Intellectual property suit against Disney has hedge fund support

A lawsuit involving a company formerly tied to iconic comic book publisher Stan Lee remains afloat thanks to the financial backing of hedge fund managers who wish to cash in on potential winnings once the dispute is resolved, according to Forbes.

Stan Lee Media, Inc. (SLMI) of Colorado was a corporation that managed the franchise of characters created by Lee, which include Spider-Man, The X-Men, The Incredible Hulk and The Fantastic Four. Since October 2012, SLMI has been embroiled in a lawsuit against the Walt Disney Corporation, which since 2009 has owned Marvel Comics, the publisher that helped launch those characters to international renown.

According to the lawsuit, SLMI – not Disney – holds the intellectual property rights to those four franchises and others developed by Lee because the creator signed them over to the organization when it was first developed. As a result, when Disney purchased Marvel, it technically did not have the right to use those characters since they were property of SLMI, the suit alleges.

Forbes reports that the lawsuit is financially supported by a group of investors, including Elliot Management, who support the company’s claim but who are not in any way associated with or investing in SLMI itself. Their involvement in the case is purely financial – should SLMI win, they could stand to gain a return on the potential winnings paid out by Disney.

It may seem to be an unusual arrangement, but Forbes reports that some hedge funds have been taking the calculated risk of support litigation as an investment vehicle. In Arizona, such involvement may add another level of intrigue to business lawsuits, but ultimately the responsibility of working out a solution in local cases rests with experienced business lawyers in Phoenix.

Categorised in: Intellectual Property Law

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