Lee's Rejected Arguments For Msj 2008-1216- J Wilson Rejects All Of Them As Deceptive

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MCGUIRE WOODS LLP DAVID B. VAN ETTEN #119049 LESLIE M. WERLIN #67994 1800 Century Park East, 8th Floor Los Angeles, California 90067 Telephone: (310) 315-8200 Facsimile: (310) 315-8210 [email protected] [email protected] SHERMAN & HOWARD, L.L.C. Mark W. Williams (appearing Pro Hac Vice) Marcy M. Heronimus (appearing Pro Hac Vice) 633 Seventeenth Street, Suite 3000 Denver, CO 80202 [email protected] [email protected] Attorneys for Plaintiffs

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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QED Productions, LLC, et al.,

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Plaintiffs, vs. James Nesfield, et al., Defendants.

CASE NO. 07-CV-00225-SVW (SSx) The Hon. Stephen V. Wilson Dept. 6 REPLY MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT Date: January 5, 2009 Time: 1:30 p.m. Ctroom: 6

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REPLY MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT CASE NO. 07-CV-00225-SVW (SSX)

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TABLE OF CONTENTS

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I. SYNOPSIS OF ARGUMENT................................................................................1

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II. THE MATERIAL FACTS SUPPORTING PLAINTIFFS’ CLAIMS ARE NOT

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CONTROVERTED ...................................................................................................3

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III. LEGAL STANDARDS .......................................................................................4

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IV. ARGUMENT.......................................................................................................6

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A. Plaintiffs have standing to assert each of the claims set forth in the SAC

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because they are the exclusive owners of the trademarks, copyrights, and name,

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likeness and persona at issue. .................................................................................6

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1. QED has standing.........................................................................................7

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a.

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b. Trademark Infringement........................................................................ 11

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2. POW! has standing.................................................................................... 13

Copyright Infringement. ...........................................................................7

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a.

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b. Cybersquatting ....................................................................................... 15

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3. Stan Lee has standing................................................................................ 16

Trademark Infringement........................................................................ 13

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a.

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b. Opp. Defendants are using Stan Lee’s name, likeness, signature and

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persona without his consent and for their advantage, and Stan Lee is

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suffering injury-in-fact from their use of his rights...................................... 18

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4. Plaintiffs have standing on all additional claims. ..................................... 19

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B. Stan Lee and QED Complied with the Essential and Material Bases of the

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APA and the Bankruptcy Court’s Order. ............................................................ 19

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C. Opp. Defendants’ “Void” Argument Itself is Void of Substance. ............... 24

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V. CONCLUSION .................................................................................................. 25

Stan Lee owns his own name, likeness, signature and persona. .......... 17

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TABLE OF AUTHORITIES Cases A&A Plush Inc. v. SKM (USA) Enterprises Inc., 47 U.S.P.Q.2d 1438 (C.D. Cal 1998) .................................................................................................................... 11 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251, 106 S.Ct. 2505 (1986)............5 Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036 (9th Cir. 1999) ............................................................................................ 12 Cleanmaster Industries, Inc. v. Sandra Showry, 491 F. Supp. 2d 937, 941 n.1 (C.D. Cal. 2007). ..............................................................................................................4 D’lil v. Best Western Encina Lodge & Suites, 538 F.3d 1031, 1036 (9th Cir. 2008) ........................................................................................................................... 5, 6 Eden Toys Inc. v. Florelee Undergarment Co., 697 F.2d 27, 36 (2nd Cir. 1982).. 10 Garnder v. Nike, Inc., 279 F.3d 774, 778-79 (9th Cir. 2002)....................................8 Halicki Films, LLC v. Sanderson Sales and Mktg., 547 F.3d. 1213 (9th Cir. 2008) ................................................................................................................. 11, 13, 15 Henderson v. City of Simi Valley, 305 F.3d 1052, 1055 (9th Cir. 2002)...................5 Iconix, Inc. v. Tokuda, 457 F. Supp. 2d 969, 993-94 (N.D. Cal. 2006).....................8 Imperial Residential Design, Inc. v. Palms Dev. Group, Inc., 70 F.3d 96, 99 (11th Cir. 1995)............................................................................................................. 10 In re Napster, Inc., 191 F. Supp. 2d 1087, 1097 (N.D. Cal. 2002) ........................ 10 Krohn v. San Bernardino County Sheriff’s Dept., 2008 WL 4390162, *5 (C.D. Cal. 2008) .......................................................................................................................5 Lanard Toys Ltd. v. Novelty, Inc., 511 F. Supp. 2d 1020, 1033 (C.D. Cal. 2007) ....8 Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992).......................................................................................................... 4, 5

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Magnuson v. Video Yesteryear, Inc., 85 F.3d 1424, 1426, 1428-29 (9th Cir. 1996)

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............................................................................................................................. 10

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Mattel, Inc. v. Walking Mountain Productions, 353 F.3d 792, 799 (9th Cir. 2003) .7

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Miller v. Glenn Miller Productions, Inc., 454 F.3d 975 (9th Cir. 2006)................ 17

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Milton H. Greene Archives, Inc. v. BPI Communications, Inc., 378 F. Supp. 2d

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1189, 1194 (C.D. Cal. 2005) ..................................................................................8

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Parks v. LaFace Records, 329 F.3d 437 (6th Cir. 2003)........................................ 16

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Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989)................................................... 17

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Saelee v. Chater, 94 F.3d 520, 521 (9th Cir. 1996)...................................................5

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Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992).................................. 16

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Ultrapure Systems, Inc. v. Ham-Let Group, 921 F. Supp. 659 (N.D. Cal.1996) ... 12

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Wendt v. Host Intern., Inc., 117 F.3d 1427*3 (9th Cir. 1997)................................ 16

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White v. Samsung Electronics America, Inc., 971 F.2d 1395 (9th Cir. 1992)........ 17

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Statutes

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15 U.S.C. § 1114..................................................................................................... 13 15 U.S.C. § 1114(1) ................................................................................................ 12 15 U.S.C. § 1117..................................................................................................... 15 15 U.S.C. § 1127..................................................................................................... 12 15 U.S.C. §§ 1114, 1125(a) .............................................................................. 11, 15 17 U.S.C. § 204(a) .................................................................................................. 10 17 U.S.C. § 501(b) ................................................................................................ 7, 8 Rules Fed. R. Civ. P. 56 .......................................................................................................5

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CASE NO. 07-CV-00225-SVW (SSx)

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MEMORANDUM OF POINTS AND AUTHORITIES

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I. SYNOPSIS OF ARGUMENT

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Plaintiffs have absolute standing to pursue all claims pled in the Second

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Amended Complaint (“SAC”). When the smoke and fire of the Opposition to

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Plaintiffs’ Motion for [Partial] Summary Judgment (the “Opposition”) are cleared

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away, the positions advanced therein cannot be factually or legally supported, and

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should be rejected. Plaintiffs’ Motion for Partial Summary Judgment (“Motion,

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11/25/08”)1 should be granted, and Plaintiffs should be permitted to proceed with

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all claims in the SAC: Plaintiffs are the owners of the rights upon which they sue;

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and this Court can and should provide Plaintiffs redress for Defendants’ actions.

