United States: Stephen Slesinger Estopped From Challenging Disney’s Ownership Of Winnie-The-Pooh Trademarks

In Stephen Slesinger, Inc. v. Disney Enterprises, Inc., No. 11-1593 (Fed. Cir. Dec. 21, 2012), the Federal Circuit affirmed the TTAB's dismissal of Stephen Slesinger, Inc.'s ("Slesinger") challenges, in twelve opposition and cancellation proceedings filed at the TTAB, to the trademark rights related to A.A. Milne's literary work featuring Winnie-the-Pooh and other characters owned by Disney Enterprises, Inc. ("Disney").  The Court found that the TTAB correctly ruled that the proceedings were barred by collateral estoppel.

For decades, Slesinger and Disney have disputed the Winnie-the-Pooh rights in federal courts and at the TTAB.  In 1930, A.A. Milne transferred to Stephen Slesinger exclusive merchandising and other rights based on those works in the United States and Canada.  In 1961, Slesinger exclusively "assigned, granted, and set over to" Walt Disney Productions the rights in the 1930 agreement with A.A. Milne.  Slip op. at 3 (citation omitted).  In 1983, Slesinger acknowledged its transfer and assignment of "rights it had acquired from A.A. Milne to Disney by agreement dated 14 June 1961."  Id. (citation omitted).  The 1983 agreement then revoked the prior agreements and gave Slesinger "all of the rights in the work which were transferred to [Slesinger] in 1930 and amended from time to time," but also transferred back to Disney those and "further" rights.  Id. (alteration in original) (citation omitted). 

While the 1983 agreement sought to resolve the parties' previous disputes and clarify their contractual obligations, the parties disagreed about the interpretation of that agreement.  Slesinger contended that it retained rights in the Winnie-the-Pooh works, while Disney maintained that Slesinger assigned all rights to Disney.

In 1991, Slesinger brought an action in Los Angeles Superior Court alleging that Disney had breached the 1983 agreement and had underpaid royalties to Slesinger.  In the California state court case, Slesinger acknowledged that the 1983 agreement "regranted, licensed and assigned all rights acquired rights [sic] to Disney," and explained that "the grant of all 'further rights' in and to the Pooh Characters [in the 1983 agreement] is a catch-all designed to ensure that Slesinger was granting . . . all of the additional commercial exploitation rights Slesinger acquired that are not specifically mentioned in the 1983 Agreement."  Id. at 4 (first alteration in original) (citation omitted).  The state court ultimately dismissed Slesinger's breach-of-contract claim and the California Court of Appeals affirmed.

The parties' dispute over royalties, however, proceeded in the District Court for the Central District of California and, in 2006, Slesinger amended its district court claim to allege that Disney's exploitation of the Winnie-the-Pooh characters infringed Slesinger's trademarks and copyrights.  Based on Slesinger's admissions in the state court action that Disney's uses of the Winnie-the-Pooh characters were authorized, Disney moved to dismiss the claim.  Disney also argued that Slesinger had granted all of the rights it had in the characters to Disney and that Slesinger had retained no rights that Disney could infringe.

In 2009, the district court considered the parties' cross-motions for SJ based on the 1983 agreement and addressed the agreement's scope and judicial estoppel, among other things.  The district court noted that the parties' actions showed that the Winnie-the-Pooh rights were transferred to Disney in the 1983 agreement.  For example, between 1983 and 2006, Disney registered at least fifteen trademarks relating to those rights and, in 2004, Disney registered copyrights in forty-five works and renewed copyright registrations for another fourteen.  Slesinger, on the other hand, did not attempt to perfect or register trademarks or copyrights before asserting its district court infringement claims and did not object to Disney's registrations until 2006, when the state court dismissed Slesinger's claims for breach of contract.  The district court also found that because Slesinger could not specifically identify any retained right in the Winnie-the-Pooh works, the contracts did not permit any retention of rights and Slesinger had granted its acquired rights to Disney.  Thus, based on the parties' conduct and the "clear terms" of the agreements, the district court found that Slesinger "transferred all of its rights in the Pooh works to Disney, and may not now claim infringement of any retained rights."  Id. at 5 (citation omitted).

Finally, the district court found that Slesinger was estopped from arguing that it did not relinquish all the rights it received from A.A. Milne to Disney because that argument was inconsistent with statements made and positions taken in the state court action.  Specifically, in state court, Slesinger had insisted that Disney's uses of the works were derived from the Slesinger grants of "'all' rights to sound, word, picture representation, television, any representational device, similar or allied devices, videocassettes, promotion and advertising in all media, exploitation and licensing in all media."  Id. (citation omitted).

The dispute at the TTAB began in December 2006, with Slesinger attempting to cancel certain trademarks based on the Winnie-the-Pooh work.  Slesinger claimed that the 1983 agreement with Disney was a license, and did not grant Disney the right to register the marks.  Disney argued that the 1983 agreement assigned all of the Winnie-the-Pooh rights to Disney and moved to dismiss the TTAB proceedings.  The TTAB treated the motion as one for SJ, and found that collateral estoppel barred Slesinger's claims and granted judgment for Disney based on the district court's decision.

"With such a clear explanation that Slesinger conveyed all rights completely to Disney, it is immaterial that the district court used the terms 'transfer' and 'grant' rather than 'assignment.'  Moreover, it is the court's ultimate 'judgment that matters,' not the language used to discuss the court's rulings."  Slip op. at 9 (citation omitted).

