Interoffice Memorandum
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KEY WEST OFFICE MEMORANDUM 1010 KENNEDY DRIVE, SUITE 201 KEY WEST, FL 33040-4019 TELEPHONE: 305.296.8480 FACSIMILE: 305.293.7825 TO: Bill Andersen, The Andersen Firm ST. AUGUSTINE OFFICE 1200 PLANTATION ISLAND DRIVE, S. T SUITE 220 ST. AUGUSTINE, FL 32080-6188 i TELEPHONE: 904.471.5040 FACSIMILE: 904.461.9312 m WINTER PARK OFFICE 2180 PARK AVENUE NORTH, SUITE S 318 WINTER PARK, FL 32789-2358 n TELEPHONE: 866.296.8496 i FACSIMILE: 305.293.7825 d ORLANDO OFFICE 716 E. COLONIAL DRIVE e ORLANDO, FL 32803-4639 TELEPHONE: 407.875.0922 r FACSIMILE: 407.875.1303 , TRI-CITIES OFFICE 415 BROAD STREET, SUITE 601 KINGSPORT, TN 37660-4264 N TELEPHONE: 423.378.3040 L FACSIMILE: 423.378.5773 R E-MAIL: [email protected] G Stan Lee Media, Inc., James Nesfield Chris Belland, FROM: The Andersen Firm DATE: January 26, 2007 RE: Stan Lee Media, Inc./Statement of Facts ____________________________________________________________ I. Parties A. Stan Lee Stan Lee is the American pop icon writer and super hero creator of 80% of the character franchises owned by Marvel Entertainment, Inc., formerly Marvel Comics, Inc., which has been a publicly traded company since 1994 (“Marvel”). From approximately 1961 through 1971, Stan Lee wrote various comic books, introducing characters that have become among the largest entertainment franchises in the world today. Stan Lee wrote the comic books on a "free-lance" basis at home when he needed extra money. He was paid separately from his salary as an Editor, Art Director and Chief Writer, working in Marvel's offices. Thus, Stan Lee has reasonably asserted his co- creator's interest in the copyrights that Marvel filed as publisher have remained his and were not ever ceded to Marvel as Works For Hire, as evidenced by Marvel's conduct in dealing with him since his first contract in 1968. SERVING CLIENTS IN: AVENTURA • BOCA RATON • BRISTOL • CHATTANOOGA • CLEARWATER • CORAL GABLES • DAYTONA BEACH • DELRAY BEACH • FERNANDINA BEACH • FORT LAUDERDALE • FORT MYERS • GAINESVILLE • JACKSONVILLE • JOHNSON CITY • KEY LARGO • KEY WEST • KINGSPORT • KNOXVILLE • MARATHON • MIAMI • MORRISTOWN • NAPLES • OCALA • ORLANDO • PALM BEACH • PALM BEACH GARDENS • PALM COAST • PONTE VEDRA • PORT CHARLOTTE • SARASOTA • ST AUGUSTINE • ST PETERSBURG • STUART • TAMPA • VENICE • WEST PALM BEACH • WINTER PARK • OTHER MARKETS IN THE EASTERN UNITED STATES • EUROPE • ASIA During 1961-1971, Stan Lee's co-creations included Spider Man, X-Men, Fantastic Four, The Incredible Hulk, Ironman, Daredevil, Silver Surfer as well as many super-villains notably, Dr. Doom. Spider Man would be the most vulnerable to Stan Lee's claims of co-ownership because he created it over the objection of, and against the specific directive by his publisher and employer, not to create a teenage super hero based on a spider. The determining issue under the 1909 Copyright Act, applicable to Stan Lee’s activities from 1961-1971, is whether Stan Lee's co-creator's rights are owned by him or Marvel. The primary issue has never been adjudicated, contractually resolved, and remains the biggest question in the Entertainment business today. As set forth below, Stan Lee's rights are now legally owned and recorded in the copyright office in the name of Stan Lee Media Inc. (“SLM”) The enforceability of Stan Lee's co-creator's rights to Marvel's flagship character franchises can only be resolved by a factual determination whether Stan Lee's free lance writing at home constituted a “work for hire” under the 1909 Copyright Act based on facts known to only two living witnesses, without any contemporaneous documentary evidence surviving. The senior intellectual property partners of two multinational firms have been unanimous that if Stan Lee's rights were litigated, they would survive summary judgment and would finally be decided by a jury. One intellectual property expert described such jury consideration of Stan's rights as a “horse race” that Marvel could never afford to bet on. There are no documents that survive the various mergers and acquisitions of the predecessor companies that ultimately became Marvel, which was so named by Stan Lee. Copyrights were filed by Marvel's predecessor, Timely Comics, Inc., as publisher of the compilation of works. However, Stan Lee never signed any independent, formal recorded documents with the United States Copyright Office. Stan Lee's co-creator rights to Marvel's copyrights were only assigned in connection with a succession of Employment Agreements with Marvel between 1975 and 1998. Until SLM recorded the Assignment made by Stan Lee in October 1998, of all of Stan Lee's creations and named titles, including those referred to above and “Stan Lee Presents”, there is no prior record of any assignment by Stan Lee, including the November 