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Stan Lee, through a company he controlled, QED, obtained the subject rights

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and assets from the bankruptcy estate of Stan Lee Media, Inc. (“SLMI”). The

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essential and material element of the transaction was that Stan Lee be involved in

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the company that would exploit the assets. This fact is established in Plaintiffs’

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Statement of Undisputed Facts (“Plaintiffs’ SUF”),2 ¶¶ 14 to 20 (and see

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Declaration of David B. Golubchik, 12/12/08, Ex. 2 hereto, ¶¶ 5 – 7), and is

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uncontroverted. The name of the entity did not matter.3 It was formed solely to

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exploit SLMI’s assets pursuant to the Asset Purchase Agreement.4 Stan Lee and

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QED in fact exploited the assets for the benefit of the estate.5 Plaintiffs reported on

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their efforts.6 No one connected with the Bankruptcy has ever complained or

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See Case No. 07-CV-00225-SVW (SSx), Document No. 108, Notice of Motion and Motion for Partial Summary Judgment 2 See Case No. 07-CV-00225-SVW (SSx), Document No. 109, Statement of Uncontroverted Facts 3 See, Ex. 2, 12/12/08 Golubchik Dec., ¶¶ 7 – 8. 4 See, Motion, 11/25/08, Ex. 19, ¶¶ 6 – 7; Motion, 11/25/08, Ex. 20, ¶ 8. 5 See, Motion, 11/25/08, Ex. 19, ¶ 7; Motion, 11/25/08, Ex. 20, ¶¶ 5 – 9; Ex. 3, Declaration of Gill Champion, ¶¶ 6 – 10, 11 – 12, 15. 6 See, Motion, 11/25/08, Ex. 20, ¶ 9. 1

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objected to Plaintiffs’ actions or rights upon which they sue. These fact are

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uncontroverted. Plaintiffs have standing on all claims pled in the SAC.

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The Opposition brief was filed by Individual Defendants Nesfield,

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Galloway, Cogan, Belland, and Petrovitz (herein referred to as the “Opp.

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Defendants”). A critical fact here is that none of these persons have any rights in

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the intellectual property described in the SAC. Indeed, until they began their

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machinations described in the SAC (e.g. ¶¶ 54-69), they were complete strangers to

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SLMI. This Court has already determined that they have “no right to use any of

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SLMI’s assets,”7 and their actions heretofore have been illegal. They argue (with

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no adduced evidence) with decidedly unclean hands. And, under the law they have

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no right or standing to object to Plaintiffs’ ownership of the copyrights,

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trademarks, names, likeness, signature, and other intellectual property rights

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described in the SAC. See, infra, pp. 10 – 11.

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Plaintiffs have standing under Federal law to prosecute their claims and, this

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Court should provide redress to Plaintiffs to fully and finally resolve the dispute

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between the parties.

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operations were in this District, its bankruptcy occurred here, Plaintiffs’ claims

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arise out of conduct of the Defendants in this District, many of the claims involve

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intellectual property rights protected by Federal law, and other substantive issues

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(e.g. rights under the SLE Agreement) controlled in part by Federal law. Thus,

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Plaintiffs should be permitted to proceed with all of their claims.

Indeed, this Court is “the” Court to do so, as SLMI’s

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Opp. Defendants attempt to create much smoke and fire by alleging a

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violation of the Court’s Bankruptcy Order and an alleged “fraudulent scheme” in

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connection with the Asset Purchase Agreement (“APA”). No violation or scheme

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p. 12.

See Case No. 07-Cv-00225-SVW (SSx), Document No. 63, Order, 2/19/08 2

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occurred. All actions of Plaintiffs were open and notorious to the public and to

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those involved in the SLMI bankruptcy.

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uncontroverted by Opp. Defendants – shows that the material element of the APA

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transaction was Stan Lee; without him, the intellectual property was useless. Not

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only was Stan Lee involved, he controls QED (as required by the transaction), and

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in fact worked hard to exploit the properties as required. These facts are known to

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all except, apparently, Opp. Defendants. Thus, the basis of Opp. Defendants’

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arguments in their Opposition are themselves false and should be rejected.

Evidence adduced by Plaintiffs –

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Plaintiffs have standing to pursue all of their claims. This includes Federal

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Jurisdiction to redress rights protected under federal law (Claims One to Six), as

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well as the Unauthorized Use and Misappropriation Claims (Six & Seven),

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Interference claims (Eight and Nine), Unfair Business Practices (Ten), Fraud

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(Eleven), Aider and Abettor (Twelve), and Declaratory Judgment claims (Thirteen

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and Fourteen), because they concern, in relevant part, the SLE Agreement, its

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termination, and the rights Opp. Defendants wrongly claim from it.

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II. THE MATERIAL FACTS SUPPORTING PLAINTIFFS’

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CLAIMS ARE NOT CONTROVERTED

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Pursuant to Local Rule 56-3, in determining a motion for summary

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judgment, the Court is to assume that the material facts as claimed are adequately

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supported by the moving party are admitted to exist without controversy except to

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the extent that such material facts are (a) included in the “Statement of Genuine

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Issues” and (b) controverted by declaration or other written evidence filed in

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opposition to the motion. “To raise a genuine issue of material fact, the defendant

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must do more than make a bald, unsupported assertion. To the extent that a

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defendant fails to indicate why a dispute exists or point to counterrailing evidence

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in the record, the court accepts the plaintiff’s allegations as true.” Cleanmaster

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Industries, Inc. v. Sandra Showry, 491 F. Supp. 2d 937, 941 n.1 (C.D. Cal. 2007).

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Here, Opp. Defendants have failed in the Opposition to provide any

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evidence whatsoever, either in the form of a declaration or other written evidence,

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to controvert any of Plaintiffs’ material facts. Indeed, Opp. Defendants have failed

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to controvert even one of the facts listed in Plaintiffs’ SUF. (See Ex. 1, Chart of

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Material Facts). Thus, all of the material facts set forth by Plaintiffs must be taken

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as true for purposes of this Court deciding the Motion for Summary Judgment, and

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in so doing, it is clear that Plaintiffs have standing for each and every claim

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asserted.

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III. LEGAL STANDARDS

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The facts set forth in the SAC, as supported by the evidence adduced in

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Plaintiffs’ Motion, 11/25/08 and herein, demonstrate that, as a matter of fact and

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law, Plaintiffs have standing. Plaintiffs meet the requirements to assert the claims

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in the SAC, and this Court has jurisdiction to—and should—redress Defendants’

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wrongs.

