Judge throws out claim for a share in Disney's Pooh profits

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The Walt Disney Company claimed victory yesterday in a bruising 13-year court dispute over Winnie the Pooh, the A A Milne creation that Disney has sought to claim as its own.

A California Superior Court judge abruptly threw out the case against Disney brought by Stephen Slesinger Inc, the family firm which bought the merchandising rights to Winnie the Pooh in 1929 and claims to have been cheated out of hundreds of millions of dollars in royalties collected by Disney.

Judge Charles McCoy found that Slesinger had employed private investigators to steal documents from Disney, behaviour he described as "willful, tactical, egregious and inexcusable". He dismissed the case "with prejudice", meaning that his action was intended to be a punishment for unethical behaviour, not a pronouncement on the merits of the case itself.

In a legal battle remarkable for its ferocity, neither side has demonstrated angelic behaviour over the years. In 2001, Disney was fined $90,000 (£49,000) for shredding some 40 boxes of documents related to the Slesinger suit, including one marked "Winnie the Pooh - legal problems".

Slesinger's lawyers said yesterday that they intended to appeal the dismissal of the suit and insisted they still deserved to prevail on the facts of the case. Most of the legal decisions until yesterday had gone in their favour.

Daniel Petrocelli, Disney's lawyer, said this was the end of a long road. "After 13 years the Winnie the Pooh case is finally over," he told Reuters.

This is a battle that Disney, beset by corporate problems, could not afford to lose. Winnie the Pooh is a bigger money-spinner than Mickey Mouse and a major part of America's childhood experience, appearing on backpacks, lunchboxes, games and fast-food meals.

Disney first signed a licensing agreement with Slesinger in 1961 and revised it in 1983. Internal documents unearthed during the dispute showed that Roy Disney, Walt's brother, was afraid as long ago as 1967 that Slesinger could claim the legal right "to either hold us up for an outrageous price or sit back and reap the rewards of our work and investment".

Slesinger argued that it was being shortchanged on profits from video, DVD and computer products - products that did not exist when the licensing agreements were signed and that, according to Disney, did not need to be included in royalty calculations.