Marvel Litigation: Stan Lee v Marvel

An Ongoing Series Looking At Who Claimed What

In 2002 Stan Lee sued Marvel. It wasn’t the lawsuit that Marvel wanted, and it was all about money. Namely film money. And there was a lot of film money to be had.

Also, unlike others who had, and have, filed suit against Marvel (or DC for that matter), Stan’s case was iron clad. Marvel had messed up, and put it in writing. Stan couldn’t lose this one.

The crux of Lee’s case came from the agreement that he signed with Marvel in November 1998. A new contract had to be drafted after Lee’s previous contract was voided during marvel’s bankruptcy. Not wanting to lose Lee as a spokesperson / public face, or risk Lee filing for characters and / or copyright terminations, a new contract was drawn up, negotiated and signed.

Lee had Marvel over a barrel with the 1998 contract and it showed. Lee was guaranteed income for life, with protections for income for his wife, Joan, and daughter, J.C. Lee, should he die before they did. All kinds of perks were inserted into the contract, all of which meant more and more money for Lee and less and less actual work. The upshot was Lee was to be paid $1,000,000 per year, for life, from 2002 just to pop his head up and talk up Marvel.

The perks were great. Lee would receive options to purchase Marvel shares for next to nothing. He was able to undertake outside employment if he wanted. He’d get all kinds of extra cash and offsets. He’d be paid $125,000 just to sign his name to the Spider-Man newspaper strip. Stan had stopped writing the strip a fair time before the 1998 agreement was signed, Roy Thomas was handling the actual writing. Stan was reviewing the strip, would throw the odd idea out and sign his name to it.

Good money if you could get it.

The clause that tripped Marvel up was clause 4(f). That clause reads as such:

In addition, you shall be paid a participation equal to 10% of the profits derived during your life by Marvel (including subsidiaries and affiliates) from the profits of any live action or animation television or movie (including ancillary rights) productions utilizing Marvel characters. This participation is not to be derived from the fee charged by Marvel for the licensing of the product or of the characters for merchandise or otherwise. Marvel will compute, account and pay to you your participation due, if any, on account of said profits, for the annual period ending each March 31 during your life, on an annual basis within a reasonable time after the end of each such period.

Notice that nowhere is it said that the profits would be net or gross. This ambiguity was an oversight that could cost Marvel in the future. If the profits were net, under the standard Hollywood accounting practices, Stan would likely never see a cent. If the profits were gross, Stan could expect to see a bit of cash. This deal was signed when nobody was really lining up to make movies from Marvel properties, mainly because the rights to the big characters and concepts had been sold off to numerous people (usually by Stan) in deals that would take decades to unravel. Profits from Marvel movies, in 1998, were few and far between with the only Marvel movie making any kind of money was the just released Blade.

Clause 5(e) would see Stan agree

…not to contest, either directly or indirectly, the full and complete ownership by marvel, it’s affiliates, designees, or successors in interest, of all right, title and interest in and to the Property and Rights or the validity of the Rights, which may be conferred on Marvel by this Agreement, or assist others in doing so.

This meant Stan could never file for characters, concepts or file a Copyright Termination, nor could he testify or assist anyone from doing the same. If such a case was to be filed, he could only, legally, talk on Marvel’s behalf. Which he did.

(Before anyone says anything, anyone else would have done exactly the same as Stan did when he signed that contract, and they’d have done the same as Stan would do when Marvel reneged on paying him his due. No matter what anyone thinks of Stan, personally, he did what everyone would have done.)

After a lot of back and forth, the contract was finally signed on 28 November 1998. All was well. Then the final numbers for Blade came in. Stan’s 10% came to $8,640,351.

Marvel held it all back and waited.

Next came The X-Men, Blade 2 and Spider-Man. The profits were huge, Spider-Man took $846,253,404 alone. Stan’s 10% of the four movies now added up to a staggering $111,586,788. And he wanted all of it, and he was contractually entitled to it. More movies were planned and the projections for the profits were now going off the scale. When Stan’s contract was drafted, they didn’t expect that this much money would be flowing to Stan, so Marvel did what Marvel often did – they refused to pay.

