Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov
`ESTTA126480
`ESTTA Tracking number:
`02/22/2007
`
`Filing date:
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`92046853
`Plaintiff
`STEPHEN SLESINGER, INC
`STEPHEN SLESINGER, INC
`
`Proceeding
`Party
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`,
`
`Correspondence
`Address
`
`Submission
`Filer's Name
`Filer's e-mail
`Signature
`Date
`Attachments
`
`ANDREW D. SKALE
`BUCHANAN INGERSOLL & ROONEY P.C.
`P.O. BOX 1404
`ALEXANDRIA, VA 22313-1404
`UNITED STATES
`Opposition/Response to Motion
`Fred W. Hathaway
`fred.hathaway@bipc.com
`/FWH/
`02/22/2007
`oppositi.pdf ( 64 pages )(3154083 bytes )
`
`

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`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`STEPHEN SLESINGER, INC.,
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`Petitioner,
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`V.
`DISNEY ENTERPRISES, INC.,
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`Respondent.
`
`Opposition No. 92/046,853
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`.
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`PETITIONER’S OPPOSITION TO RESPONDENT’S
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`MOTION TO SUSPEND PROCEEDINGS PURSUANT TO 37 C.F.R. § 2.117
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`Pursuant to TBMP §502.02(b), Petitioner Stephen Slesinger, Inc. (“Slesinger”) hereby
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`submits this brief in opposition to Respondent Disney Enterprises, Inc.’s Motion to Suspend
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`Proceedings Pursuant to 37 C.F.R. § 2.117. Petitioner respectfully requests that the Board deny
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`Respondent’s Motion and allow this cancellation to proceed without suspension.
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`1.
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`INTRODUCTION
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`Slesinger and Respondent Disney Enterprises, Inc. (“Disney”) are currently engaged in
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`an action in the United States District Court for the Central District of California (the “federal
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`court action”) that started when Disney sued Slesinger for a declaration that two notices of
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`termination served under Section 304(d) of the Copyright Act by the respective granddaughters
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`of the author and an illustrator of the first four Winnie the Pooh books (the “Pooh Works”) were
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`valid and that Disney’s royalty obligations to Slesinger, which licensed certain rights in the
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`works to Disney, should cease in November 2004. Slesinger alleged various counterclaims
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`against Disney, based upon Disney’s copyright infringement, breach of contract, and fraudulent
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`nonpayment of royalties under the license, but also for trademark infringement and unfair
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`competition based on Disney’s use of the characters in the Pooh Works (the “Pooh Characters”)
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`beyond the scope of the original license. Disney’s claims against Slesinger have since been
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`dismissed.
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`Separate and apart from its claims in the federal court action, Slesinger filed a Petition for
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`Cancellation (the “Petition”) of various trademark registrations for the Pooh Characters that
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`Disney fraudulently obtained from the PTO.
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`Disney now seeks to suspend the Petition pending the outcome of the federal court
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`action. According to Disney, the Petition “raises the same issues and seeks effectively the same
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`relief” as the federal court action. Moreover, Disney claims that a stipulation entered in the
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`federal court action bars Slesinger from seeking cancellation of the registrations until Slesinger’s
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`counterclaims against Disney are resolved. None of what Disney says is true.
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`Section 5 l0.02(a) of the Trademark Trial and Appeal Board Manual of Procedure
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`(“TBMP”) states that “[w]henever it comes to the attention of the Board that a party or parties to
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`a case pending before it are involved in a civil action which may have a bearing on the Board
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`case, proceedings before the Board may be suspended until final determination of the civil
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`action.” (Emphasis added.) As the Board noted in Boyds Collection Ltd. v. Herrington & C0.,
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`65 U.S.P.Q.2d 2017, 2018 (TTAB 2003), the use of the permissive word “may” clearly indicates
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`“that suspension is not the necessary result in all cases.”
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`In the present case, suspension would be inappropriate for several reasons. Principally,
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`the Petition for Cancellation is based on different grounds and seeks different relief than
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`Slesinger’s counterclaim in the federal court action. Moreover, since the filing of Disney’s
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`Motion to Suspend, Disney’s claims against Slesinger in the federal court action have been
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`dismissed. Finally, the stipulation to which Disney refers has no relevance to the question and
`2
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`presents no obstacle to the Board’s adjudication of the claims raised in the Petition. Therefore,
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`Slesinger respectfully requests that the Board deny Disney’s Motion to Suspend.