On appeal, the Federal Circuit applied the four-part test for collateral estoppel set forth in Laguna Hermosa Corp. v. United Staes, 671 F.3d 1284, 1288 (Fed. Cir. 2012):  "(1) a prior action presents an identical issue; (2) the prior action actually litigated and adjudged that issue; (3) the judgment in that prior action necessarily required determination of the identical issue; and (4) the prior action featured full representation of the estopped party."  Slesinger conceded that the case satisfied the first and fourth factors, and the Court agreed.  On the second factor, Slesinger argued that the district court did not properly consider the issue of the scope of the 1983 agreement, and it did not specifically declare that Slesinger "has no rights at all," implying that some rights might have survived the 1983 agreement.  Slip op. at 7.  Further, Slesinger argued that the district court's use of the term "retained rights" and its failure to use the word "assignment" (as opposed to "grant" or "transfer") implied that Disney licensed, rather than assigned, the rights.  The Court rejected these arguments, finding that the district court extensively analyzed the scope of the 1983 agreement based on the pleadings (Slesinger's Second Claim for Relief presented this issue) and the parties' briefing, which addressed the scope of the agreement as an assignment or license.  Thus, the Court found that the district court had litigated and decided the identical issue. 

The Court also agreed with the TTAB that the clear wording of the district court's order did not support Slesinger's contention that the decision was focused only on whether Disney's uses of the Winnie-the-Pooh works was authorized.  Rather, the Court found that the district court had determined that the 1983 agreement represented "a transfer from [Slesinger] to Disney of all of [its] interest in the Winnie-the-Pooh characters" and that Slesinger had transferred all of its rights in the Winnie-the-Pooh works to Disney, and could not claim infringement of any retained right.  Id. at 8 (citation omitted).   Further, the Court found that the conduct of the parties over fifty years (which the district court relied on in its decision) supported the finding that both parties treated the agreements as constituting a complete assignment and, thus, the record showed that the district court did not find that Slesinger retained any rights.  Rather, it had completely granted all of its rights to Disney as an assignment.  Finally, the district court ruled that it had "fully adjudicated all claims and counterclaims," and stated that "all of [Slesinger's] Counterclaims are dismissed on the merits and with prejudice."  Id. at 9 (alteration in original) (citation omitted).  Since Slesinger had specifically required an order directing that the TTAB correct Disney's Pooh-related trademark registrations to reflect Slesinger's name, the Court found that the district court had ruled on and denied that request.

Regarding the third element of the collateral estoppel test—which prevents the incidental or collateral determination of a nonessential issue from precluding reconsideration of that issue—the Court found that the district court's ruling was neither incidental nor collateral.  Rather, it directly addressed Slesinger's ownership interest in the Winnie-the-Pooh rights.  The Court found that the record showed that the evaluation of those rights was clearly an essential element of the judgment.  Specifically, the district court had to determine that issue before deciding whether Disney's uses of the Winnie-the-Pooh rights were infringing.  And it was essential to first determine whether Slesinger had any ownership rights in the marks before considering Slesinger's request to correct Disney's trademark registrations to Slesinger's name.

In sum, the Court found that the TTAB correctly applied collateral estoppel to prevent Slesinger from asserting a claim that its 1983 grant of rights to Disney was a license as opposed to an assignment.

Judge Reyna dissented, finding that the TTAB erred on two grounds:  (1) the district court did not actually decide the ownership issue, and (2) resolution of the ownership issue was not essential or necessary to the district court's decision on noninfringement.  Regarding point one, Judge Reyna noted that the district court did not explicitly state in clear, plain language whether the grant of rights, i.e., the transfer, was a license or an assignment.  Further, Judge Reyna found that the decision appeared to suggest that Slesinger retained some rights to the Winnie-the-Pooh trademarks, but that any rights retained were insufficient to support an infringement action.  This situation, according to Judge Reyna, was as suggestive of a license as an assignment and, accordingly, there was a reasonable doubt whether the district court had actually decided that the transfer was accomplished via an assignment.

Regarding point two, Judge Reyna found that the district court was not necessarily required to decide whether the transfer of the Winnie-the-Pooh trademarks was an assignment to resolve the issue of trademark infringement because an effective defense to a claim of trademark infringement can be made upon a showing of authorized use under a license.  Thus, Disney's ownership of the Winnie-the-Pooh trademarks was not the only rational basis on which a fact-finder could find noninfringement.  An equally rational basis would have been that Disney was authorized to use the marks under a license.  For these reasons, Judge Reyna concluded that the TTAB erred in applying the doctrine of collateral estoppel.

Judges:  Rader (author), O'Malley, Reyna (dissenting)
[Appealed from TTAB]

Last Month at the Federal Circuit - January 2013

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
27 Nov 2017, Seminar, London, UK

Finnegan partner Anthony Tridico will present “U.S. Patent Case Law Update” at the Chartered Institute of Patent Attorneys’ annual Patent Case Law Review.

28 Nov 2017, Seminar, Milan, Italy

Finnegan partner John Paul will present “Internet of Things: Patent Liability, Enforcement and Licensing” and will join the Mock WIPO Mediation at International Technology Transfer—Licensing and ADR, co-hosted by Licensing Executives Society and World Intellectual Property Organization.

29 Nov 2017, Seminar, Tel Aviv, Israel

Finnegan is a platinum sponsor IVC Research Center’s start-up forum, “The Most Promising Start Ups for 2017 – A Synergy of Big Data, Artificial Intelligence, Machine Vision and IoT.”

 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.