Stan Lee Media, Inc. v. Lee

• Decision Date: 29 October 2014
• Docket Number: No. 12-56733,12-56733
• Court: U.S. Court of Appeals — Ninth Circuit
• Parties: STAN LEE MEDIA, INC., a Colorado corporation, Plaintiff - Appellant, v. STAN LEE, an individual; et al., Defendants - Appellees.

STAN LEE MEDIA, INC., a Colorado corporation, Plaintiff - Appellant, v. STAN LEE, an individual; et al., Defendants - Appellees.

No. 12-56733

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Argued and Submitted: October 9, 2014

October 29, 2014

NOT FOR PUBLICATION

D.C. No. 2:07-cv-00225-SVW-SS

MEMORANDUM^*

Appeal from the United States District Court for the Central District of California

Stephen V. Wilson, District Judge, Presiding

Argued and Submitted October 9, 2014 Pasadena, California

Before: HAWKINS and GRABBER, Circuit Judges, and SEDWICK,^** District Judge.

This appeal challenges the dismissal of Stan Lee Media, Inc.'s (SLMI) claims that its intellectual property rights in comic book characters were violated by thelegendary comic book creator Stan Lee. We affirm because SLMI failed to satisfy pleading requirements.¹

To survive a motion to dismiss, a party must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Accepting as true the allegations made by SLMI in its complaint, Lee v. City of Los Angeles, 250 F.3d 668, 679 (9th Cir. 2001), the claims to the vast majority of properties fall short of the pleading requirement established in Iqbal-Twombly.

Appellant's central contention is that, in October 1998, Stan Lee assigned SLMI rights to valuable comic book characters, including Spider-Man, The X-Men, The Incredible Hulk, The Fantastic Four, Iron Man, Thor, Daredevil, and others ("the Marvel characters"),² and then breached that assignment. This argument is simply implausible.

The record demonstrates that, between the date the agreement was signed and the filing of related litigation in 2007, SLMI never announced that it owned rights tothese characters (even when publicly disclosing company information pursuant to a securities offering), licensed the characters, produced content related to the characters, or asserted or attempted to enforce its ownership rights. During the course of SLMI's bankruptcy proceedings, which lasted from 2001 to 2006, neither the company, nor Stan Lee, nor SLMI's shareholders asserted that SLMI possessed an interest in the characters. Meanwhile, others were openly producing content and generating revenues from the characters. Given the significant value of these franchises, SLMI's failure to publicize, protect, or exploit its right to profit from the characters establishes that these claims are simply implausible.

SLMI also alleges that Stan Lee abridged the company's rights to certain lesser-known characters created in the course of his relationship with SLMI, such as The Drifter, The Accuser, and Stan's Evil Clone ("the Lee characters").

Although the Consolidated Complaint could be read to encompass the Lee characters, as well as the Marvel characters, SLMI's arguments on appeal concern only the latter. Indeed, SLMI affirmatively disclaimed an interpretation of the complaint that would include the Lee characters. In its reply brief, for example, SLMI asserted:

[T]he claims for relief in the Abadin putative derivative case related only to a determination of intellectual property rights in three characters created after 1998 known as the Drifter, the Accuser and Stan's EvilClone. [Opening] Brief at 15. The present action asserts SLMI's ownership rights in characters that were created by Stan Lee prior to 1998. [Opening] Brief at 51-54.

Reply Brief at 4-5 (emphasis added).

Therefore, we need not consider any potential claims related to the Lee characters. See Smith v. Marsh, 194 F.3d 1045,...