American Reporter Staff
November 5, 2002
DISNEY SAYS MILNE HEIRS TO RETAKE POOH RIGHTS
HOLLYWOOD, Nov. 5, 2002 -- In a stunning announcement, the Walt Disney Co. Monday declared Monday that it had struck a deal under the 1998 revision of the U.S. Copyright Act with two English heirs of Winnie the Pooh author A.A. Milne and illustrator E.H. Shepard to have the two recapture rights to the world's most popular bear from the American heirs of a literary agent who owned them for more than 72 years and then sell them to Disney in 2004.
Ironically, acording to the Los Angeles Times, the English granddaughters of Milne and Shepard would sell rights to DVDs, videocassettes and computer software to Disney that the studio has claimed in an 11-year lawsuit that the American heirs did not have.
The American heirs claim that Disney has cheated them out some $200 to $800 million in royalties over the 41-year-life of two contracts signed in 1961 and 1983 with Disney, and that case is scheduled to go to trial in May 2003 in Los Angeles Superior Court.
The English heirs, meanwhile, had revoked and then reconveyed the rights to the American heirs of branding pioneer Stephen Slesinger in 1983, lawyers for the Slesinger family were quoted as saying.
A new provision of the 1998 copyright law allows heirs of authors to recapture rights to properties even if they were granted in perpetuity.
Slesinger lawyers were quick to brand the tactic as a "desperate" attempt to "sneak around the agreement" with the family. "That would be in violation of the agreement they entered into," attorney Bert Fields told the Los Angeles Times. "This is another attempt by Disney to get out of paying what they have promised."
Disney stock, which had moved higher after its "Santa Clause 2" raked in $29 million at the box office over the weekend, closed at $18.05 in after-hours trading, the New York Times said. The stock has been in the doldrums for at least eight months, largely due to uncertainty over the Pooh case after Los Angeles Superior Court Judge Ernest Hiroshige found Disney liable for what Disney has estimated was $200 million in unpaid royalties.
The two women, Milne granddaughter Clair Milne and Shepard granddaughter Minette Hunt, will reconvey rights to Pooh merchandise, film, DVD, clothing and other uses, Disney spokesman John Spelich told the Los Angeles Times.
"By making this claim," attorney Bonnie Eskenazi, who also represents the Slesingers, told Variety's Janet Shprintz, "Disney is repudiating the 1983 agreement. The Milnes revoked and reconveyed Slesinger's license under that agreement specifically to avoid a recapture problem."
"She (Milne) is recapturing her rights from SSI and she is regranting them to the Walt Disney Co.," Spelich told Reuters. "As of November 2004, we will have the worldwide merchandise rights to Winnie the Pooh characters, or motion pictures."
Ironically, the news broke as Disney was deposing the wife of American Reporter Editor-in-Chief Joe Shea in the offices of Disney's attorneys, O'Melveny & Myers, before a discovery referee, retired Superior Court Judge David Eagleson, where Eskenazi was an observer and Shea was present to support his wife.
In exchange for being allowed to remain present while his wife was deposed, Shea agreed not to report on the character of the deposition proceedings and to postpone reporting on its content until a transcript is available.
Shea's deposition, which is expected to last a day, will take place on Wednesday. Attorney Alexander J. Petale, representing Shea and The American Reporter, has objected to the deposition, invoking California's journalistic "shield" law.