Its a Bird! Its a Plane! Its Time Warners 8-K!__»

Time Warner, Inc. (TWX) filed a short 8-K July 7 that had a couple of interesting sections.

First was a disclosure that the company had recast some 2008 and 2009 consolidated financial statements —to reflect the retrospective adoption of amendments to accounting guidance….

The more interesting disclosure involves DC Comics (owned by Time Warner, Inc.), the company that publishes about 90 comic books and 30 graphic novels each month about iconic characters such as Superman, Batman, and Wonder Woman.

Before we look at the new disclosure, though, a short summary of the nearly 6-year-old lawsuit (from the 2010 annual report) might be helpful:

In October, 2004, some heirs of Superman creator Jerome Siegel filed suit in federal court against Time Warner, Inc., DC Comics, and Warner Bros. Entertainment, Inc. They sought an accounting and a judgment for money allegedly owed, and they also asserted —various Lanham Act (trademark) and unfair competition claims. Time Warner filed a counterclaim.

Over the next few years, the court denied some of the plaintiffs— claims and dismissed others with prejudice. In October, 2008, the court ruled that the remaining claims would be tried in —phased non-jury trials.

On July 8, 2009, the court ruled in the defendants— favor, finding that the terms of the license agreements between DC Comics and Warner Bros. Entertainment were made at fair market value (they weren’t a —sweetheart deal). A second trial originally scheduled for December 1, 2009 was postponed. Time Warner plans to defend the lawsuit —vigorously.

The same plaintiffs filed a second lawsuit in 2004 against the same defendants (and two additional Warner companies), arguing that defendants had no right to create new —Superboy works after October 17, 2004, the date when they tried to terminate Siegel’s grant of rights to DC Comics— predecessor-in-interest. They asked the court to declare their termination valid and prevent the defendants from using the Superboy character anymore. After much legal wrangling, the case is still pending. Time Warner plans to defend this case, as well.

In the current 8-K, though, we learned that Time Warner has gone on the attack. On May 14, 2010, DC Comics filed a related lawsuit

——against the heirs of Superman co-creator Joseph Shuster, the Siegel heirs, their attorney Marc Toberoff and certain companies that Mr. Toberoff controls. [It seeks] declaratory relief concerning the validity and scope of the copyright termination notice served by the Shuster heirs, the validity of various agreements between Mr. Toberoff, his companies and the Shuster and Siegel heirs, as well as claims for intentional interference by Mr. Toberoff with DC Comics— contracts and prospective economic advantage with the Shuster and Siegel heirs.

Wouldn—t it be great if someone wise could swoop in and resolve the case swiftly and justly? Where’s that Man of Steel when you need him?

Image source: Thomas Duchnicki via Flickr


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