Claim Against Marvel Alleges Co-Ownership of Superheroes
March 19, 2007
By Eriq Gardner
NEW YORK — The battle for control of superhero characters created by Stan
Lee is heating up, with the company formerly run by the comic book legend
suing Marvel Entertainment for billions of dollars, claiming co-ownership of
characters such as Spider-Man, the Incredible Hulk and X-Men.
The suit, filed last week in New York District Court on behalf of Stan Lee
Media Inc., claims that Lee, who was terminated in 1998 by Marvel, set up a
company and signed an “Employment Agreement/Rights Assignment” contract that
gave the co-creative interests in his characters to his new company.
According to the complaint, filed by Goodwin Proctor partner Ethan Horwitz,
the “assignment has never been terminated and continues to be in full force
and effect.”
Lee is no longer in control of SLMI, and the new suit against Marvel is the
latest development in the acrimonious relationship between Lee and the
company that bears his name.
After Lee formed SLMI in 1998 with the stated purpose of bringing his
superheroes to the digital age, the company suffered a dot-com meltdown. In
2001, it filed for Chapter 11 bankruptcy, and during bankruptcy proceedings,
shareholders installed new executives, including James Nesfield as its new
chairman and president.
Earlier this year, Lee sued SLMI’s new executives, accusing them of having
conspired to fraudulently gain control of the company and having
“misappropriated, infringed and interfered with copyrights, trademarks,
publicity rights and contract rights owned exclusively by Stan Lee and his
companies.”
The suit filed last week appears to be the company’s counterattack against
Lee. In recent years, Lee and Marvel have made amends, with Lee now serving
as president emeritus of Marvel Comics. Marvel maintains that it has full
ownership over the characters at issue and has issued a statement by Lee
that reads, “I do not support this action and believe the suit to be
baseless.”
The plaintiffs allege causes of action for accounting, declaratory relief,
constructive trust and two counts of interference with the right of
publicity. They are demanding 50% of all income, proceeds and profits
derived from Marvel’s use, marketing, licensing, merchandising, promotion,
advertising and exploitation of the Lee characters, which have been the
basis for films that have grossed billions in total boxoffice.
Nesfield said SLMI might force Lee to testify in court.
“Stan Lee is no longer with the company,” Nesfield said. “But the contract
remains intact. He has signed it, and the contract is still in force.”
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As a caveat and for the record, because I was in California, Jim Nesfield asked me to be the VP of the newly reformed SLM Inc. They needed someone to physically go to the storage unit and collect all of the books, records, and any remaining property. He gave me a resolution to give me that authority, and I agreed to do so. The Debtor in Possession would not allow me to take possession of the books and records. I officially resigned as VP, when that purpose could not be accomplished, and such resignation was approved. Nevertheless, the attorney for Lee named me on the lawsuit they had earlier filed.
You will find this interesting. In one of the last motions made in court, the attorney for the debtor in possession made a motion TO DESTROY CORPORATE RECORDS because they claimed they could not afford to store them. We discovered that many months earlier they paid off a large storage bill and took possession of those books and records.
Lee’s counsel has claimed that the newly reformed SLM was formed illegally. Well, there was a public notice for shareholders to come to a meeting. Lee himself was given notice of the meeting sent to his home. He, did not go to the meeting. Nesfield had the shareholders necessary and the proxies necessary to conduct business. His purpose was to save the company.