Bear’s heirs can’t scratch Pooh lawsuit

Despite decision, Disney hoping for reversal

The Disney Co.’s plan to short-circuit the long-running Winnie the Pooh license dispute by filing a copyright claim was bear-ly alive after a federal hearing Monday.

U.S. District Court Judge Florence-Marie Cooper listened without comment to oral arguments on whether Clare Milne, granddaughter of Pooh author A.A. Milne, could terminate a merchandising license to the family of Stephen Slesinger and grant those rights directly to Disney.

Barely tentative

Late last week, Cooper issued a tentative decision rejecting Milne’s and Disney’s copyright claims. On Monday, Disney attorney Daniel Petrocelli took heart from the fact that Cooper did not affirm her tentative decision from the bench. However, it would be unusual for a judge to reverse a tentative decision, especially after issuing a lengthy written opinion.

Appearing on behalf of Clare Milne, noted copyright expert David Nimmer said that copyright law, including the 1998 Copyright Act, has certain window periods during which authors and their heirs can revoke rights and terminate a license. Nimmer argued that a 1983 agreement signed by Disney, the Slesingers, copyright holders the Pooh trust, and Christopher Robin Milne — A.A. Milne’s son and the holder of the termination right –was invalid. The 1983 agreement was specifically designed to prevent a revocation of rights for at least 35 years, or until the next window period, but Nimmer argued that the 1998 statute prohibits that result, and that Clare Milne should still able to terminate.

Long shots

The Slesingers’ equally noted copyright expert, Roger Zissu, argued that nothing in the copyright law prevented the parties from making a contractual agreement not to revoke the license.

In her tentative decision, Cooper agreed that the Copyright Acts do not alter the power of private parties to contract and that the clear purpose of the 1983 agreement was to continue the license agreement.

If Cooper affirms her tentative ruling, Disney is expected to appeal. Also up in the air is the fate of Disney’s plan to transfer the state case to federal court, a move that will be opposed by the Slesingers. Removal of a decade-old case is a long shot at best, and the chances that the federal court will permit removal if there is no pending federal case are even more remote.

Billion-dollar bear

Disney and the Slesingers are in the midst of a 12-year-old lawsuit in L.A. Superior Court over disputed payments. The family has licensed Pooh merchandising rights to Disney since 1961, and they claim they have been cheated on payments. More recently, their lead attorney, Bert Fields, has sought to terminate the agreement with Disney. With Pooh annual revenues estimated at $1 billion, that would be a severe blow to Disney.

To protect itself from the threat of termination, Disney announced in November that Clare Milne and Minette Hunt, the granddaughter of Pooh illustrator E.H. Shepard, were terminating the Slesingers’ merchandising rights effective 2004. The rights would then be granted to Disney. Milne and Disney immediately sued in federal court seeking a ruling that the Milne and Hunt termination notices were effective. (Hunt has not joined the lawsuit, and the effect of her termination notice is unresolved.)

Unless Cooper reverses her tentative decision, the Slesingers still have the threat of termination hanging over Disney.

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