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`II.
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`THE PETITION FOR CANCELLATION RAISES DIFFERENT ISSUES AND
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`SEEKS DIFFERENT RELIEF THAN THE FEDERAL COURT ACTION
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`Disney argues that the Petition for Cancellation raises the identical issues and seeks
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`“effectively” the same relief as the pending federal court action. (Respondent’s Motion at p. 2.)
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`Neither of these assertions is true. Slesinger’s counterclaims against Disney in the federal court
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`action include substantial claims based upon copyright infringement, breach of contract, and
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`fraudulent royalty statements, which do not require trademark analysis. Although Slesinger’s
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`counterclaims include a claim for trademark infringement and unfair competition under Section
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`43(a), that counterclaim alleges that Disney exceeded the scope of the license Slesinger granted
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`it to use the Winnie the Pooh marks on various goods and services. (Exhibit 1 at 111] 130-134.)
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`In contrast, Slesinger’s claims in the Petition for Cancellation allege that Disney made
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`false statements to the PTO “with the intent to procure registrations to which Respondent was
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`not entitled” and that Disney’s registrations are “Void pursuant to Section 1 of the Trademark Act
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`as the applications were filed and prosecuted by an entity other than the owner of the subject
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`trademarks.” (Petition for Cancellation at 1111 7, 9.) These fraud and lack of ownership claims are
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`not included in Slesinger’s counterclaims in the federal court action.
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`Disney also alleges that the Petition for Cancellation and the counterclaim in the federal
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`court action seek the same relief. Again, Disney is incorrect. The trademark claim in the federal
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`court action seeks “treble profits or damages, whichever is greater, together with reasonable
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`attomey’s fees and prejudgment interest,” incidentally seeking that the court direct the USPTO to
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`correct the title of certain trademark registrations. (Exhibit 1 at 1111 135-137.) In contrast, the
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`Petition for Cancellation does not seek any monetary damages and does not request the USPTO
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`to modify the title of the registrations, but rather seeks to have the registrations cancelled
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`outright. (Petition for Cancellation at p. 4.) This is a much more drastic remedy and is clearly
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`not the same or even “effectively” the same relief, as Disney alleges. There is no relief being
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`sought from the district court which, if granted, would cancel all or even some of Disney’s
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`Winnie the Pooh trademark registrations.
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`The cases cited by Disney are distinguishable in that in those cases the opposer or
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`petitioner was raising the exact same issues and/or seeking the exact same relief in the pending
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`district court cases. See, e. g., General Motors Corp. v. Cadillac Club Fashions, Inc., 22
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`U.S.P.Q.2d 1933, 1937 (TTAB 1992) (“A review of the complaint in the civil action indicates
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`that a decision by the district court will be dispositive of the issues in this proceeding. In fact,
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`petitioner has asked the court to cancel respondent’s registrations”); Whopper-Burger, Inc. v.
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`Burger King Corp., 171 U.S.P.Q. 850 (TTAB 1971) (“[P]etitioner has asked the United States
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`District Court to direct the Patent Office to cancel Registration No. 782,990 here involved.
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`There can be no doubt therefore that the outcome of the civil action will have a direct bearing on
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`the question of the rights of the parties herein and may in fact completely resolve all the
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`issues.” .
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`The Petition for Cancellation raises different claims and seeks different relief from the
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`trademark counterclaim in the federal court action. Therefore, there is no justification for
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`suspending the cancellation pending the final outcome of the federal court action, since a
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`suspension would unnecessarily delay the adjudication of the fraud and lack of ownership claims
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`raised in the Petition and would be unfairly prejudicial to Petitioner.
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`

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`III.
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`THE MAIN CLAIMS IN THE CIVIL COURT ACTION HAVE BEEN
`RESOLVED IN FAVOR OF SLESINGER AND THE ALLEGED STIPULATION
`IS IRRELEVANT
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`Disney filed their Motion to Suspend on February 2, 2007, at which time all claims in the
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`district court action were still pending. However, on February 15, 2007, the judge in the federal
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`court action entered an Order granting Defendant Slesinger’s Motion for Summary Judgment on
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`Disney’s claims. (Exhibit 2.)]