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Opp. Defendants misstate Plaintiffs’ legal standard set forth in Plaintiffs’

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Motion, 11/25/08. Plaintiffs stated that the Court must treat the factual allegations,

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as supported by the evidence, in support of standing as true for purposes of this

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Motion for Summary Judgment. See Motion, 11/25/08, p. 6:19-7:1 (emphasis

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added). Further, Plaintiff cited to Lujan v. Defenders of Wildlife, the case that

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Defendants also cite to in their Response, in its Motion as the proper legal standard

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for determining standing on summary judgment. Id., p. 7:4 – 10. Contrary to

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Defendants’ assertions, Plaintiffs meet the correct legal standard.

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Summary judgment is proper when the pleadings, discovery and disclosures

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on file, and any affidavits show that there is no issue as to any material fact, and

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the movant is therefore entitled to judgment as a matter of law. Fed. R. Civ. P. 56;

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see Saelee v. Chater, 94 F.3d 520, 521 (9th Cir. 1996). Plaintiffs have previously,

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and do here again, establish their absolute standing to pursue the claims in the

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SAC. As such, the Court may properly rule, and allow this action to proceed. The

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burden was on Opp. Defendants in their Opposition to set forth specific facts

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showing there is a genuine issue of material fact for trial. Henderson v. City of

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Simi Valley, 305 F.3d 1052, 1055 (9th Cir. 2002). The non-moving party must

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come forward with more than “[T]he mere existence of a scintilla of evidence[.]”

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Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251, 106 S.Ct. 2505 (1986). When

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a non-moving party presents no evidence, a court has no duty “to search for

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evidence that would create a factual dispute.” Krohn v. San Bernardino County

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Sheriff’s Dept., 2008 WL 4390162, *5 (C.D. Cal. 2008). In their Opposition, Opp.

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Defendants failed to produce any evidence to demonstrate that a dispute actually

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exists, and they failed to controvert any of Plaintiffs’ facts. Id.; Ex. 1. Thus, Opp.

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Defendants have failed to meet their burden, and Plaintiffs’ motion should be

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granted.

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Standing requires that a party allege an injury-in-fact to its rights, which is

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traceable to the defendants, and can be redressed by a favorable decision. D’lil v.

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Best Western Encina Lodge & Suites, 538 F.3d 1031, 1036 (9th Cir. 2008) (citing

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Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d

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351 (1992) (internal citations and quotations omitted)). Opp. Defendants only

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assert that Plaintiffs fail to meet the standing prong of ownership of the rights upon

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which they sue. They are wrong.

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In Lujan, the Supreme Court discussed standing at various stages of a case as follows: Since [the standing elements] are not mere pleading requirements but rather an indispensable part of the plaintiff's case, each element must 5

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CASE NO. 07-CV-00225-SVW (SSx)

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be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation… In response to a summary judgment motion, however, the plaintiff can no longer rest on such “mere allegations,” but must “set forth” by affidavit or other evidence “specific facts,” Fed. Rule Civ. Proc. 56(e), which for purposes of the summary judgment motion will be taken to be true. Id. at 561; see also D’lil, 538 F.3d at 1036.

elements of standing for their claims against Opp. Defendants.

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In the SAC,

Motion, 11/25/08, and in this Reply, Plaintiffs set forth specific, undisputed, material facts in declarations and other written evidence that support each of the elements of standing for each of its claims. There is no dispute that Plaintiffs meet their burden required at this stage of the litigation.

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Plaintiffs have established the

IV. ARGUMENT A.

Plaintiffs have standing to assert each of the claims set forth in the

SAC because they are the exclusive owners of the trademarks, copyrights, and name, likeness and persona at issue. Plaintiffs’ Statement of Uncontroverted Facts set forth in detail that Plaintiffs are the exclusive and legal owners of copyrights, trademarks and name, likeness, signature and persona at issue. Opp. Defendants’ express copying and use of the works, which are legally protected and owned by Plaintiffs, directly proves injury-in-fact to Plaintiffs. Indeed, Opp. Defendants do not deny injury. Therefore, it is without dispute that Plaintiffs have standing to assert the claims in their SAC. Most notably, as discussed above in Section II, Opp. Defendants failed to provide any declaration or other written evidence in their Opposition to dispute Plaintiffs’ SUF and, therefore, the Court should assume Plaintiffs’ material facts as claimed are admitted to exist without controversy. In determining a motion for 6

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summary judgment, the Court should assume that the material facts as claimed and

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adequately supported by the moving party are admitted to exist without

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controversy except to the extent that such material facts are (a) included in the

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“Statement of Genuine Issues” and (b) controverted by declaration or other

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evidence filed in opposition to the motion.

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Plaintiffs’ Exhibit 1, a chart of their SUF, lists Opp. Defendants’ failures to address

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them with declarations and actual facts. As such, the Court should assume as true

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Plaintiffs’ facts that they legally own the copyrights, trademarks and name,

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likeness and persona at issue, and are admitted to exist without controversy when it

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L.R. 56-3 (emphasis added).

rules on Plaintiffs’ Motion, 11/25/08. 1.

QED has standing.

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QED has standing to assert its claims for copyright infringement and

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trademark infringement against Opp. Defendants because it meets all of the

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standing requirements.

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registrations of the following works:

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STAN’S EVIL CLONE. QED also owns the trademarks for these three properties.

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QED has been injured in fact by Opp. Defendants in this matter because it is

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uncontroverted that Opp. Defendants copied and used the registered works that

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QED legally owns.

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a.

QED is the legal owner of the Federal copyright THE ACCUSER, THE DRIFTER, and

Copyright Infringement.

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The legal or beneficial owner of an exclusive right under a copyright is

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entitled to institute an action for any infringement of that particular right

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committed while he or she is the owner of it. 17 U.S.C. § 501(b). “A prima facie

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case of copyright infringement by reproduction is established by showing

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ownership by the plaintiff and copying by the defendant.” Mattel, Inc. v. Walking

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Mountain Productions, 353 F.3d 792, 799 (9th Cir. 2003).

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i.

QED is the legal owner of the copyrights.

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QED has standing to bring suit regarding the works at issue because it is the

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legal owner of the copyrights assigned to it by SLMI. 17 U.S.C. § 501(b); Motion,

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11/25/08, Exs. 11 – 14. The legal owner of exclusive rights under a copyright, at

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the time the act of infringement occurs, has standing to institute an action for any

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infringement of such rights. 17 U.S.C. § 501(b); Lanard Toys Ltd. v. Novelty, Inc.,

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511 F. Supp. 2d 1020, 1033 (C.D. Cal. 2007). Under § 501(b), original owners,

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assignees, and licensors have standing to sue. Id. (emphasis added); see also

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Garnder v. Nike, Inc., 279 F.3d 774, 778-79 (9th Cir. 2002).

