Swarming around rights to Pooh's honeypot

NEW YORK - The battle over the rights to the Winnie the Pooh characters is about to be resolved, with a succession of high-profile legal actions heading back to court.

At stake is the hugely lucrative market in Pooh characters on screen and Pooh cuddly toys, videos and other merchandise, controlled by Walt Disney, America's second-largest media company.

Disney is coy about how valuable the licence is, but Winnie the Pooh, created in the 1920s by the English writer A.A. Milne, is an undoubted honeypot. The bear is the studio's most profitable character, far more lucrative than its home-grown cartoon characters Mickey and Minnie Mouse, Donald Duck and Pluto put together. Estimates put the franchise income at between US$3 billion and US$6 billion ($9.6 billion) a year. (Disney's annual revenue is about US$32 billion.)

Pooh's contribution to Disney's bottom line gained extra importance last week with the downgrading of the company to "sector under-performer" by the New York analyst Jason Helfstein of CIBC World Markets.

Visitor numbers at its theme parks have been disappointing, and Disney now has fewer television shows in syndication. Its shares slumped 4.1 per cent on the news.

At issue in the unresolved Pooh court actions is the ownership of the rights to the characters from the Hundred Acre Woods. Two weeks ago, the US Supreme Court declined to offer an opinion on an attempt by Milne's granddaughter, Clare, backed by Disney, to take back the rights granted by Milne to his American agent, Stephen Slesinger, in 1930. The rights are now owned by Slesinger's widow, Shirley, and daughter, Pati.

The aim of Milne, who suffers from cerebral palsy, was to strike a new rights deal with Disney that would have benefited a charity for the disabled. The Disney-Milne argument was that a copyright extension provided by a change in the law had allowed the terms of the original agreement to be renegotiated. That was in spite of a deal agreed in 1983 by Ms Milne's father, the hero of the Pooh books, Christopher Robin Milne.

The Supreme Court's inaction has dealt a severe blow to Ms Milne's case. But it is not the end of the matter. The dispute has been referred back to the Ninth Circuit Court, in California, which must now decide unanswered issues. Chief among them is whether Minette Hunt, the granddaughter of the original Pooh artist, E.H. Shepard, can mount a similar Supreme Court action against the Slesingers.

A further unresolved dispute is awaiting a hearing in the California state appeals court. It concerns the Slesingers' claim that Disney has cheated them out of millions in Pooh merchandise income.

Although the court threw their case out in the light of their "willingness to tamper with, and even corrupt, the litigation process", the Slesingers claim similar bad behaviour by Disney. The importance of the Pooh revenue to Disney and the tenacity of the company's lawyers are likely to ensure that the legal battles will continue far into the future, according to the Slesingers' lawyer, Steven Sherr.

- INDEPENDENT