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`Moreover, contrary to Disney’s assertions, the October 19, 2006 Stipulation between the
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`parties does not apply to the Board’s adjudication of the issues raised in the Petition for
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`Cancellation. Disney claims that the parties agreed “that the trademark issues will be resolved in
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`a subsequent phase of the pending district court case.” (Respondent’s Motion at p. 2.) This is an
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`overly broad reading of the stipulation and the supposed purpose of the stipulation. The
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`stipulation only pertained to Disney’s time to answer the counterclaims in Slesinger’s Fourth
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`Amended Answer; there is nothing in the stipulation which prevents Slesinger from raising
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`separate trademark issues in another action, such as the current Petition for Cancellation.
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`Moreover, in light of the federal court’s decision granting summary judgment to Slesinger on
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`Disney’s copyright claims (referred to in the Stipulation as the “Phase 1” trial), the continued
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`viability of the Stipulation is seriously suspect.
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`1 The summary judgment order was filed under seal, for attorneys’ eyes only. Therefore, Petitioner is not
`attaching a copy of the order, but instead attaches as Exhibit 2 a minute order reflecting the summary judgment.
`5
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`

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`III.
`
`CONCLUSION
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`For the reasons set forth above, Slesinger respectfully requests that the Board deny
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`Disney’s Motion to Suspend and allow the cancellation to proceed.
`
`Respectfully submitted,
`
`STEPHEN SLESINGER, INC.
`
`
`
` Andrew W. Skale
`Fred W. Hathaway
`Bryce J. Maynard
`Attorneys for Petitioner
`
`Date: February 22, 2007
`
`BUCHANAN INGERSOLL & ROONEY PC
`
`1737 King Street
`Alexandria, VA 22314—2727
`
`Telephone: 703/836-6620
`Facsimile: 703/836-2021
`
`

`
`CERTIFICATE OF SERVICE
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`I hereby certify that a true copy of the foregoing PETITIONER’S OPPOSITION TO
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`RESPONDENT’S MOTION TO SUSPEND PROCEEDINGS PURSUANT TO 37 C.F.R. §
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`2.117 was served this 22nd day of February, 2007, by first-class mail, postage prepaid, on:
`
`Dale M. Cendali, Esq.
`O’Me1veny & Myers LLP
`7 Times Square
`New York, NY 10022
`
`31%»,
`
`Fred W. Hathaway
`
`L
`
`#1l18230—v1
`
`

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`Exhibit 1
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`1»
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`42 ‘,U}§c,JR“‘T?.’i, s STEPHEN SLESINGER, INC.’S FOURTH AMENDED ANSWER AND COUNTERCLAIMS
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`Milne, er al. v. Stephen Slesinger, Inc., Case No. CV-02-08508 FMC (PLAx)
`i
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`TABLE QF CONTENTS
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`Page N0.
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`ANSWER .
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`COUNTERCLAIMS .
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`I.
`INTRODUCTION .
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`II.
`JURISDICTION AND VENUE .
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`III.
`THE PARTIES .
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`IV.
`FACTUAL BACKGROUND .
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`A.
`THE POOH FAMILY OF CHARACTERS ARE BORN .
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`B.
`C.
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`F.
`S G.
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`BACKGROUND ON STEPHEN SLESINGER .
`INITIAL AGREEMENTS BETWEEN MILNE AND
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`STEPHEN SLESINGER POPULARIZES POOH .
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`SHIRLEY SLESINGER LASSWELL CONTINUES TO
`DEVELOP THE POOH FAMILY OF CHARACTERS .
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`SLESINGER AND DISNEY: THE 1961 AGREEMENT. .
`UNDERPAYMENTS BY DISNEY ARE EXPOSED AND
`. 21
`THE PARTIES ENTER INTO THE 1983 AGREEMENT .
`DESPITE ITS PROMISES AND AGREEMENTS DISNEY
`CONTINUES TO UNDERPAY SLESINGER AFTER THE
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`1983 AGREEMENT .
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`DISNEY IMPROPERLY USES THE COPYRIGHT ACT TO
`ATTEMPT TO CUT OFF SLESINGER’S RI HTS .