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A copyright registration, which QED has and presented to this Court, is

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prima facie evidence of ownership of the copyright in favor of the plaintiff. Milton

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H. Greene Archives, Inc. v. BPI Communications, Inc., 378 F. Supp. 2d 1189, 1194

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(C.D. Cal. 2005) (“A certificate of registration is prima facie evidence of

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ownership of a copyright.”). Courts will also look to proprietary agreements and

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assignments for proof of ownership.

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registration constituted prima facie evidence of copyright ownership by the

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plaintiff, even though the plaintiff was not named on the certificate, because there

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was evidence that the plaintiff was assigned the seven copyrights at issue); Iconix,

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Inc. v. Tokuda, 457 F. Supp. 2d 969, 993-94 (N.D. Cal. 2006) (holding plaintiff

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established prima facie case of copyright ownership both through its copyright

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registration and its Proprietary Agreements). Since there is an absence of any

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controverting evidence, Plaintiffs’ Motion, 11/25/08 should be granted for this

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reason alone.

Id. (holding certification of copyright

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The following table of the U.S. Copyright Office’s records is prima facie

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evidence of QED’s legal ownership of the Federal copyrights for The Accuser, The

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Drifter, and Stan’s Evil Clone:

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Facts

Evidentiary Support

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QED is the registered owner of an item

• Motion, 11/25/08, Exs. 11 & 13,

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of original artwork related to The

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Accuser

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QED is the registered owner of all right, • Motion, 11/25/08, Exs. 12 & 13,

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title, interest and copyright in certain

U.S. Copyright Records;

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animated webisodes of The Accuser

• Copyright Registrations:

U.S. Copyright Records

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VA1045261,VA1045262,

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VA1068231, PA0001341307,

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VA0001387661

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QED is the registered owner of all right, • Motion, 11/25/08, Exs. 11 & 14,

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title, interest and copyright in certain

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animated webisodes of The Drifter

U.S. Copyright Records; • Copyright Registrations:

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VA1045264, VA1045263,

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VA0001387662

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QED is the registered owner of an item

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of original artwork related to The Drifter

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QED is the registered owner of all right, • Motion, 11/25/08, Ex. 15, U.S.

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title, interest and copyright in certain

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animated webisodes of Stan’s Evil

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Clone

• Motion, 11/25/08, Exs. 11 and 14, U.S. Copyright Records Copyright Record; • Copyright Registrations: PA00013413068

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Where, as here, an assignment has occurred (Plaintiffs’ SUF 24; Motion,

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11/25/08, Ex. 7, Assignment of Copyright), a transfer of copyright ownership is

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valid upon showing of an instrument of conveyance, or a note or memorandum

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The Court can take judicial notice of the online records of the United States Copyright Office. 9

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documenting the transfer.

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memorandum must be in writing and signed by either the owner of the rights

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conveyed or the owner’s authorized agent. Not only can QED prove its ownership

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of the copyrights with the copyright registrations, but it also has a valid

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Assignment of Copyright showing the transfer from SLMI to QED. Id. There is

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no dispute between SLMI and QED about the status of the copyrights under the

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Assignment Agreement.

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copyrights establish a prima facie case that QED is the legal owner of the

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copyrights, and as such, has standing to assert its copyright infringement claim

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See 17 U.S.C. § 204(a).

The instrument, note or

The copyright registrations and assignment of the

against Opp. Defendants.

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Opp. Defendants cannot, as a matter of law, object in any way to QED’s

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ownership because they are strangers to the properties. They have no standing to

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challenge the presumption of ownership of the copyrights to QED because QED

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claims ownership by assignment and there is no dispute between SLMI and QED

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regarding the assignment of the copyrights. Imperial Residential Design, Inc. v.

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Palms Dev. Group, Inc., 70 F.3d 96, 99 (11th Cir. 1995); In re Napster, Inc., 191

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F. Supp. 2d 1087, 1097 (N.D. Cal. 2002) (stating “a third party does not have

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standing to challenge the presumption of ownership when plaintiffs claim

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ownership by assignment.”). “[W]here there is no dispute between the copyright

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owner and the transferee about the status of the copyright, it would be unusual and

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unwarranted to permit a third-party infringer to invoke § 204(a) to avoid suit for

22

copyright infringement.” Imperial Residential Design, Inc., 70 F.3d at 99 (citing

23

Eden Toys Inc. v. Florelee Undergarment Co., 697 F.2d 27, 36 (2nd Cir. 1982));

24

Magnuson v. Video Yesteryear, Inc., 85 F.3d 1424, 1426, 1428-29 (9th Cir. 1996)

25

(Where the conveyance is between the transferor and the plaintiff, the alleged third

26

party infringer should not be able to defeat an otherwise valid infringement action

27 28

10

REPLY MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT

CASE NO. 07-CV-00225-SVW (SSx)

1

by relying on excessive formalism to contest plaintiff’s standing.). In A&A Plush

2

Inc. v. SKM (USA) Enterprises Inc., the court denied defendants’ motion to dismiss

3

the plaintiffs’ copyright infringement claim for lack of standing because the

4

plaintiffs showed ownership through a valid copyright assignment. 47 U.S.P.Q.2d

5

1438, 1441-42 (C.D. Cal. 1998). The court found that there was no dispute

6

between the transferor and the plaintiff concerning the terms and rights of the

7

assignment to the plaintiff and, therefore, the defendant, a third party to the

8

assignment, could not invoke the contemporaneous requirement of § 204(a) of

9

Copyright Act. Id. Here, SLMI does not dispute the assignment to QED/Stan Lee,

10

and Opp. Defendants, as strangers to that relationship, cannot create one. Id.

11

ii.

Opp. Defendants have copied the works QED

12

legally owns, and thus, QED has been injured-

13

in-fact by Opp. Defendants.

14

Opp. Defendants have copied, without any discretion, the protected works

15

that QED legally owns, as asserted in the SAC. See SAC, ¶¶ 62, 71 – 72. The

16

SAC is supported by documentary evidence which shows Opp. Defendants copied

17

the protected works. Opp. Defendants have failed to provide any declaration or

18

evidence to the contrary. As such, Opp. Defendants have directly caused injury-in-

19

fact to QED who are the rightful owners of the copyrights. By showing copyright

20

ownership and injury-in-fact, QED is automatically entitled to damages under 17

21

U.S.C. § 504 and, thus, has established its standing for its infringement claim.

22

b.

Trademark Infringement.

