Grant of Rights to "Winnie the Pooh" Upheld Over a Disney-Funded Challenge by Author's Heir

Case: Milne v. Stephen Slesinger Inc., No. 04-57189 (9th Cir. 12/8/05)


The One Sentence Summary: The Sonny Bono Copyright Term Extension Act of 1998 (“CTEA”) did not invalidate a 1983 agreement to revoke and re-issue the original grant of rights to the "Winnie the Pooh" characters.


What They Were Fighting About: In 1930, the author of the "Winnie the Pooh" books granted exclusive rights in the United States to the predecessor of defendant Stephen Slesinger, Inc. (SSI). The 1976 Copyright Act gave a right of termination to the author's heirs. With the bargaining power created by that right of termination, the authors' heirs reopened negotiations with SSI. In 1983, SSI and the heirs entered into a new agreement revoking the earlier assignment and making a new assignment for greater royalties. Plaintiff Claire Milne, the granddaughter of the author, challenged the 1983 agreement in this litigation (which was funded by Disney) based upon the provisions of the CTEA. The district court granted judgment on the pleadings to defendant SSI, holding that the 1983 agreement was valid. The Ninth Circuit affirmed.

Ninth Circuit Holdings:

• The 1983 agreement to terminate the 1930 license was valid, and was not an "agreement to the contrary" in the meaning of 17 U.S.C. § 304(c)(5). Section 304(c)(5) states that “[t]ermination . . . may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant.” 17 U.S.C. § 304(c)(5).
• The legislative history indicates that Congress intended to allow parties to revoke prior licenses or assignments and negotiate new agreements rather than simply requiring that all pre-1978 grants be terminated.
• Upholding the 1983 license agreement here would not create a "parade of horrors." As the court observed:

  The strength of a proposed parade of horrors, however, lies “in direct proportion to (1) the certitude that the provision in question was meant to exclude the very evil represented by the imagined parade, and (2) the probability that the parade will in fact materialize.” Harmelin v. Michigan, 501 U.S. 957, 986 n.11 (1991) (Scalia, J., concurring). The application of these factors here shows that Clare’s imagined parade will never march forward.
  

• There was no requirement for a "moment of freedom" between the original grant and the renewed grant.