The Never-Ending IP Struggle

This article originally appeared in Business Insider

Disney is releasing another Winnie the Pooh movie, and the occasion made me think of the peculiar intellectual property fight that has been raging over Pooh for some time.  The story of control over Winnie the Pooh and the other lovable characters that populate the Hundred Acre Wood is fascinating in its byzantine complexity.  To summarize:

• The characters were created in the 1920’s by A.A. Milne.  Copyright protections at the time lasted for an initial period of 28 years and a renewal period of 28 years.
• In 1930 Milne and Stephen Slesinger entered into a contract granting Slesinger merchandising and other rights in exchange for royalties.  Slesinger created a company, Stephen Slesinger Inc. (“SSI”) and assigned those rights to the new entity.
• SSI was extraordinarily energetic with their IP, creating the first Pooh doll, board game, puzzle, radio broadcast, animation and motion picture.  By November 1931 Winnie the Pooh was a $50 million business, providing an eye popping return on Slesinger’s $1000 upfront payment to Milne (Milne also received 66% of subsequent income).
• Milne died in 1956, with rights to Winnie the Pooh transferred to his wife, Dorothy.  Upon Dorothy’s death rights were transferred to the Pooh Properties Trust.
• Disney acquired the rights to Winnie the Pooh from SSI in 1961.
• An amendment of the 1976 Copyright Act granted an additional 19 years of protection.
• Disney negotiated a revised deal with the Pooh Properties Trust in 1983 in order to prevent a feared contract termination.
• In 1998 the Copyright Act was amended again to provide an additional 20 years of protection.
• In 2002, with Disney embroiled in litigation with SSI over claims that it had systematically underpaid royalties due SSI for years, Clare Milne sought to terminate the 1930 agreement.
• In 2006 the U.S. Supreme Court declined to grant a writ of certiorari, leaving the heir of A.A. Milne with no recourse.

It has been a long and winding road for a bear of very little brain.  Something to think about as the new movie helps create and enhance the enthusiasm of another generation of fans.

About the Author

David Johnson (@TurnaroundDavid) is founder and Managing Partner of Abraxas Group, a boutique advisory firm focused on providing transformational leadership to middle market companies in transition.  Over the course of his career David has served as financial advisor and interim executive to dozens of middle market companies.  David is also a recognized thought leader on the topics of business transformation, change management, interim leadership, restructuring, turnaround, and value creation.  He can be contacted at: david@abraxasgp.com.