23

A plaintiff need only demonstrate that he is the registered owner of a mark

24

for any class of products to establish standing to sue under the Lanham Act. 15

25

U.S.C. §§ 1114, 1125(a); Halicki Films, LLC v. Sanderson Sales and Mktg., 547

26

F.3d. 1213, 1226 (9th Cir. 2008). A plaintiff may establish a prima facie case of

27 28

11

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CASE NO. 07-CV-00225-SVW (SSx)

1

trademark infringement by showing the following: (1) the plaintiff is the owner of

2

a valid protectable mark; and (2) the alleged infringer is using a confusing, similar

3

mark.

4

Entertainment Corp., 174 F.3d 1036, 1046 (9th Cir. 1999).

5

15 U.S.C. § 1114(1); Brookfield Communications, Inc. v. West Coast i.

QED is the legal owner of the trademarks.

6

Section 32 of the Lanham Act grants standing to assert a claim for trademark

7

infringement solely to the “registrant” of the trademark. 15 U.S.C. § 1114. This

8

term includes both the registrant and its “legal representatives, predecessors,

9

successors and assigns.” 15 U.S.C. § 1127 (emphasis added); Ultrapure Systems,

10

Inc. v. Ham-Let Group, 921 F. Supp. 659, 665-66 (N.D. Cal.1996) (trademark

11

licensee had property interest in trademark and qualified as assignee or successor

12

of registrant, and thus had standing to bring trademark infringement action).

13

Pursuant to the APA, Stan Lee, through the company he controls—QED—

14

acquired the rights and titles to the trademarks for The Accuser, The Drifter and

15

Stan’s Evil Clone. Plaintiffs’ SUF 16; Motion, 11/25/08, Ex. 6, § 1.1.6. Once the

16

sale was approved by the Bankruptcy Court, the ownership of these trademarks

17

was assigned and transferred to QED. QED has standing to assert claims related to

18

the infringement of those marks because it is an assignee, which is a recognized

19

legal owner under the Lanham Act. 15 U.S.C. § 1127; Ultrapure Systems, Inc.,

20

921 F. Supp. at 665-66. The facts are undisputed that QED was assigned the

21

interests in the trademarks, and Opp. Defendants have failed to prove otherwise

22

with controverted evidence or written materials. See Ex. 1. Most notably, none of

23

the parties involved in the bankruptcy proceeding have ever objected to Plaintiffs’

24

ownership or use of the trademarks. Thus, QED legally owns the trademarks and

25

has standing to file a trademark infringement claim against Opp. Defendants.

26 27 28

12

REPLY MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT

CASE NO. 07-CV-00225-SVW (SSx)

1

ii.

Opp. Defendants used the exact marks that

2

QED legally owns, and thus, QED has been

3

injured-in-fact by Opp. Defendants.

4

Opp. Defendants used marks that are similar, if not exact, to those marks,

5

which QED rightfully owns and are legally protected. See SAC, ¶¶ 62, 84, 101.

6

Plaintiffs have asserted that Opp. Defendants are using similar marks that are

7

confusing to the public in the SAC, and the documents attached to the SAC support

8

their claims.

9

evidence that they are not using similar marks or the marks are not confusing to the

10

public. L.R. 56-3. As such, the Court must assume Plaintiffs’ facts to be admitted

11

to exist without controversy. Id. Opp. Defendants’ use of almost identical marks,

12

constitutes injury-in-fact to Plaintiffs. Plaintiffs have and own the rights which

13

have been injured by Opp. Defendants, and as such, Plaintiffs are automatically

14

warranted damages under 15 U.S.C. § 1117. Thus, Plaintiffs have standing to sue.

15

2.

Id.

Again, Opp. Defendants did not provide any controverted

POW! has standing.

16

POW! has standing to assert its claims for trademark infringement and

17

cybersquatting because it is the registered owner of trademarks infringed upon by

18

Opp. Defendants, and POW! has suffered an injury-in-fact because Opp.

19

Defendants are using marks that are almost exactly the same to POW!’s legally

20

protected trademarks.

21

a.

22

Trademark Infringement i.

POW! is the legal registrant of the trademarks.

23

POW! is the registered owner of the following trademarks – STAN LEE

24

PRESENTS, and EXCELSIOR!. As detailed above, to establish standing under

25

the Lanham Act, a plaintiff need only demonstrate he is the registered owner of the

26

mark for any class of products. 15 U.S.C. § 1114; see also Halicki Films, LLC,

27 28

13

REPLY MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT

CASE NO. 07-CV-00225-SVW (SSx)

1

547 F.2d at 1226. A prima facie case of the owner’s exclusive right to use a mark

2

is shown with a certificate of registration.

3

ownership of the marks is demonstrated in the official records from the United

4

States Patent and Trademark Office as outlined in the following table:

5

Undisputed Facts

Evidentiary Support

6

POW! is the registered owner of the

• Motion, 11/25/08, Ex. 16, U.S.

7

trademark STAN LEE PRESENTS

8

POW! is the registered owner of the

9

trademark EXCELSIOR

15 U.S.C. § 1057(b).

POW!’s

Copyright Record, Reg. # 3357243 • Motion, 11/25/08, Ex. 17, U.S. Copyright Record

10

Further, POW! acquired the rights and ownership of these two marks, as

11

well as the rights to use Stan Lee’s name, likeness and persona, pursuant to an

12

agreement between POW! and Stan Lee. Plaintiffs’ SUF 23, Motion, 11/25/08,

13

Ex. 18. Stan Lee is the owner of these two marks, which is further evidenced by

14

the APA. Plaintiffs’ SUF 16; Motion, 11/25/08, Ex. 6. Stan Lee was free to do

15

whatever he chose to with the marks, and POW! is the legal owner of these marks

16

and has, along with Stan Lee, standing to bring the claims asserted.

17

ii.

Opp. Defendants are using marks that are

18

similar to POW!’s trademarks, which is likely

19

to cause confusion amongst the public.

20

Opp. Defendants have utilized marks that are similar, if not exact, to

21

POW!’s registered and legally protected trademarks.

22

Defendants used these marks as set forth in detail in the SAC, and provide

23

evidence to support its claim. See SAC, ¶¶ 62, 71 – 72, 84, 101. In the Response,

24

Opp. Defendants are silent on the issue of whether they used the marks and do not

25

provide any declaration or other evidence contrary to Plaintiffs’.

26

suffered injury-in-fact by Opp. Defendants’ improper use of the marks. Pursuant

27 28

14

POW! shows that Opp.

POW! has

REPLY MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT

CASE NO. 07-CV-00225-SVW (SSx)

1

to L.R. 56-3, this fact is uncontroverted, and Plaintiffs are entitled to an automatic

2

award of damages under 15 U.S.C. § 1117.

3

b.

Cybersquatting

4

As stated above, to establish standing under the Lanham Act, a

5

plaintiff need only demonstrate that he is the owner of a mark. 15 U.S.C. §§ 1114,

6

1125(a); Halicki Films, LLC, 547 F.3d. at 1226. A party may establish a prima

7

facie case of cybersquatting by proving 1) the party owns a distinct mark, 2) the

8

defendant had a bad faith intent to profit from the mark, and 3) the defendant

9

registered, trafficked or used a domain name that is identical to, or confusingly

10

similar to that mark. 15 U.S.C. § 1125(d); Interstellar Starship Services, Ltd., v.

