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The Honolulu Advertiser
Posted on: Saturday, February 17, 2007

Oh, Pooh, Disney says of ruling on royalties

By Meg James
Los Angeles Times

Winnie the Pooh and his forest friends will still help provide royalties to a California family.

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

U.S. District Court Judge Florence-Marie Cooper on Thursday dismissed a lawsuit that sought to end Disney's obligation to pay the Slesinger family royalties on the 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 Slesinger family sued Disney in state court for breach of contract and fraud, claiming that, over the years, the entertainment giant had cheated them out of hundreds of millions of dollars in profits from Pooh.

That lawsuit was followed by this one, which dealt with copyright. In 2002, the granddaughters of the Pooh author, A.A. Milne, and of illustrator E.H. Shepard filed a complex lawsuit in U.S. District Court in Los Angeles that attempted to invoke U.S. copyright laws to assert their rights to Pooh as descendants of the creators. 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, DVDs, computer games and clothing — which they did.

But Cooper, the federal judge, 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 should end the copyright case. Earlier, the judge had dismissed Clare Milne's portion of the case.

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, a lawyer for the Slesingers. "We plan to ask Disney to pay us billions of dollars in compensatory and general damages."

Not so fast, said Disney's attorney, Daniel Petrocelli.

Petrocelli noted that it was Disney that came away the big winner in the pivotal battle in the long-running skirmish.

In 2004, a state court judge threw out the Slesingers' 1991 breach-of-contract suit 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.

Yesterday, Petrocelli downplayed the Slesingers' ability to parlay the 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.