Disney Demands Rejection of Billion-Dollar Lawsuit Targeting Marvel Characters

Stan Lee Media Inc.'s lawsuit is described as "completely frivolous."

The Walt Disney Co. has asked a judge to dismiss Stan Lee Media Inc.'s billion-dollar lawsuit filed in October over iconic characters including Spider-Man, X-Men and Fantastic Four.

In a motion filed Friday in Colorado federal court, Disney calls the lawsuit "flawed beyond cure" and "completely frivolous," saying that SLMI has attempted to make unsuccessful copyright claims six different times over the years and that the plaintiff should not be allowed to waste the court's time with the latest attempt.

SLMI is the company founded by Stan Lee in 1998 after the comic book legend had a falling out with Marvel. The company was to be a web-based production and marketing company that controlled his intellectual property. SLMI went bankrupt in 2001, and since then, shareholders of the company have argued that the company's assets were raided illegitimately.

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Unfortunately for SLMI's shareholders, judges have been dismissive, challenging their standing to pursue claims and later ruling that the claims already had been addressed. In July, a California judge rejected SLMI's lawsuit against Stan Lee on grounds of res judicata -- the matter already had been judged.

In October, SLMI attempted a switch in tactics by targeting Disney for the first time, arguing that Lee didn't properly assign the works to Marvel and that Disney has never recorded its agreement with Marvel with the U.S. Copyright Office. Alleging billions of dollars in damages for the unauthorized use of Lee's legendary creations in films like The Avengers, SLMI hoped to put the burden of proving rightful ownership upon Disney.

The Mickey Mouse company now has filed its response.

Disney says that even if it's true that Lee assigned rights to SLMI on characters such as Iron Man, Thor and X-Men, "Lee nevertheless retained the right to reclaim any intellectual property so conveyed in the event of a material breach, and in fact, by letter dated Jan. 30, 2001, terminated the 1998 Agreement on that basis."

STORY: Stan Lee Media Files Billion-Dollar Lawsuit Over Marvel Characters

Disney then points to a long line of litigation since the 2001 termination notice and says that the claim of copyright ownership has been rejected it every time has come up.

"The instant suit is just plaintiff's latest attempt to assert the same rights allegedly stemming from the 1998 agreement," says the motion to dismiss.

Disney gives three big reasons why the latest lawsuit should be similarly rejected: res judicata, that the claims are barred because they've already been made and they shouldn't be relitigated; a statute of limitations argument, that SLMI has known about this issue for more than three years before filing a lawsuit; Disney challenges a Colorado federal court's jurisdiction over the matter, saying Disney doesn't have any contacts with Colorado.

Disney is being represented by James Quinn at Weil, Gotshal & Manges.

Robert Chapman, a partner at Eisner Kahan & Gorry representing SLMI, responds, "Our case deals with infringements in the last three years. They are talking about ownership as if that was resolved in prior cases. it wasn't."

E-mail: eriq.gardner@thr.com; Twitter: @eriqgardner