Stan demanded his cash. When it became obvious that Marvel weren’t going to pay him, and with nearly $80,000,000+ due to him on Spider-Man alone, Stan had the contract checked and was assured, yes, he was a very good chance to win any lawsuit.

Marvel didn’t want the publicity and offered Stan a modest settlement, but Stan wanted it all. In 2002 Stan filed suit in the New York District Court against Marvel Enterprises, Inc and Marvel Characters, Inc.

Marvel argued that the profits defined in the contract were net, not gross. The court not only disagreed with Marvel, but they increased the money due to Stan as it found that the term ancillary rights in the contract included merchandising rights. Stan’s share of the pot increased.

Marvel filed an appeal and lost again.

The money was building up.

Negotiations went back and forth until a deal was reached. On 20 April 2005, Marvel handed Stan a new contract, with clear clarification when it came to profits. They also gave him a one-off payment of $10,000,000 and absorbed Stan’s legal costs. Stan would still make money from the Marvel movies, but nowhere near the 10% gross that he’d argued for and got.

Marvel got off cheaply. If they had been forced to honor the contract and pay Stan 10% of the gross for all the Marvel films alone (not including merchandising or television), Stan would have earned over two billion dollars by the time he passed away in 2018.

As part of the settlement, and because Stan Lee Media were tying the company up in the courts with vexatious cases regarding ownership of characters, Marvel had Stan sign an affidavit designed to put to rest once and for all as to who owned the many characters that it was believed that Stan had either created or co-created. This document was signed on 11 June 2007.

The affidavit went through the usual statements about work for hire, who Stan believed really owned characters and works and Stan’s own history with Marvel. Clause 11 is the part that is of the most interest.

From 1941 through 1978, I (together with numerous artists) created or co-created hundreds of characters and introduced them into the storylines to be published by Timely and/or Cadence/Marvel Comics. A list of some of the characters I either created or co-created for Timely and/or Cadence/Marvel Comics appears of Schedule A.

What then followed was 172 characters that Stan claimed to either have created or co-created. You can see the list below and make your own mind up. Stan said he did, others say he didn’t.

Included on the list were The Silver Surfer. Stan had long admitted that Jack Kirby created that one all on his own, without Stan’s knowledge.

Also on the list was Dr Strange. Stan admitted in a letter to Jerry Bails in 1963 that Steve Ditko had brought that one into Marvel, fully formed, without Stan’s involvement. Dr Strange’s supporting characters, such as Wong, Ancient One, Baron Mordo and Dormammu can be said to have come directly from Ditko with minimal, if any, input from Lee. The same can be said for a lot of the Kirby characters.

Stan claimed Gladiator (created by Chris Claremont and Dave Cockrum), Baron Zemo (created by Roy Thomas, Tony Isabella and Sal Buscema) and Phoenix (Claremont and Cockrum, with a good dose of John Byrne), although he might have argued that Phoenix was just another version of Marvel Girl-Jean Grey, although, as has been established, the Phoenix Force and thus Phoenix is separate from that character.

My thanks go to Christopher Sequeira for pointing out that Man-Wolf was created by Gerry Conway and John Romita. It can be debated that Lee had a hand in the creation of John Jamieson, JJJ’s son, but he had nothing to do with Man-Wolf. (Keep them coming people)

A lot of the characters that Stan claimed were either created by Steve Ditko or Jack Kirby. Stan had minimal input in the creation of most, and zero to others. The list does not include Timely characters such as Captain America or Namor, as Stan knew he had nothing to do with them. Both Lee and Kirby claimed creator status for The Human Torch, or, at least, the Johnny Storm version. History will record that The Human Torch was created by Carl Burgos, so that character should read Burgos-Kirby-Lee at best, or Burgos-Kirby.

Here’s the full list of the 172 characters that Stan claimed to have either created or co-created.

It is entirely possible that this list was presented to Stan, who simply signed it and let it go out into the world. He would have had some input into it, so we can assume that Lee certainly believed that he at least co-created these characters and more.

Now, I am aware that this list will cause a lot of fuss as people argue who created what, along with those who believe Stan Lee didn’t create anything. Those are arguments for another day.

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