Disney Wins Pooh Appeal
Company Wins Latest Round in Slesinger's 16-year-old Lawsuit
A California Appeals Court has upheld a 2004 ruling that threw out a Slesinger Family lawsuit claiming that Disney withheld royalties for Winnie the Pooh.
The Walt Disney Company has won the latest round in a 16-year-old lawsuit over Winnie the Pooh, one of the studio's most profitable assets.
A panel of judges in the California appeals court upheld a 2004 ruling that threw out the Slesinger Family's claim that Disney owed them hundreds of millions of dollars in unpaid royalties.
Illegal Evidence
Los Angeles Superior Court Judge Charles McCoy tossed the case three years ago, after he discovered that the Slesingers had illegally obtained 6,400 pages of evidence from Disney. The Slesingers had even gone so far as to hire a private investigator to go through the Mouse House's garbage. The family had altered court papers to hide the illegal action.
"When a plaintiff's deliberate and egregious misconduct makes any sanction other than dismissal inadequate to ensure a fair trial, the trial court has inherent power to impose a terminating sanction," the three-judge appellate panel said today in a unanimous decision.
In a phone interview with Bloomberg.com, Disney lawyer Daniel Petrocelli said the company "is obviously extremely pleased and gratified that there's now a definite and final decision putting this case to rest once and for all."
Slesinger Will Appeal
However, the Mouse House not free and clear just yet. A spokesman for Stephen Slesinger's daughter Pati announced she will appeal the latest decision to the state Supreme Court, and will also proceed with a federal lawsuit seeking $2 billion in damages and to strip Disney of its rights to the Pooh character.
Disney has admitted that it could lose a lot of revenue if they can no longer sell Winnie the Pooh products. The "bear of very little brain" earned $6 billion in retail sales during 2005.
In 1930, Winnie the Pooh creator A.A. Milne sold the rights to his beloved children's character to Stephen Slesinger, a New York film and television producer. In 1961, Slesinger and his wife transferred the rights to Walt Disney for regular royalty payments; in the 1983 renewal, Slesinger's heirs would receive 2% of gross worldwide royalties. This 1983 agreement also ensured that Milne's family could never regain copyright control of Winnie the Pooh.
In 1991, Slesinger's family sued Disney, claiming the company was flagrantly withholding royalties. The Slesingers also wanted to terminate the agreement. In response, Disney funded an unsuccessful attempt by granddaughter Clare Milne to return control of Winnie the Pooh to A.A. Milne' and illustrator E.H. Shepard's heirs.
In retaliation, the Slesingers filed counterclaims, seeking more than $2 billion in damages for trademark and copyright infringement, and for underpaid royalties. That counterclaim is still pending.