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`THE POOH BRAND IS CRITICAL TO DISNEY’S
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`DISNEY’S IMPROPER ROYALTY STATEMENTS .
`K.
`CLAIMS FOR RELIEF .
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`V.
`PRAYER FOR RELIEF .
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`JURY DEMAND .
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`1
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`Defendant Stephen Slesinger, Inc., by its attorneys, answers the First
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`2 Amended Complaint as follows:
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`3
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`4
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`1-3. Defendant admits that plaintiffs purport to assert that this Court has
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`subject matter, personal jurisdiction and venue as alleged in paragraphs 1, 2, and 3
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`5 but otherwise denies the allegations contained in these paragraphs.
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`6
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`4.
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`Defendant denies having sufficient knowledge or information to form
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`a belief as to the allegations contained in paragraph 4 and therefore denies the
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`same.
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`5.
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`Defendant denies having sufficient knowledge or information to form
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`a belief as to the allegations contained in paragraph 5 and therefore denies the
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`SEIITIC.
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`6.
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`Defendant denies the allegations contained in paragraph 6 to the
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`extent these imply that plaintiff Disney owns the Winnie-the-Pooh character, and
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`further denies having sufficient knowledge or information to form a belief as to
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`the remaining allegations of paragraph 6 and therefore denies the same.
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`7.
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`Defendant denies the allegations contained in paragraph 7 except
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`admits it is a New York Corporation with its principal place of business in Tampa,
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`18 Florida, that much of its revenues are derived from payments made to it by
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`19 Disney-related entities pursuant to an agreement dated April 1, 1983, in which it
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`20
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`licensed to Walt Disney Productions certain rights it obtained from the trustees of
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`21 Pooh Properties Trust, also on April 1, 1983 (the "l983 Agreement").
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`22
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`23
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`8.
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`Because the allegations contained in paragraph 8 are conclusions of
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`law that require neither an admission nor a denial, defendant respectfully refers the
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`24 Court to the statute and authorities interpreting the same for the meaning thereof.
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`25
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`9.
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`Because the allegations contained in paragraph 9 are conclusions of
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`law that require neither an admission nor a denial, defendant respectfully refers the
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`27 Court to the statute and authorities interpreting the same for the meaning thereof.
`28
`
`STEPHEN SLESINGER, INC.’S FOURTH AMENDED ANSWER AND COUNTERCLAIMS
`Milne, et al. v. Stephen Slesinger, Inc., Case No. CV-02-08508 FMC (PLAX)
`
`]
`
`6
`IAW ()H>'1Cl.-‘.5
`
`COTCHETT,
`PITRE, SIMON &
`MCCARTHY
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`

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`1
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`2
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`10. Defendant denies the allegations contained in paragraph 10 but admits
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`that plaintiffs characterize their action as set forth therein.
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`11. Defendant denies having sufficient knowledge or information to form
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`a belief as to the allegations contained in the first sentence of paragraph 11 and
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`therefore denies the same, and denies the remaining allegations contained in
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`6 paragraph 11.
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`7
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`12. Defendant admits the allegations contained in paragraph 12.
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`13. Defendant denies having sufficient knowledge or information to form
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`a belief as to the allegations contained in paragraph 13 and therefore denies the
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`10
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`same.
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`11
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`14. Defendant denies the allegations contained in paragraph 14 except
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`admits that in January 1930 A. A. Milne and defendant's predecessor, Stephen
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`13 Slesinger, entered into a Memorandum of Agreement (the "1930 Grant"), which
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`14 memorandum speaks for itself, and defendant respectfully refers the Court thereto
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`for the contents thereof and further admits the allegation contained in the last
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`sentence of paragraph 14.
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`15. Defendant denies having sufficient knowledge or information to form
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`a belief as to the allegations contained in paragraph 15 and therefore denies the
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`same.
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`16. Defendant admits that it entered into an agreement in 1961 with Walt
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`21 Disney Productions (the " 1961 Slesinger Disney Agreement") and further admits
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`22
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`23
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`that Walt Disney Productions entered into an agreement in 1961 with the
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`executors of the Milne estate and with Daphne Milne in her individual capacity,
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`24 which agreements speak for themselves, and defendant respectfully refers the
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`25 Court to the contents thereof and otherwise denies the allegations contained in
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`26 paragraph 16.
