Los Angeles Business Journal

Disney Gets Win in Marvel Case

By Business Journal Staff Friday, August 9, 2013

Walt Disney Co. won a critical legal victory this week when a federal appeals court ruled that its Marvel Entertainment subsidiary had ownership of some of the company’s most popular superheroes, including the Incredible Hulk and Spider-Man.

In a 57-page ruling issued Thursday, a panel of three New York appellate justices found that a lower court ruled correctly in granting ownership to Marvel of the work created between 1958 and 1963 by Stan Lee and his late writing partner Jack Kirby, who died in 1994.

The litigation stemmed from a notification made by Kirby’s four children to Marvel in 2009 that they would terminate the right of Marvel to use the superhero characters, which also included “X-Men” and “The Fantastic Four.” That notification followed shortly after the Burbank media company had acquired Marvel for $4 billion.

Marvel filed a lawsuit to establish its ownership rights the following year, and in 2011, a U.S. District Court judge in New York ruled in Marvel’s favor that it owned the characters. The family later appealed the ruling to the appellate court.

The appellate court found that though Kirby was not a Marvel employee, his illustrations were done for and at the expense of Marvel.

“Marvel’s inducement, right to supervise, exercise of that right, and creative contribution with respect to Kirby's work during the relevant time period is more than enough to establish that the works were created at Marvel’s instance,” the ruling read.

Shares of Disney lost $1.02, or about 1.5 percent, to close at $64.73 on the New York Stock Exchange.