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9
4 YEARS

Marvel Dodges Bullet As $1 Billion Lawsuit Over Stan Lee Company Is Dismissed

Stan Lee
Alberto E. Rodriguez/Getty Images

A federal judge has dismissed a $1 billion lawsuit against Marvel Entertainment that claimed copyright infringement, breach of fiduciary duty and breach of contract when Stan Lee left the company that bares his name, Stan Lee Media Inc., for Marvel about a decade ago. The lawsuit was dismissed on jurisdictional grounds and the judge slammed the plaintiffs for trying to circumvent prior legal rulings.

This one's got a complicated backstory: In 1998, after Marvel used bankruptcy proceedings to void its $1 million-per-year lifetime contract with Lee, the legendary comic book creator formed SLMI as a Web-based production and marketing company to control his intellectual property. Three years later, SLMI was in its own bankruptcy, and Lee sued Marvel for reneging on his employment contract. A settlement was reached, with Marvel regaining control over Lee's properties.

Some of the executives and shareholders of SLMI weren't happy with that development, however, and have alleged that Lee's comics creations, such as X-Men, Iron Man and the Fantastic Four, were stolen from them. A lawsuit was first filed against Lee and Marvel in New York in 2007 and then dismissed. A few months later, another lawsuit against Lee was filed in California. There also was an action in Colorado. Then, in 2009, an additional lawsuit was re-filed in New York. Last March, U.S. District Court Judge Paul A. Crotty dismissed that complaint and affirmed the decision in August, noting ten years of tiring litigation and citing lack of standing, expiration of statute of limitations, and other causes in putting it to bed.

Despite all that, some SLMI shareholders kept fighting, attempting to intervene in Lee's old lawsuit against Marvel, which was dismissed by the consent of the parties in 2005. But in a ruling on Friday, U.S. District Judge Robert Sweet decided to let sleeping dogs lie, writing, "SLMI's present motion must be regarded as an improper attempt to circumvent Judge Crotty's August 10, 2010 decision and should on that ground be denied."

We'd say that the long saga involving Stan Lee Media may be finally over, except we probably said the exact same thing at least a half dozen times in the past few years. Or as Judge Sweet put it in his decision, "Because of the success of the [comic book] characters and the conflicting claims concerning their rights, it has been difficult to achieve finality."