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`27
`28
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`17. Defendant denies the allegations contained in paragraph 17 except
`admits that in 1983 it entered into a new agreement with Walt Disney Productions,
`
`STEPHEN SLESINGER, INC.’S FOURTH AMENDED ANSWER AND COUNTERCLAIMS
`Milne, et al. v. Stephen Slesinger, Inc., Case No. CV-02-08508 FMC (PLAX)
`
`2
`
`Q
`déiéiiéiii,
`PITRE, SIMON &
`MCCARTHY
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`

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`1
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`Slesinger, Christopher Milne - plaintiff Clare Milne's father — and the Pooh
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`Properties Trust in which, inter alia, the 1930 Grant by A. A. Milne to defendant's
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`predecessor, and all amendments thereto, were revoked and a new grant of rights
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`was made to defendant and further admits that in 1983 Walt Disney Productions
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`and the Pooh Properties Trustees entered into an agreement.
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`18. Defendant denies having sufficient knowledge or information to form
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`a belief as to the allegations of paragraph 18 and therefore denies the same except
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`asserts that the Termination Notices purportedly served by plaintiff Clare Milne
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`and Harriet Jessie Minette Hunt (the "Termination Notices") speak for themselves,
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`and respectfully refers the Court thereto for the contents thereof.
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`19. Defendant denies having sufficient knowledge or information to form
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`a belief as to the allegations contained in paragraph 19 and therefore denies the
`same.
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`20. Defendant incorporates herein by reference all of the allegations and
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`averments contained in paragraphs 1 through 19 of this Answer.
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`21. Defendant denies having sufficient knowledge or information to form
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`a belief as to the allegations contained in paragraph 21 and therefore denies the
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`same.
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`22. Defendant denies the allegations contained in paragraph 22.
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`23. Defendant admits the allegations contained in paragraph 23.
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`24. Defendant denies the allegations contained in paragraph 24 except
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`admits that Milne alleges that Milne seeks a declaration that the Milne
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`Termination Notice is valid.
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`25. Defendant incorporates herein by reference all of the allegations and
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`averrnents contained in paragraphs 1 through 24 of this Answer.
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`26. Defendant denies having sufficient knowledge or information to form
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`a belief as to the allegations contained in paragraph 26 and therefore denies the
`same.
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`27
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`STEPHEN SLESINGER, INC.’S FOURTH AMENDED ANSWER AND COUNTERCLAIMS
`Milne, et al. v. Stephen Slesinger, Inc., Case No. CV-02-08508 FMC (PLAX)
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`3
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`QLAW I ll-TICIZS
`COTCHETI‘,
`PITRE, SIMON &
`MCCARTHY
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`27.
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`28.
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`Defendant admits the allegations contained in paragraph 27.
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`Defendant denies the allegations contained in paragraph 28 except
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`admits that Disney alleges that it seeks a declaration that the Hunt Termination
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`Notice is valid.
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`AFFIRMATIVE DEFENSES
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`FIRST COMPLETE AFFIRMATIVE DEFENSE
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`29.
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`Plaintiffs’ First Amended Complaint fails to state a claim upon which
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`relief may be granted.
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`SECOND COMPLETE AFFIRMATIVE DEFENSE
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`30.
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`Plaintiffs’ claims fail because the agreement or agreements they claim
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`will be terminated by the Termination Notices were lawfully revoked in 1983 and
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`are no longer subject to termination.
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`THIRD COMPLETE AFFIRMATIVE DEFENSE
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`31.
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`Plaintiffs‘ claims with respect to the agreements and events that took
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`place in 1983 are barred by the doctrines of laches, waiver, and/or estoppel.
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`FOURTH COMPLETE AFFIRMATIVE DEFENSE
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`32.
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`Plaintiffs‘ claims based upon the alleged validity and effectiveness of
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`the Termination Notices served by Milne and Hunt on or about November 4, 2002
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`are legally untenable because: (1) such Termination Notices fail to comply with
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`the requirements of the United States Copyright Act as to identification of the
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`grants purportedly terminated and of the works allegedly covered by such
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`Termination Notices; and/or (2) Slesinger‘s rights at issue are not encompassed by
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`the grants purportedly identified in such Termination Notices but are included in
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`other agreements or were otherwise obtained by Slesinger, including but not
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`limited to, by virtue of agreements, consents, or by operation of law.