11

Epix, Inc., 304 F.3d 936, 946-47 (9th Cir. 2002).

12

i.

13

POW! owns the rights to Stan Lee’s name, likeness, signature and persona.

14

Stan Lee assigned to POW! the right to use his name, likeness, signature and

15

persona. Plaintiffs’ SUF 23; Motion, 11/25/08, Ex. 18. As detailed below, Stan

16

Lee owned the rights to his name, likeness, signature and persona, and thus, had

17

the right to transfer these marks to POW!. POW!, through Stan Lee, legally owns

18

these rights and, as such, has standing to sue for claims related to these rights.

19

ii.

Opp. Defendants’ use of marks that POW!

20

legally owns in their domain names have caused

21

injury-in-fact to POW!.

22

As detailed in SAC ¶¶ 106 – 110, Defendants registered and used the

23

domain names “www.stanleemedia.net” and “www.stanleestudios.com.” Plaintiffs

24

attached documents to the SAC to support the use of these domain names by

25

Defendants. The very use of the name Stan Lee in these domain names has caused

26

injury-in-fact to POW! and to Stan Lee. As POW!, through Stan Lee, legally owns

27 28

15

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CASE NO. 07-CV-00225-SVW (SSx)

1

the rights to Stan Lee’s name, likeness, signature and persona,9 and it has suffered

2

injury from Defendants’ actions, it is entitled to statutory damages. 15 U.S.C.

3

§ 1117. POW! has met the requirements of standing to sue for cybersquatting

4

against Defendants.

5

3.

Stan Lee has standing.

6

Stan Lee has standing to assert claims for unauthorized use, infringement

7

and cybersquatting of his rights to his own name, likeness, signature and persona

8

because he owns and has always owned these rights. These rights exist both under

9

Federal law and California state law. “Celebrities have standing to sue under

10

Section 43(a) [15 U.S.C. § 1125(a)] of the Lanham Act because they possess an

11

economic interest in their identities akin to that of a traditional trademark holder.”

12

Parks v. LaFace Records, 329 F.3d 437, 445 (6th Cir. 2003). To prevail on such a

13

claim, a person must show that he or she owns valid trademark rights in their own

14

name or likeness. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992).

15

Under California state law, section 3444 of the California Code recognizes that “A

16

common law cause of action for appropriation of name or likeness may be pleaded

17

by alleging 1) the defendant’s use of the plaintiff’s identity; 2) the appropriation of

18

plaintiff’s name or likeness to defendant’s advantage, commercially or otherwise;

19

3) lack of consent; and 4) resulting injury.” Wendt v. Host Intern., Inc., 117 F.3d

20

1427, *3 (9th Cir. 1997).

21 22 23 24 25 26 27 28

9

Plaintiffs’ SUF 23; Motion, 11/25/08, Ex. 8. 16

REPLY MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT

CASE NO. 07-CV-00225-SVW (SSx)

1

a.

2 3 4

Stan Lee owns his own name, likeness, signature and persona.

As Stan Lee owns his own name, likeness, signature and persona, he has the right to file suit for unauthorized use or infringement of his rights.

5

Plaintiffs have provided prima facie evidence that they own the rights to

6

Stan Lee’s own name, likeness, signature and persona,10 and thus have standing to

7

assert claims for unauthorized use or infringement of those rights both under

8

Federal and state law. See White v. Samsung Electronics America, Inc., 971 F.2d

9

1395, 1399 – 1401 (9th Cir. 1992) (celebrity has a claim under section 43(a) of the

10

Lanham Act for infringement of one’s persona); Rogers v. Grimaldi, 875 F.2d

11

994, 1003-04 (2d Cir. 1989) (a person has the exclusive right to control the

12

commercial value and exploitation of his/her own name and to prevent others from

13

exploiting that value without permission); Miller v. Glenn Miller Productions,

14

Inc., 454 F.3d 975, 989-90 (9th Cir. 2006) (holding there is an inherent right of

15

every human being to control commercial use of his or her identity).

16

In support of their ownership, Plaintiffs have provided documentary

17

evidence to establish that they, and only they, have the right to use Stan Lee’s

18

name, likeness, signature and persona,11 and that such elements have been used

19

commercially to identify Plaintiffs’ business activities. As set forth in Plaintiffs’

20

Motion, Stan Lee has been using his professional name to identify himself, his

21

image and his work for over 60 years. See SAC, ¶ 22; Defendants’ Answer,

22

10/03/08, ¶ 12 (“Defendants admit that Plaintiff Stan Lee used his name to identify

23

himself, his image and his work for a number of years.”).

24

demonstrated by both the California state law and Stan’s termination of the

Furthermore, as

25 26 27 28

10 11

Motion, 11/25/08, pp. 8 – 9, Exs. 9 – 10, 19; Plaintiffs’ SUF 9, 11, 13. See, supra, pp. 16 – 17, Motion, 11/25/08, Exs. 9 – 10, 18 – 19. 17

REPLY MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT

CASE NO. 07-CV-00225-SVW (SSx)

1

agreement that allegedly assigned these right to SLMI, Stan alone possessed the

2

rights to his name, likeness, signature and persona as of January 2001.12 These

3

facts are uncontroverted. In fact, Opp. Defendants fail to provide any evidence to

4

support their contentions.

5

statements to attempt to contradict the actual evidence. This attempt is insufficient

6

to overcome a motion for summary judgment.

Rather, they make overreaching and self-serving

7

Stan Lee further has standing to assert claims for cybersquatting under

8

15 U.S.C. § 1125(d), which allows the claim to be asserted by anyone who is “the

9

owner of a mark, including a personal name, which is protected as a mark under

10

this section.” 15 U.S.C. § 1125(d)(1)(A). Stan Lee owns and claims infringement

11

of common-law marks protected under 15 U.S.C. § 1125(a), and such claims

12

further relate to the use of a personal name. Stan Lee therefore satisfies the

13

elements required to bring a cybersquatting claim against Defendants.

14

b.

Opp. Defendants are using Stan Lee’s name, likeness,

15

signature and persona without his consent and for

16

their advantage, and Stan Lee is suffering injury-in-

17

fact from their use of his rights.

18

No where in their Opposition do the Opp. Defendants deny they have used

19

Stan Lee’s name, signature and likeness, along with copyrights and trademarks,

20

without permission and have injured him in doing so. Stan Lee is automatically

21

entitled to damages under 15 U.S.C. § 1117 because he has suffered injury-in-fact.