1998 assignment to Marvel, which is discussed below. A copy of an email from Peter Paul to Chris Belland, entitled, “The History of Stan Lee Creative Rights”, describes in great detail what characters and images constitute the intellectual property at issue. (Exhibit “A”). B. Timely Comics, Inc. Timely Comic, Inc. employed Stan Lee from 1945 through 1960 when it became Marvel Comics, Inc. During Stan Lee’s employment at Timely Comics, Inc., he was responsible for the unprecedented creation of a consumer friendly culture that incorporated the consumer as a member of the “family” with the publisher and its employees. C. Marvel Comics, Inc. (“Marvel”) Marvel employed Stan Lee continuously from 1960 to August 1998. In August 1998, Marvel was in the process of being acquired out of Chapter 11 Bankruptcy protection by Toy Biz, Inc. Stan Lee’s contract with Marvel was voided. When the contract was voided, Stan Lee’s exclusive license to use his creations, and his bar on making any claims to his co-creator rights, was also voided. After Stan Lee’s contract was voided, Stan Lee sought the assistance of Peter Paul to find a lawyer to represent his interest and to possibly negotiate a new contract with Marvel that allowed him for the first time to start his own company and compete with Marvel.. D. POW Entertainment, L.L.C. (“POW”) POW is a Delaware limited liability company, incorporated by Stan Lee's lawyer, Arthur Lieberman, on November 8, 2001, in preparation for a step transfer of assets from SLC to POW without notice to the creditors 2 and Court, and in violation of express warranties in the Court approved Sale of Assets not to transfer assets without approvals from the secured creditor. In 2003, there was a purported transfer of assets from SLC-(which still did not legally exist)-to POW, which itself went public in a reverse merger in 2004 and trades under the symbol, POWN:PK. E. QED Productions, L.L.C. (“QED”) QED is another Delaware limited liability corporation that was incorporated by Stan Lee’s attorney, Mr. Arthur Lieberman, the same day as POW, November 8, 2001, in contemplation of transferring assets from SLC. QED has been alleged to be a subsidiary of POW and in July, 2006 certain character creations, such as the Accuser and Drifter, developed by Stan Lee for SLM, which were sold to SLC in the Sale of Assets, were later purportedly assigned by SLM to QED in a transfer recorded with the copyright office and signed by Debtor in Possession Representative, Kobyashi, and QED as COO Champion, both of whom are officers in POW with Stan Lee and Arthur Lieberman. The fraudulent assignment by SLM to QED in July 2006 was never ratified by the bankruptcy court, and occurred after the same assets had purportedly been sold under the Sale of Assets. It was done when SLM was dissolved and had no force or effect under Colorado law (“Assignment of Copyright”) (Exhibit “B”). F. Stan Lee Media, Inc. (“SLM”) SLM of Delaware merged into a trading “shell”, BCOI Inc of Colorado, in July, 1999, and thereby became a publicly traded company. It is now a duly formed corporation of the State of Colorado. BCOI adopted the name SLM through the merger. SLM was formed under Colorado law on April 22, 1996. SLM was accepted on NASDQ in May, 2000 and was forced to close its doors when its stock ceased trading on December 19, 2000, during the dot com crisis. In February, 2001, SLM filed for Chapter 11 protection as Debtor in Possession. G. Stan Lee Media, Inc. (“SLM”), a Delaware Corporation Stan Lee Entertainment, Inc. incorporated Stan Lee Media, Inc. on or about April, 1999 in anticipation of identifying a trading public company with which to merge. H. Stan Lee Entertainment, Inc. (“SLE”) In 1998, Stan Lee formed SLE, an internet based production and marketing company. SLE is a corporation duly formed under the laws of the state of Delaware on or about October 7, 1998. In order to capitalize SLE, Stan Lee's complete equity contribution consisted of his assignment of all intellectual property rights in the creative universe that he owned or controlled as of October 15, 1998 to SLE. SLE executed the original Assignment with Stan Lee. SLM is SLE’s successor in interest. I. SLC, L.L.C. After SLM filed for Chapter 11 protection in February 2001, it attempted to sell all identifiable intellectual property assets to a holding company ostensibly created by Stan Lee and a bankruptcy remote principal-(never named)-under terms and conditions first presented to the bankruptcy court for approval in November, 2001. The holding company that Stan Lee warranted would be the Purchaser, which was to be incorporated in California and be competent to enter into and perform all terms provided in the Sale of Assets Agreement as of the date of closing on April 22, 2002, was SLC, for which Lee signed the Sale of Assets as President.