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`STEPHEN SLESINGER, INC.’S FOURTH AMENDED ANSWER AND COUNTERCLAIMS
`Milne, er al. v. Stephen Slesinger, Inc., Case No. CV-02-08508 FMC (PLAx)
`
`4
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`27
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`28
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`8I.Awnl~H(.'l:‘S
`COTCHETT,
`PITRE, SIMON &
`MCCARTHY
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`FIFTH COMPLETE AFFIRMATIVE DEFENSE
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`33.
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`Plaintiffs‘ claims should be dismissed because plaintiffs have failed to
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`join the Pooh Properties Trust and the Walt Disney Company, which are necessary
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`and/or indispensable parties hereto pursuant to Fed. R. Civ. P. 19.
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`SIXTH COMPLETE AND/OR
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`PARTIAL AFFIRMATIVE DEFENSE
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`34.
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`Plaintiffs‘ claims with respect to the validity and effectiveness of the
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`8 Termination Notices served by Milne and Hunt on or about November 4, 2002, are
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`9 barred by the doctrines of laches, waiver, and/or estoppel.
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`SEVENTH COMPLETE AND/OR
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`PARTIAL AFFIRMATIVE DEFENSE
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`35. Any termination by Milne and/or Hunt pursuant to section 304(d) of
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`the United States Copyright Act of the 1930 Grant or the 1983 Agreement could,
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`inter alia, only affect rights under United States copyright granted thereunder.
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`15 Such termination could not have any effect on Slesinger's rights to continue to
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`16 utilize derivative works prepared pursuant to rights granted to Slesinger in the
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`17
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`1930 Grant or thereafter, or to continue to exercise rights and/or receive royalties
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`18 not arising under the United States Copyright Act, including but not limited to
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`those arising under federal, state, and/or foreign trademark and unfair competition
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`laws or under foreign copyright laws.
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`EIGHTH COMPLETE AFFIRMATIVE DEFENSE
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`36.
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`Plaintiffs’ claims are barred by the doctrine of unclean hands.
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`NINTH COMPLETE AFFIRMATIVE DEFENSE
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`37.
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`Plaintiffs’ claims are barred by the statute of limitations including but
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`25 not limited to, Cal. Civ. Code. §§ 337 - 1, 3, 338(d), 339 -1, 3, and 343.
`26
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`®
`LAW UH-'K‘.l£s
`COTCHETT,
`PITRE, SIMON &
`MCCARTHY
`
`STEPHEN SLESINGER, INC.’S FOURTH AMENDED ANSWER AND COUNTERCLAIMS
`Milne, et al. v. Stephen Slesinger, Inc., Case No. CV-02-08508 FMC (PLAX)
`
`5
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`

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`TENTH COMPLETE AND/OR
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`PARTIAL AFFIRMATIVE DEFENSE
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`38.
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`Plaintiffs‘ claims are premature, as there is no substantial controversy
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`of sufficient immediacy to warrant judicial determination.
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`ELEVENTH COMPLETE AND/OR
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`PARTIAL AFFIRMATIVE DEFENSE
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`39.
