publicly recorded.
     Disney countered that Stan Lee Media “is precluded from re-litigating the issue of its ownership of the copyrighted comic book characters based on the 1998 agreement, because that issue has been decided against plaintiff in several prior cases,” the court noted.
     U.S. District Judge William Martinez agreed with Disney Thursday, noting an adverse decision Stan Lee Media received in Manhattan three years earlier that also centered on the disputed agreement.
     In that case, Abadin v. Marvel Entertainment, a federal judge found that the statute of limitations had run out on Stan Lee Media’s copyright claims. Since then, other districts have cited Abadin in saying that the company is precluded from asserting ownership rights under the 1998 agreement.
     Martinez deferred to these prior judgments and dismissed the complaint with prejudice.
     “After the Abadin court determined that plaintiff was barred from exercising the copyrights conferred upon it in the 1998 agreement, the court cannot allow plaintiff to re-litigate the same issue in an attempt to revive its claim to ownership of those copyrights,” Martinez wrote. “While the claims asserted in Abadin and the other prior cases differ from the copyright infringement claimed here, all involve the issue of whether the 1998 agreement gave plaintiff ownership of the copyrights to comic book characters created by Lee. Plaintiff has tried time and again to claim ownership of those copyrights; the litigation history arising out of the 1998 agreement stretches over more than a decade and at least six courts. Taking its cue from the Southern District of New York and the Central District of California, this Court holds that plaintiff is precluded from re-litigating the issue of its ownership of copyrights based on the 1998 agreement, which issue was decided against it in Abadin.
     “Consequently, plaintiff cannot state a claim for copyright infringement, because such a claim first requires ‘ownership of a valid copyright.’ Plaintiff has relied solely on the 1998 agreement to establish its ownership of the copyrights at issue here, and has made no allegation of any other basis for that ownership other than its public filings and records based on the same 1998 agreement. Accordingly, plaintiff’s claim for copyright infringement fails to state a claim upon which relief can be granted. Because the claim must be dismissed on this basis, the court need not review defendant’s remaining arguments for dismissal.”
     Allowing Stan Lee Media to amend its complaint “would be futile,” the judge added.
     “Unlike an attempt ‘to cure technical errors or otherwise amend the complaint when doing so would yield a meritorious claim,’ plaintiff here cannot successfully state a claim for infringement when its theory of ownership of the allegedly infringed copyrights is precluded,” he continued.
     The company’s copyright claims have now been rejected by federal courts in California, Colorado and New York.
     Stan Lee had co-founded Stan Lee Media with Peter Paul in 1999 but Lee quit in 2001 over a salary dispute. The company collapsed that year, and Paul was sentenced to 10 years in prison for manipulating its stock.

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