In a decision that could cost Walt Disney Co. millions in royalty payments, a federal judge in Los Angeles on Friday rejected a bid by the granddaughter of the creator of Winnie the Pooh to reclaim the U.S. copyright to the classic character.
Making an earlier, tentative ruling final, U.S. District Judge Florence-Marie Cooper said Clare Milne couldn't terminate the merchandising rights that her grandfather, author A.A. Milne, granted to a New York literary agent in 1930.
The judge found that the basis for Clare Milne's attempt to revoke the rights held by the agent's heirs -- the 1998 Sonny Bono Copyright Termination Extension Act -- didn't apply because the contract in question was signed five years after the act's 1978 deadline for works to be protected.
In addition, the judge noted in her decision, Milne's father, Christopher Robin Milne, chose not to reclaim any rights when he signed the 1983 royalty distribution agreement with Disney and the family of literary agent Stephen Slesinger.
Slesinger's widow and daughter have been embroiled in a bitter battle with Disney for a dozen years over hundreds of millions of dollars in disputed royalties.
Disney attorney Daniel Petrocelli said the Burbank-based entertainment giant would appeal, to settle whether a contract could supersede federal law.
"The question will ultimately be decided by an appellate court, perhaps even the U.S. Supreme Court," Petrocelli said.
In November, Clare Milne made a deal with Disney agreeing to transfer to the company the merchandising rights if a judge allowed her to recover them from the Slesingers.
Disney was hoping to get out of its obligation to pay royalties to the Slesingers beyond November 2004. In recent years, Disney has paid the family about $10 million annually.
Disney acquired the Pooh rights in 1961 from the author's widow and Shirley Slesinger Lasswell. The 1983 contract was a revision of the earlier pact.
The family's attorney called Cooper's ruling "a huge victory."
"Disney lost hands down. The federal court saw right through their shabby maneuver," lawyer Bert Fields said.
Petrocelli called the ruling a "split decision" because it stopped short of resolving whether the granddaughter of Pooh illustrator Ernest H. Shepard, Harriet Minette Hunt, could terminate the Slesingers' rights. Shepard's heirs weren't party to the 1983 agreement.
Fields scoffed, saying Hunt was "a minor player." She could not invoke copyright for the works because her grandfather never held it, he said.