22

Therefore, Stan Lee has standing to sue for trademark infringement, unauthorized

23

use of his name and cybersquatting.

24

///

25

///

26 27 28

12

See Plaintiffs’ SUF, ¶¶ 11- 12.

18

REPLY MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT

CASE NO. 07-CV-00225-SVW (SSx)

1

4.

2

Given that Plaintiffs have clearly demonstrated their ownership of the

3

copyrights, trademarks and Stan Lee’s persona, name, likeness and signature, and

4

injury-in-fact caused by Opp. Defendants unauthorized use of the protected works,

5

Plaintiffs have standing for their additional claims13 that are based, in part, on

6

Plaintiffs’ ownership of these rights.14 Specifically, Opp. Defendants’ interference

7

with the contract and interference with prospective economic relations supports

8

Plaintiffs’ claim that they have suffered injury-in-fact as a result of the actions

9

taken by Opp. Defendants. See SAC ¶¶ 130 – 133; 137 – 140.

10 11

B.

Plaintiffs have standing on all additional claims.

Stan Lee and QED Complied with the Essential and Material

Bases of the APA and the Bankruptcy Court’s Order.

12

In their principal brief and Plaintiffs’ SUF, Plaintiffs list in detail the

13

numerous statements in the Bankruptcy Court’s record that the principal and

14

material element of the sole transaction from SLMI to Stan Lee, through an entity

15

that would form and control, was: Stan Lee himself.15

16

without Stan Lee, the transaction could not have occurred.

It is uncontroverted that

17

Opp. Defendants assert that Plaintiffs committed some violation of the

18

Bankruptcy Court’s order of April 2002 or engaged in some “fraudulent scheme”

19

by allegedly: (1) not creating a single purpose entity to exploit the properties (2)

20

transferring an interest in the properties without consent of the Debtors and the

21

Creditor’s Committee; and (3) by QED failing to pay SLMI. Opp. Defendants

22 23 24 25 26 27 28

13

The additional claims include, but are not limited to, Eighth Claim for Relief – Intentional Interference with Contractual Relations, and Ninth Claim for Relief – Intentional Interference with Prospective Economic Advantage. 14 Plaintiffs have standing for all other claims for relief in the SAC that Defendants did not address in their Response. 15 See, Plaintiffs’ SUF, ¶¶ 14 – 20; Motion, 11/25/08, Exs. 3, 4 & 20. 19

REPLY MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT

CASE NO. 07-CV-00225-SVW (SSx)

1

have no basis or standing to even raise this specious argument as they are complete

2

strangers to the transaction; and, once again, their allegations are not correct.

3

In fact, Stan Lee formed QED for the sole purpose of exploiting the

4

properties sold. 16 The Court, and the Creditor’s Committee all knew that Stan Lee

5

was the key and that he was involved. While the name “QED” is different from

6

“SLC, LLC,” QED is a single-purpose entity controlled by Stan Lee, and formed

7

solely to exploit the Properties. It is uncontroverted that this fact was hidden from

8

no one. Indeed, as the attached Declaration of David Golubchik17 (counsel for

9

SLMI in the Bankruptcy) states, the name of the entity was not relevant. See

10

Exhibit 2. What was essential and material was the involvement of Stan Lee, and

11

that in fact occurred, as the following illustrates:

12 13

The key to the Asset Purchase

14

Agreement was Stan’s

15

involvement.

16

• Motion, 11/25/08, Ex. 3 – Motion to Approve APA; • Motion, 11/25/08, Ex. 4 – Transcript from Hearing;

17

• Ex. 2, Golubchik Dec. ¶¶ 5 – 7

18

The name of the Transferee Entity

• Ex. 2, Golubchik Dec. ¶ 8;

19

was not important. The other key

• Motion, 11/25/08, Ex. 3 – Motion to

20

to the Asset Purchase Agreement

21

was the exploitation of the

22

properties.

Approve APA; • Motion, 11/25/08, Ex. 4 – Transcript from Hearing;

23

• Ex. 3, Champion Dec. ¶¶ 5 - 11, 13;

24

• Motion, 11/25/08, Ex. 20, ¶¶ 5, 6, 8, 9

25 26 27 28

16 17

See Motion, 11/25/08, Ex. 19, ¶¶ 6 -7; Motion, 11/25/08, Ex. 20, ¶ 8. See, Ex. 2, Golubchik Dec., ¶¶ 7 – 8. 20

REPLY MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT

CASE NO. 07-CV-00225-SVW (SSx)

1

No one objected to the assignment

• Ex. 3, Champion Dec. ¶ 14;

2

or development of the properties

• Motion, 11/25/08, Ex. 20, ¶ 7

3

by QED

4

Importantly, Stan Lee and QED (with the assistance of others) in fact spent

5

considerable time attempting to exploit the properties received from SLMI, and

6

their efforts were open and notorious, so there was no hiding who was exploiting

7

the properties as the following demonstrates:18

8

QED was used solely for the purpose of

• Motion, 11/25/08, Ex. 20, ¶ 8;

9

developing, promoting and exploiting

• Ex. 3, Champion Dec. ¶ 5 and Ex. 3

10

the properties.

– Membership Purchase and

11

Employment Agreement ¶ 4(b)

12

(“MPEA”)

13

QED, through Stan Lee and his

• Motion, 11/25/08, Ex. 19, ¶ 7;

14

associates, has tried to exploit the

• Motion, 11/25/08, Ex. 20, ¶¶ 5 – 9;

15

properties.

• Ex. 3, Champion Dec. ¶¶ 6 – 12, 15

16

QED did NOT transfer or assign the

• Motion, 11/25/08, Exs. 11 – 15,

17

properties to POW!

Official Records of Copyright Office

18

show QED is the registered owner;

19

• Ex. 3, Champion Dec., Ex. 3 –

20

MPEA ¶ 4(a)-(b) – only assigns any

21

rights, title and interest that Stan Lee

22

may have, not that QED has.

23 24 25 26 27 28

18

No evidence exists or has been adduced by Opp. Defendants to even suggest that QED and Stan Lee exploited the assets for themselves. Indeed, the evidence extant in this record is, in fact, that QED and Stan Lee worked hard to exploit the assets for the benefit of the estate, as the Declarations above demonstrate. 21

REPLY MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT

CASE NO. 07-CV-00225-SVW (SSx)

1

Pursuant to its efforts to exploit the

2

properties, QED did receive monies on

3

one of the SLMI projects, and this

4

money was paid to SLMI.

• Motion, 11/25/08, Ex. 20, ¶ 6.

5 6

QED complied with the April 2002

• Motion, 11/25/08, Ex. 20 ¶ 9;

7

Order by sending report to Creditor’s

• Report – Ex. 6 to QED’s Opposition

8

Committee on the attempts to exploit

9

the properties.

to Motion for Summary Judgment.