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`(a)
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`Plaintiffs‘ claims fail because of one of the following:
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`The actions of Plaintiff Disney and the Walt Disney Company
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`(hereinafter, collectively, "Disney") in connection with the Termination Notices
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`and Disney having announced that it no longer intends to pay Slesinger royalties
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`effective November 4, 2004, represent a repudiation and anticipatory breach of the
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`1983 Agreement giving Slesinger the right to terminate all future rights of plaintiff
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`Disney thereunder and to recapture and exploit such rights;
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`(b)
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`Even if the Court deems the Termination Notices to be effective,
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`plaintiff Disney, and/or any other related entity would remain legally and
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`equitably obligated to pay to Slesinger the royalties provided for under the 1983
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`Agreement;
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`(0)
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`Disney violated its fiduciary and/or other obligations to Slesinger in
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`inducing attorney Michael Joseph Coyne ("Coyne"), purportedly acting on Milne's
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`behalf, and Hunt to serve the Termination Notices and in entering into its
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`surreptitious agreements with Coyne and Hunt, to appropriate to itself, without
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`payments to Slesinger, the very rights Slesinger obtained from the Pooh Properties
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`Trust, which Disney had agreed to exploit and for which it agreed to pay royalties;
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`(d)
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`By reason of Disney's fraudulent and inequitable conduct, even if the
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`Termination Notices were deemed effective, any such terminated rights which
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`Disney acquires for itself, and the proceeds thereof, would be held by Disney in
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`actual or constructive trust for the benefit of Slesinger;
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`
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`STEPHEN SLESINGER, INCJS FOURTH AMENDED ANSWER AND COUNTERCLAIMS
`Milne, er al. v. Stephen Slesinger, Inc., Case No. CV-02-08508 FMC (PLAx)
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`0LAW (JH-‘ICES
`COTCHETT,
`PITRE, SIMON &
`MCCARTHY
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`

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`(e)
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`Hunt has no right to exercise any right of termination under 17 U.S.C.
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`§ § 304(0) or (cl) of the United States Copyright Act, but even if they were held to
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`have such a right, Disney's inducing Coyne, purportedly acting on Milne's behalf,
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`and Hunt to bring about such a termination would be a tortious interference with
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`Slesinger's rights under contract;
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`(t)
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`Hunt has no right to exercise any right of termination under 17 U.S.C.
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`§ § 304(c) or (d) of the United States Copyright Act, because the illustrations in
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`question were works made—for-hire;
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`(g)
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`Hunt has no right to exercise any right of termination under 17 U.S.C.
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`§ § 304(c) or (d) of the United States Copyright Act, because Hunt agreed to the
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`1983 Agreement, either directly or through an agent, and therefore cannot now
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`claim that a revocation and regrant is not operative;
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`Under Cal. Evid. Code § 622, plaintiffs are prohibited from
`(h)
`contradicting, inter alia, those recitals in the 1983 Agreement providing that the
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`1930 Grant was revoked and a new grant made; and
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`(i)
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`Under Cal. Civ. Code § 3521, plaintiffs cannot accept the benefits of
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`the transaction provided to them by the 1983 Agreement (e.g., the rights), without
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`bearing the burden of that transaction (e.g., the royalty obligations).
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`TWELFTH COMPLETE AND/OR
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`PARTIAL AFFIRMATIVE DEFENSE
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`40.
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`Plaintiffs fail to state a claim because the 1930 Grant that plaintiffs
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`allege will be terminated by the Termination Notices was not principally a grant of
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`any rights under copyright and thus is not eligible for termination under Section
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`304 of the United States Copyright Act.
`
`STEPHEN SLESINGER, INC.’S FOURTH AMENDED ANSWER AND COUNTERCLAIMS
`Milne, er al. v. Stephen Slesinger, Inc., Case No. CV-02-08508 FMC (PLAX)
`
`7
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`®LAW Ulv'l"lCl-IS
`COTCHETI‘,
`PITRE, SIMON &
`MCCARTHY
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`

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`THIRTEENTH COMPLETE AND/OR
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`PARTIAL AFFIRMATIVE DEFENSE
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`41.
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`Because the various paragraphs of plaintiffs’ First Amended
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`Complaint do not comply with FED. R. Civ. P. 8(a) and (e), Slesinger is not
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`required to separately admit or deny each averment contained therein.
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`FOR THESE REASONS, Slesinger prays that the Court dismiss all of
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`plaintiffs‘ claims and find for Slesinger on all counts, that Slesinger be awarded its
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`costs, including reasonable attorneys’ fees under Section 505 of the United States
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`Copyright Act, and prays for such other and further relief as this Court deems just
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`and proper.
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`8LAW OFHCI-ZS
`Corcnsrr,
`PITRE, SIMON &
`MCCARTHY
`
`STEPHEN SLESINGER, lNC.’S FOURTH AMENDED ANSWER AND COUNTERCLAIMS
`Milne, er al. v. Stephen Slesinger, Inc, Case No. CV—02-08508 FMC (PLAX)
`
`8
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`

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`I.
