Ninth Circuit delivers another blow to Stan Lee Media

Ninth Circuit delivers another blow to Stan Lee Media

Even as Disney and Stan Lee Media argue their case in one appeals court, another has dealt a setback to the failed dot-com’s feud with its co-founder and namesake.

According to Courthouse News Service, a panel for the Ninth Circuit Court of Appeals ruled today that a California federal judge made the right decision in 2012 when he dismissed a shareholder lawsuit against Stan Lee seeking millions in profits and ownership of his Marvel co-creations.

Stan Lee Media has long insisted that between August 1998, when Marvel terminated Lee’s $1 million-a-year lifetime contract, and November 1998, when he entered into a new agreement with the House of Ideas, the legendary creator signed over his likeness and the rights to all of the characters he co-created — Spider-Man, the Avengers and the X-Men, among them — to Stan Lee Entertainment, which later merged with Stan Lee Media. That company in turned filed for bankruptcy in February 2001; it emerged from protection in November 2006, and within months, the first of numerous lawsuits (against Marvel, Lee, Disney and others) was filed.

Stan Lee Media has accused Lee of colluding with his late partner Arthur Lieberman, Marvel CEO Isaac Perlmutter and former Marvel Studios President Avi Arad to hide and misappropriate financial interests in his creations, a claim that resurfaced earlier this month in its argument before the Ninth Circuit after Judge Michael Daly Hawkins questioned why the dot-com didn’t list such valuable assets in its 1999 public filings or in its 2001 bankruptcy.

The collusion argument didn’t sway the court, as its memorandum states that Stan Lee Media has failed to demonstrate Lee transferred any character rights. What’s more, the court found it suspicious that between 1998 and the beginning of litigation in 2007, Stan Lee Media never announced its ownership of any of the lucrative Marvel characters, nor did it attempt to license them.

“Given the significant value of these franchises, SLMI’s failure to publicize, protect, or exploit its right to profit from the characters establishes that these claims are simply implausible,” the court wrote.

Stan Lee Media’s legal efforts, which have been wholly unsuccessful to date, are backed by a group of investors that includes the $21 billion hedge fund Elliott Management.

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