10

As such, Stan Lee and QED complied with the essential and material portions of

11

the APA and the bases of the Bankruptcy Court’s order approving the same.

12

The only people to even make the baseless claims in the opposition are the

13

Opp. Defendants. No persons, creditors, attorney for the Creditor’s Committee, or

14

anyone else – the very people who have a vested interest in Stan Lee’s success –

15

has ever objected to QED, Stan Lee, or their actions after the sale. If one could be

16

made, such persons logically would have made them, but have not.

17

Defendants are complete strangers to SLMI until they aided and abetted each other

18

in illegally dealing with SLMI’s assets (see Court’s Order, 2/19/08, p. 12) and

19

violating the law (see SAC, ¶¶ 62, et seq.), and they have no basis to complain

20

about how the transaction took place or QED’s and Stan Lee’s conduct after.

Opp.

21

The “MPEA,” as Opp. Defendants call it, is no “smoking gun.” It has

22

previously been disclosed in this case.19 A reading of it leads to none of the

23

positions advanced by Opp. Defendants. Indeed, the only mention of QED is:

24 25 26 27 28

To assign convey and grant to POW! Forever, all right title and interest that Stan Lee may have in any income arising from the 19

See, Ex. 3, Champion Dec., Ex. 3.

22

REPLY MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT

CASE NO. 07-CV-00225-SVW (SSx)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

ownership of a Membership interest in QED Productions LLC (“QED”) or arising from the sale of the ownership of such Membership Interest. QED (or any other company so formed) is formed to receive the intellectual property from Stan Lee Media. Stan Lee represents and warrants that he will not cause or permit any ownership interest to be issued to any other party without the consent of Managers of POW! other than Stan Lee. Motion, 11/25/08, Ex. 18, p. 42 of 44, ¶ 4(b). The only thing Stan Lee assigned by the MPEA was income he would get from QED; nothing from QED went to POW!. Stan Lee affirmatively states that “QED (or any other company so formed) is formed to receive the intellectual property from Stan Lee Media.” Id. As discussed above, if it had said “SLC, LLC …,” it would not matter. The actual circumstances are consistent with the deal: Stan Lee would be involved, the company would be controlled by him, and its sole purpose was to accept the properties of SLMI; and the assets would be exploited. POW!’s affairs are public, as Opp. Defendants note. As such, there was no mystery. Again, Opp. Defendants are the only ones to raise this specious issue; they do so to take the Court’s attention away from the uncontroverted and undeniable truths that they are wrongdoers looking for a trapdoor to escape liability. Opp. Defendants have utterly failed to controvert the facts presented by Plaintiffs either by declaration or other written evidence, as is required by L.R. 56-3. The Court should assume that the facts outlined by Plaintiffs are admitted. Stan Lee, QED and POW! own the rights and claims they sue on; Opp. Defendants undeniably violated the Plaintiffs’ rights, and this Court should hold them accountable.

24 25 26 27 28

23

REPLY MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT

CASE NO. 07-CV-00225-SVW (SSx)

1

C.

2

QED’s and Stan Lee’s ownership of the Intellectual Property rights is

3

established.20 POW! has no properties from QED, despite Opp. Defendants false

4

assertion to the contrary;21 rather, it has its own rights from Stan Lee, which Stan

5

Lee rightfully owns and could legally and validly assign to POW!22

Opp. Defendants’ “Void” Argument Itself is Void of Substance.

6

QED is controlled by Stan Lee, and its sole purpose was and is to exploit the

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properties obtained from SLMI. Stan Lee and QED used their “best efforts” (to

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use Opp. Defendants words Opposition, p. 21) to exploit them, as outlined in the

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Declarations of Stan Lee, Gill Champion, and Junko Kobayashi.23

Opp.

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Defendants do not and cannot controvert these facts. Again, they merely raise a

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false “spectre.” And they, as strangers to the Bankruptcy, are the only ones to ever

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bring up the assertion.

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Bankruptcy – have ever made such a claim. Plaintiffs complied with the APA and

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the Bankruptcy Court’s approval of it. This Court has, under the applicable law

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and facts, the proof to support Plaintiffs’ right to sue.

No creditors – people with the greatest stake in the

16

While Opp. Defendants would have this Court believe that somehow the

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APA would not have been agreed to or granted by the Bankruptcy Court if the

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name of the acquiring entity were something other than “SLC, LLC,” the facts, as

19

supported by documentary evidence, simply do not support this contention.

20

Because Opp. Defendants have utterly failed to controvert the facts presented by

21 22 23 24 25 26 27 28

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See, supra, pp. 8 – 12, 17 – 18; Opp. Defendants’ failure to controvert Plaintiffs’ Statement of Uncontroverted Facts. 21 See, Opposition, p. 20. 22 Compare, Motion, 11/25/08, Ex. 6., p. 41 (APA – listing Properties which went to Stan himself). 23 See Motion, 11/25/08, Ex. 19, ¶ 7; Ex. 3, Champion Dec., ¶¶ 6 – 12, 15; Motion, 11/25/08, Ex. 20, ¶¶ 5 - 9. 24

REPLY MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT

CASE NO. 07-CV-00225-SVW (SSx)

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Plaintiffs either by declaration or other written evidence, as is required by L.R. 56-

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3, this Court must assume that Plaintiffs’ facts are admitted.

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V. CONCLUSION

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Plaintiffs have standing to pursue all of their claims; the Court can and

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should redress Opp. Defendants’ wrongs. For their reasons set forth in Plaintiffs’

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motion papers and in this reply, partial summary judgment should enter for

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Plaintiffs.

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DATED: December 16, 2008.

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Respectfully Submitted, Sherman & Howard L.L.C. McGuireWoods LLP

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By:/s/Mark W. Williams Sherman & Howard L.L.C.

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Counsel for Plaintiffs

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REPLY MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT

CASE NO. 07-CV-00225-SVW (SSx)

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CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of REPLY MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT was electronically filed and served via CM/ECF this 16th day of December, 2008, upon: Jack Cairl (E-mail: [email protected]) Pierce O’Donnell (E-mail: [email protected]) O’Donnell and Associates 550 S. Hope Street, Suite 1000 Los Angeles, CA 90071 David Pash (E-mail: [email protected]) David A Pash Law Offices 1880 Century Park East, Suite 1511 Los Angeles, CA 90013 Judith Sasaki (E-mail: [email protected]) Simke Chodos and Sasaki 1880 Century Park East, Suite 1511 Los Angeles, CA 90013 and via overnight delivery to: Peter F. Paul 1854A Hendersonville Rd #10 Asheville, NC 28803 Sean P. Sheppard Andersen Firm 1200 Plantation Island Drive South Suite 220 St. Augustine, FL 32080

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s/ Deborah J. Meyer

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REPLY MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT

CASE NO. 07-CV-00225-SVW (SSx)