Claims on Roger Rabbit Yield Split Court Decision

A California appeals court Tuesday ruled that Walt Disney Co. does not have an obligation to exploit Roger Rabbit to benefit its creator, but the company probably will have to prove that it properly accounted for the revenue generated by the Toontown characters.

Both sides claimed victory in the split decision.

The court ruling stems from a lawsuit filed two years ago by Gary K. Wolf, who created the characters in a 1981 book, “Who Censored Roger Rabbit,” and then sold Disney certain rights to the cartoon gang in exchange for 5% of the gross revenue.

Disney later teamed up with Steven Spielberg’s Amblin Entertainment to produce the 1988 hit movie “Who Framed Roger Rabbit.” It raked in four Academy Awards and at least $250 million worldwide at the box office, and millions more through other commercial tie-ins.

Wolf contends that the Burbank-based company has underreported Roger Rabbit revenue and won’t give him complete access to its financial records. Disney disagrees, saying Wolf’s contract allows him to audit the records. The court ruled that if Disney indeed has the “exclusive control” of the records, it also has the burden of proving that it properly accounted for revenue.

“This opinion is a victory for Mr. Wolf.... Disney has the burden of proving that it fully paid” him, said his attorney, Michael B. Garfinkel.

Disney said its victory came on a different front. The court upheld a lower court ruling that Disney does not have a “fiduciary duty” to benefit Wolf by doing all that it can to make money off the characters.

“This decision is a major victory for Disney and the entire entertainment industry,” said Marty Katz, one of Disney’s lawyers.

Trial in the case is scheduled for Oct. 1.

-- Meg James