April 11, 2011 9:05am PT by Eriq Gardner
Stan Lee Fights Legal War to Save Spider-Man, Iron Man, Thor (Exclusive Documents)
The long-running legal battle between comic book genius Stan Lee and the company that bears his name, Stan Lee Media Inc., continues this month as a California federal judge will soon decide whether a trial is necessary to determine who holds the rights to valuable Marvel characters such as Spider-Man, the Incredible Hulk, X-Men, Iron Man, the Fantastic Four, Thor, and more.
In January, federal judge Stephen Wilson delivered a surprising decision by lifting the stay on the protracted litigation and giving SLMI a chance to file a consolidated complaint. The move was made after SLMI finally got its house in order by getting a Colorado court to recognize SLMI's board as the duly authorized representative of the company.
Since Judge WIlson re-opened the case, Stan Lee's reps have been fighting tooth and nail to put it back to sleep.
"Enough is enough," argued Lee's lawyers in a motion to dismiss last month. They point out that SLMI's claims are more than a decade old and the subject of numerous bi-coastal lawsuits, including one in New York that was dismissed with prejudice by a fed-up judge there. (The NY court recently re-affirmed the decision; SLMI is appealing.)
Because the litigation is both complicated and seemingly never-ending, it's easy to lose sight of the underlying dispute.
SLMI claims that it was assigned Stan Lee's intellectual property in 1998 just months before Lee's most popular (and lucrative) characters were assigned to Marvel Entertainment.
We've obtained exclusive documents never before published that show early negotiations between Lee, represented by his lawyer, Arthur Lieberman, and Marvel's general counsel at the time, Turk Hardie.
Here, for example, is Lieberman's mark-up of the first contract sent in 1998 by Marvel to Lee. If the case gets to trial, the plaintiffs will likely use this to show that Lee refused to state to Marvel that he made the characters for hire and didn't disclose he no longer controlled them fully.
At the time, Marvel wasn't very happy when it saw this letter. Here was its response...
Eventually, Marvel managed to negotiate its way to the rights it desired.
Three years later, in 2001, the dispute erupted, setting off a decade-worth of litigation. That year, Lee sent a bankrupt SLMI written notices that he was terminating his agreement with them thanks to multiple alleged breaches. Lee then sued Marvel for allegedly reneging on his employment contract.
Lee and Marvel eventually reached an understanding, with a settlement that again gave Marvel purported control over Lee's properties. However, Lee and SLMI have never done the same kiss-and-make-up routine.
Lee wants the lawsuit dismissed, citing, among many reasons, that his IP assignment to SLMI was terminated in 2001 without any challenge for five years thereafter. Lee believes the the statute of limitations has expired.
In turn, SLMI board members, having finally established themselves as representatives of the post-bankruptcy entity, believe that their day before a jury is now forthcoming soon. The assignments, and subsequent cancellation of these assignments, is an issue for trial, SLMI says in opposition papers to the court.
A hearing is set for later this month, and a judge will make a decision shortly thereafter. The decision will likely be appealed, however, so it could be some time before this long-running case, and the fate of Spider-Man, is ever fully resolved.