The Winnie the Pooh franchise has been the single most lucrative in Disney's portfolio, accounting for as much as 20% of the Walt Disney Corporation's earnings in 2001 (greater by far than even Mickey Mouse) but what few people seem to know about is that the world's best-loved bear is at the heart of an obscure but bitter legal controversy that has been going on for many years. The case is rightly called Stephen Slesinger Inc. v. Walt Disney Corporation.
It all began in 1929, when New York literary agent and promoter Stephen Slesinger purchased from British author A.A. Milne the rights to the Winnie the Pooh characters and stories in North America. Note that this was an outright sale of rights, not a mere licensing arrangement made between Milne and Slesinger. In 1932 Slesinger and Milne made a written agreement that expanded the original grant of rights to include depictions of the Winnie the Pooh characters in television, radio, puppet shows, and devices that would be "analogous" to television in the future. The meaning of this 1932 document is still being contested by Disney seventy years later.
Slesinger developed a best-selling set of phonograph records based on the Winnie the Pooh stories in the 1930's and 1940's, and oversaw the creation of a popular (non-Disney) cartoon. After his death in 1953, his widow Shirley Slesinger-Lasswell (she later married cartoonist Fred Lasswell) developed a line of children's clothing which sold all over the United States. She then entered into a licensing agreement with the Walt Disney Corporation in 1961, and then the troubles started.
Disney almost immediately relicensed the Pooh clothing line to Sears and Roebuck, but by 1966 Lasswell began seeing items at Sears and elsewhere that were not described or mentioned in her royalty reports. As the Pooh characters began to grow in popularity the number of undeclared items grew as well, and Lasswell sent her lawyers to Disney with a cease and desist order that would terminate the licensing agreement unless these discrepancies could be resolved.
This dragged on until 1983, and in 1984 Disney finally paid the Slesinger estate about US$750,000 (released documents are sketchy on this figure, and the estate says that this sum was later increased) in back royalty payments. As part of the deal Disney continued to pay royalties to them for 15 years, including royalties for two children's computer software titles that used Winnie the Pooh, but Disney later claimed it had done so in error and alleged that this right was not granted to the Slesinger estate by Milne in the 1932 agreement.
In 1991, the Slesinger estate sued Disney yet again for continuing to shortchange them on royalties due with the 1983 deal, which mostly hinged on video rentals and computer software. Disney suffered a grave setback when it came out that they had shredded thousands of important documents that might have provided evidence to the Slesinger estate. In a first order of sanctions, in June 2000 Judge Ernest Hiroshige found Disney liable for willful suppression of evidence.
The case is still going on, and in the meantime Disney has acquired the remaining rights not obtained by Slesinger from the estates of Milne and Ernest Shepard (the original illustrator of the Pooh books), and are attempting, with little success, to use this to regain the rights sold to Slesinger back in 1929. Orders have been issued to audit both Disney and Slesinger to determine how much in back royalties are owed, and further hearings on whether or not computer software and video rentals are actually covered by the 1932 agreement between Milne and Slesinger.
Oh, bother!, the hypocrisy of it all...
References
Don Markstein's Toonopedia, Winnie the Pooh, http://www.toonopedia.com/pooh.htm
"Disney Loses $1bn Pooh Appeal", http://news.bbc.co.uk/1/hi/business/2786989.stm
http://www.monitor.net/monitor/0201a/pooh1.html
Joe Shea, "Judges hand Disney devastating loss in Pooh appeal," http://www.american-reporter.com/2114/761.html
Ben Berkowitz, "Disney asks court to dismiss 'Pooh' lawsuit," ttp://ragingbull.lycos.com/mboard/boards.cgi?board=DIS&read=6853