The Rage Offstage at Marvel

Barron's - Jun 29, 2008

By BILL ALPERT Lawsuits raise questions about Marvel Entertainment's title to its billion-dollar character
franchises, which include The Incredible Hulk. ...

Comment by Richard Land, Spokesman, Marvel

Marvel Response to Barron’s Article - Jul 1, 2008

There are many unsubstantiated and false claims in the Barron’s article. It is unfair to Marvel and its
shareholders to dismiss Marvel’s position as simply attacking the messenger. Peter Paul has been convicted
of three felonies and is awaiting sentencing for his latest crime, manipulating the stock of Stan Lee Media.
His history speaks for itself. Marvel’s position with respect to Mr. Paul’s claims is not based on his lack of
credibility. It is based on facts in the public record.

There are three main falsehoods underlying Peter Paul and Stan Lee Media, Inc.’s claims against Marvel.

First is the claim that Marvel is not the sole owner of every character created by Stan Lee during Mr. Lee’s
lengthy tenure as a Marvel employee. Mr. Lee signed written employment agreements with Marvel in 1976
and 1980 in which Mr. Lee acknowledged and confirmed that all the work he did for Marvel from the
beginning of his employment (in 1940) was as an employee. As is customary in contracts reflecting works
made for hire, there was also a “belt and suspenders” assignment to Marvel of all rights in all characters he
had previously created or would create for Marvel in the future.

The fallacy of this argument is that all previous agreements to the November 17, 1998 agreement Stan
Lee entered into with Marvel AFTER it voided Stan's lifetime exclusive agreement and assignment
(which was the successor to ALL previous employment/rights assignments with Marvel) in August
1998 as Marvel emerged from bankruptcy, all previous agreements were voided as of August, 1998-
leaving a gap of assignments by Lee between Augsut and November 1998 when Lee coerced Marvel to
replace the contract they voided two minths earlier with an unprecedented contract that paid Lee
more than any other Marvel employee while requiring Lee to only spend 10% of his time working for
Marvel and allowing him to spend 90% of his time competing with Marvel using Marvel's characters!
Stan never confirmed anywhere in an assignment or contract with Marvel that hos works were work
for hire- instead he claimed ownership of his creations in his 2002 suit against Marvel for a profit
participation no other employee ever received!

The copyright law treats work done by an employee within the scope of his employment as a “work made
for hire” which means the employer is automatically the author and owner for copyright law purposes.
Therefore, Mr. Lee never owned any of the characters he created for Marvel. Since he never owned them, he
could never have transferred them to anybody. Mr. Lee himself has always acknowledged that the Marvel
characters belong and always belonged to Marvel.

This is another falsehood- merely review paragraphs 14, 15 and 39 of Stan Lee v Marvel Characters,
2002 Manhattan Federal Ct where Lee states “he expected to share in all profits derived by Marvel
from his world famous characters which had been conditionally assigned by Lee to Marvel under the
Nov 1998 agreement for that purpose”

Second, in order for Mr. Paul’s claims to have any traction, a court would have to accept that when Marvel
rejected Mr. Lee’s contract in the bankruptcy proceeding, that rejection somehow resulted in a return to Mr.
Lee of rights in Marvel’s characters. Not only did Mr. Lee never have those rights, but the rejection of Mr.
Lee’s contract did not and could not have had that effect. Neither Mr. Paul nor SLMI has ever pointed to any
legal support for their theory because they simply made it up.

Stan Lee Media clearly stated in its suit against Marvel Entertainment 2007 for an accounting of its
share of Marvel's profits on Stan Lee's creations, rights for which were assigned by Lee to SLM in
October, 1998 as published in SLM's 10K March 2000, that all rights Lee assigned to Marvel were
conditional upon the lifetime contract with Marvel being intact. When that part of Lee's conditional
assignment to Marvel was voided- it voided and reverted all rights conditionally assigned because
Lee's ONLY compensation from Marvel for his rights was his employment salary. In contrast, in
Lee's Employment/Rights Assignment with Stan Lee Media Lee received 3.7 million shares of
company stock worth $10mm when issued, which was the consideration for Lee's assignment to SLM

Third, Mr. Paul has deliberately mischaracterized what happened in the 2002 Stan Lee/Marvel lawsuit. Since
the majority of the litigation papers are public record, there is no reason for anyone to be confused. That
lawsuit was over how to interpret a profit participation paragraph in Mr. Lee’s 1998 contract. It had nothing
whatsoever to do with ownership of any characters. Mr. Lee never claimed in that lawsuit or anyplace else
to own any part of any character he created for Marvel. In 2005, the profit participation lawsuit was
settled. While the terms are confidential, Mr. Lee did not “give back” or transfer to Marvel any interest in
any characters in the settlement.

This is a material false statement made by Marvel to the public because lee specifically claimed in his
2002 suit against Marvel to enforce the November 1998 assignment and employment agreement that
he mad a conditional assignment to Marvel of the rights to exploit his world famous creations with the
expectation of sharing in all profits from their exploitation! Read for yourself in Paragraphs 13, 14,
15, 39 of the Complaint. Marvel's Answer and Memo never claimed Stan's claims were bogus because
they were work for hire!

The truth is a lot duller than the spin Mr. Paul is trying to put on the facts. Stan Lee never owned any of the
characters he created and never claimed to own them. His contract with Stan Lee Media was and is clear
on its face that Stan Lee was giving to his new company all the rights in characters that he planned to
create for it – not any Marvel characters. Stan Lee Media was in business from approximately 1998-2001
when it went bankrupt. It made numerous filings with the SEC and issued a tremendous volume of
promotional material. Once it filed for bankruptcy, its assets were subject to intense scrutiny. Through all of
that time, it never once claimed that it owned any interest in any Marvel character.

Stan Lee's assignment to Stan Lee Media was global and included everything in the creative universe
that he owned, with no exceptions or carve outs. The key word in the assignment that refutes Marvel's
position is that the assignment was for all rights owned NOW and in the future by Stan Lee. NOW
referred to October 15, 1998 before he transferred his reverted righst to anyone else! Because Stan
Lee colluded with Marvel to hide his rights assignment in Stan Lee Media;'s sham Chapter 11
proceedings from February 2001 through November, 2006, no one could enforce any rights but Stan
who was Chairman of Stan Lee Media and Marvel at the same time!