Every time a Winnie-the-Pooh doll is sold, the widow and daughter of a far-sighted dealer in artistic rights will continue to receive a cut, thanks to the handiwork of intellectual property lawyer Roger L. Zissu of Fross Zelnick Lehrman & Zissu in New York.
The dealer, Stephen Slesinger, acquired rights to sell merchandise based on the Pooh characters from the author, A.A. Milne, in 1930. (Mr. Milne died in 1956). Sales from merchandise based on Pooh, Christopher Robin, Eeyore, Tigger and others in the story are now estimated to generate billions of dollars in annual revenues � second only to Mickey Mouse.
Royalties from Pooh products flowing to Mr. Slesinger’s heirs are conservatively estimated to exceed $50 million by the time the Milne family’s copyright expires in 2019.
In scoring a victory for his clients, Mr. Zissu also felled two giants: the Walt Disney Corporation, a powerhouse in the entertainment industry, and David Nimmer, the author of the highly respected treatise, “Nimmer on Copyright,” who represented the Milne family interests.
Mr. Zissu entered the picture in 2002 when Disney and the sole-surviving direct descendant of Mr. Milne sued Mr. Slesinger’s heirs in federal court in California to cut them out of that revenue stream.
Two years ago, Mr. Zissu persuaded a federal judge in the Central District of California to rule that Disney and Mr. Milne’s granddaugher, Clare Milne, could not disavow the 1930 deal with Slesinger. Last Thursday, the U.S. Court of Appeals for the Ninth Circuit affirmed in a ruling by Judge Conseulo M. Callahan.
The lawsuit was commenced with Disney and Ms. Milne as co-plaintiffs. Though Disney did not join in the appeal, it had agreed to pay for the cost of the litigation, according to the Ninth Circuit opinion.
The federal lawsuit was started after more than a decade of bitter litigation between the Slesingers and Disney in California state court. The Slesingers claimed Disney owed them hundreds of millions of dollars in unpaid royalties.
The Slesingers’ state court suit was dismissed last year when a judge sanctioned the family for having attempted to cover up the fact that a private investigator had sifted through Disney’s trash in an effort to gather evidence. An appeal of the dismissal is pending. Mr. Zissu has not been involved in the state case.
Two Sets of Amendments
The federal litigation concerns the parties’ rights to participate in future royalties.
The question of whether Ms. Milne and Disney could eliminate the Slesingers’ interests turns on a complex legal and factual history.
In 1961, the Slesinger family granted Disney an exclusive licensing agreement for Pooh merchandise. The Slesingers got 4 percent of revenues and the Milnes 2.5 percent.
In 1976, Congress amended the Copyright Act to give authors an additional 19 years of protection, bringing the total to 75 years. To enable authors and their heirs to take advantage of the extended protection period, the 1976 act also empowered them to terminate previous licensing arrangements.
In 1983, according to Judge Callahan’s opinion for the Ninth Circuit panel in Milne v. Slesinger, 00-57189, Disney sought to renegotiate the deal out of fear that the Milnes would abrogate the agreement under which it held exclusive merchandising rights.
The result was an agreement that reversed the royalty percentages � with the Milnes now getting 4 percent and the Slesingers 2.5 percent � in exchange for an agreement that the Milnes would not exercise their termination powers under the 1976 law.
In 1998, Congress again amended the Copyright Act to extend copyright protection for another 20 years to 95 in all. The effect was to extend the copyright protection of the Pooh works until 2019. The 1998 act, like the 1976 act, also gave authors the right to cancel prior agreements.
In 2002, Ms. Milne, as the sole remaining heir, sought to exercise her right to terminate the earlier agreement. Together with Disney she filed the federal lawsuit in California seeking a declaratory judgment that she had properly terminated the Slesingers 1930 license.
Simultaneously Ms. Milne entered into a new contract with Disney giving it the rights she had sought to reclaim from the Slesingers. The terms of Ms. Milne’s agreement with Disney have not been disclosed and are subject to a confidentiality order, Mr. Zissu said.
In rejecting the bid to cut the Slesingers out of the royalties, Judge Callahan found that Disney’s renegotiation of the deal with the Slesinger and Milne families in 1983 was the decisive factor.
The 1998 amendments to the Copyright Law, like those enacted in 1976, limited the power of cancellation to agreements entered into before 1978, Judge Callahan wrote.
In affirming the district court, the panel ruled, the renegotiation of the parties’ arrangements five years after the cutoff date � in 1983 � precluded Disney and Ms. Milne from invoking the termination provision.
The court also rejected Ms. Milne’s arguments that other provisions of the Copyright Act were applicable which would have permitted the termination of the licensing rights Mr. Milne gave Mr. Slesinger in 1930. Judges J. Clifford Wallace and Barry G. Silverman joined in the opinion.
Michelle Bergman, a spokeswoman for Disney, said the company would have no comment. Mr. Nimmer, of Irell & Manella, who represented Ms. Milne, said a request for U.S. Supreme Court review is under consideration.
Worked on Muppets Deals
Mr. Zissu, 66, is no stranger to litigation over beloved childrens’ characters. He was involved in a dispute over the ownership of rights to Barney, television’s whimsical purple dinosaur. He also worked to preserve the interests of the heirs of Edgar Rice Burroughs in the Tarzan stories and is representing D.C. Comics in a dispute over the rights to Superman.
In addition to litigation, he has also helped negotiate deals for the Jim Henson Company concerning the Muppets, the set of characters that became famous to young viewers of Sesame Street.
Mr. Zissu’s first job following his graduation cum laude from Harvard Law School in 1966 was as a clerk for now deceased Eastern District Judge John J. Dooling Jr.
He was an associate at Davis Polk & Wardwell for five years before leaving to become corporate counsel at Vornado Corp., which at the time owned discount retail chains.
In 1973, he joined Cowan, Liebowitz & Latman, the intellectual property firm, and began his transformation into an intellectual property lawyer. He was following in the footsteps of his father, a leading copyright lawyer of his generation who had represented the mystery writer Dashiell Hammett, the Dorsey Brothers Band and the Screen Composers Association of America. Both father and son were presidents of the Copyright Society, U.S.A., the leading organization for lawyers and others working in the copyright field.
Mr. Zissu was a partner at Cowan Liebowitz for 16 years, before leaving in 1990 to become a name partner at 50-lawyer Fross Zelnick Lehrman & Zissu, which specializes in copyright, trademark and unfair competition work.
� Daniel Wise can be reached at email@example.com.