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`INTRODUCTION
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`COUNTERCLAIMS
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`1.
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`Winnie-the-Pooh is instantly recognized throughout the world by his
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`rounded-yellow body and red shirt. Every year, he becomes more and more
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`popular through the selling of toys, clothing, novelties, and other products,
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`services, and commercial uses. Currently, it is estimated that Winnie-the-Pooh
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`brings in billions of dollars in annual income.
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`2.
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`The initial belief that Winnie-the-Pooh and his friends, as Milne’s
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`literary characters, could be successfully developed into distinctive and colorful
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`graphic characters and personalities, marketed internationally as characters outside
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`of books, belongs to a single man, Stephen Slesinger.
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`3.
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`In 1930, Stephen Slesinger obtained, inter alia, rights to Winnie-the-
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`Pooh in the United States and Canada from the author, A.A. Milne. At the time he
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`transferred these rights, A.A. Milne represented that the rights “are absolutely and
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`exclusively owned by him, free and clear of any rights or claims of rights of any
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`other person.”
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`4.
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`After Stephen Slesinger transferred these rights to Defendant and
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`Third-Party Plaintiff Stephen Slesinger, Inc. (“Slesinger”), he transformed Winnie-'
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`the-Pooh and his friends from a series of black and white drawings into the
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`colorized bear and his friends, all well-known and loved throughout the world.
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`With vision and determination, Slesinger used marketing and character
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`development skills and developed Winnie-the-Pooh and his friends into successful
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`merchandising properties, in many product lines and services, and protecting these
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`product lines and services through intellectual property rights and contract rights
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`(the “Pooh Brand”). The Pooh Brand includes products or services that employ or
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`use (or are taken from or based upon) characters, materials, or titles developed by
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`A.A. Milne or Slesinger, or by authority of A.A. Milne or Slesinger.
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`28
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`STEPHEN SLESINGER, INC.’S FOURTH AMENDED ANSWER AND COUNTERCLAIMS
`Milne, et al. v. Stephen Slesinger, Inc., Case No. CV-02-08508 FMC (PLAX)
`
`9
`
`9LAW OF!-'|Cl-ZS
`Corcmsrr,
`PITRE, SIMON &
`MCCARTHY
`
`

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`5.
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`Following Slesinger’s successful efforts, in 1961 Disney entered into
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`agreements with Slesinger, A.A. Milne’s widow, and A.A. Milne’s estate to
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`obtain, among other rights, the right to market this successful brand. In 1983, the
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`parties revoked the 1930 Agreement and the 1961 Agreement and entered into a
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`new agreement.
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`6.
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`Rather than dealing fairly and honestly with Slesinger since executing
`
`the 1983 Agreement, Disney has intentionally and continuously failed to properly
`
`accumulate, calculate, and pay royalties to Slesinger, failed to report on gross
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`receipts without deduction, intentionally and continuously failed to report royalties
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`in a timely manner, engaged in unauthorized uses of Slesinger’s intellectual
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`property, tried to interfere with Slesinger’s rights to receive royalties and to make
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`false claims about its role in creating the Winnie—the-Pooh characters known
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`today.
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`7.
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`This lawsuit seeks a determination of the appropriate rights owned by
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`the respective parties and to recover substantial damages for the wrongs of Disney
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`and its co—conspirators, including, but not limited to, copyright, trademark, and
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`trade dress infringement.
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`II.
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`JURISDICTION AND VENUE
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`8.
`
`The Court has subject matter jurisdiction over this action pursuant to
`
`28 U.S.C. §§ 1331 and 1338. This Court also has original jurisdiction pursuant to
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`28 U.S.C. §l332(a), as this controversy exceeds the value of $75,000 and is
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`22 between citizens of different states. The Court has supplemental jurisdiction over
`23
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`Slesinger's state law claims pursuant to 28 U.S.C. §1367.
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`®l.I\WOFFlC|‘S
`COTCHETT,
`PITRE, SIMON &
`MCCARTHY
`
`9.
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`Venue is proper in this District pursuant to 28 U.S.C. §§1391(b),
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`1391(0), and 1400(3). The Disney Counter-Defendants are headquartered and/or
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`perform business in this District. A substantial part of the events, acts, omissio