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Disney loses battle in Pooh legal war

A lawsuit filed to stop royalty payments to the Slesinger family is dismissed by a judge.

February 17, 2007|Meg James | Times Staff Writer

A Beverly Hills family that has battled Walt Disney Co. for 15 years over Winnie the Pooh royalties will be allowed to keep sharing in the billion-dollar honey pot.

U.S. District Court Judge Florence-Marie Cooper on Thursday dismissed a copyright lawsuit that sought to end Disney's obligation to pay the Slesinger family royalties for sales of Winnie the Pooh merchandise. In 1961, the Slesingers, who inherited the merchandising rights to the silly old bear and his forest friends, transferred those rights to Disney in exchange for ongoing royalty payments.

But the partnership became acrimonious. In 1991, the Slesingers sued Disney in state court alleging breach of contract and fraud. They claimed that over the years the Burbank-based entertainment giant had cheated them out of hundreds of millions of dollars in profits from Pooh.

That lawsuit was followed by the copyright case that was thrown out Thursday. In 2002, the granddaughters of Pooh author A.A. Milne and of illustrator E.H. Shepard filed a complex lawsuit in U.S. District Court in Los Angeles that invoked U.S. copyright law to assert rights to Pooh. If they had prevailed, the Slesingers' legal ties to the bear would have been erased.

Although Disney was not a plaintiff in the 2002 claim, the company had agreed to pay the granddaughters' legal fees if they assigned to Disney any rights they won to Pooh merchandise -- such as toys, DVDs, computer games and clothing -- which they did.

But Judge Cooper on Thursday dismissed the claims brought by Harriet Jessie Minette Hunt, who is Shepard's granddaughter. Cooper granted the Slesingers' motion for summary judgment, which is expected to end the copyright case. Earlier, the judge had dismissed Clare Milne's portion of the case.

The judge determined that Milne could not overturn a 1983 agreement by her father, Christopher Robin Milne, who consented to the renewal of the Slesingers' license agreement. The U.S. Supreme Court eventually denied Milne's appeal.

Hunt's attorneys did not return calls Friday afternoon.

The Slesingers claimed victory. "The court specifically indicated in its order that Disney's claims against the Slesingers were inappropriate and improper," said Barry Slotnick, an attorney for the Slesingers. "We plan to ask Disney to pay us billions of dollars in compensatory and general damages."

Not so fast, said Daniel Petrocelli, an attorney for Disney, who noted that it was Disney that had come away the big winner in a pivotal battle in the long-running legal saga.

In 2004, a state court judge threw out the Slesingers' 1991 breach-of-contract lawsuit against Disney after finding misconduct on the part of the family. That judge accused the Slesingers of trying to gain an edge in the litigation by stealing confidential Disney documents from the company's trash, and then lying and altering court papers to cover up the thefts.

On Friday, Petrocelli downplayed the Slesingers' ability to parlay Thursday's ruling into an award for damages.

"The ruling has no bearing on Disney's rights to Pooh nor does it affect the judgment that Disney won, throwing out the Slesingers' state court case with prejudice," he said.

The Slesingers -- Shirley Slesinger Lasswell and her daughter Patricia Slesinger -- have appealed that state court ruling on the breach-of-contract suit.

It was Stephen Slesinger, a New York literary agent and a pioneer in marketing cartoon characters, who acquired the Winnie the Pooh merchandising rights in 1930 from A.A. Milne, the author of the children's stories about the honey-loving bear and his friends including Christopher Robin, Piglet, Tigger and the downtrodden donkey Eeyore.

Slesinger died in 1953 and his widow, Shirley Slesinger, spent several years marketing Pooh on her own. In 1961, she struck a deal with Disney, which used its marketing muscle to turn the bear into gold. In the 1990s, Pooh trumped Mickey Mouse as Disney's most profitable character, raking in more than $1 billion annually for the company

On Friday, Slotnick, the Slesingers' attorney, said that Cooper's ruling would allow them to pursue damages against Disney that the family says could amount to as much as $2 billion.

"It's not over," said Slotnick. "There's more to come."

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meg.james@latimes.com

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