The Cold War of Clancy vs. Clancy

THE BALTIMORE SUN

Wanda Clancy appears resigned to the idea of losing Tom Clancy, the best-selling author and her husband since 1969.

Letting go of the name Tom Clancy is another issue. And who gets custody of his literary alter ego, Jack Ryan?

Like any pair of divorcing multimillionaires, the Clancys have to divide real estate, stocks, savings accounts, investments and consumer goods, including the Sherman tank that Mrs. Clancy famously gave her husband several years ago.

But, if Mrs. Clancy's lawyers prevail, a judge will have to determine if there's a value to Clancy's name, which sells not only the Jack Ryan novels that made him a rich man, but volumes of military nonfiction books, his "Op-Center" series, young adult books and computer games.

These fruits of Tom Clancy's imagination have become the potential spoils in a complicated case in which family law collides with intellectual property law. The outcome is anyone's guess.

Thorny issues such as child custody, support, visitation--even the cost of the children's first weddings--have been agreed upon, with little apparent wrangling. (Mrs. Clancy did complain to People magazine earlier this month that her estranged husband communicates with her only by e-mail.)

It's the custody of Jack Ryan that's particularly tricky.

So tricky that Mrs. Clancy's attorneys have requested two full months for the case on the Calvert County, Md., court docket, pushing it ahead to April 5, 1999. Clancy's attorneys have countered by asking that the economic issues be separated out and the divorce granted immediately. That would free Clancy to marry Alexandra Llewellyn, a 31-year-old woman who is wealthy in her own right. The two met after the Clancys' separation in November 1996.

Clancy's attorney, Lowell R. Bowen, said earlier this month that his client does not want to comment on any aspect of the divorce. Sheila K. Sachs, Mrs. Clancy's attorney, said that intellectual property and the pending economic settlement are not issues her client can discuss at this point.

But the court papers themselves, as well as the numerous articles written about Clancy over the past 14 years, provide some insight into the unusual case. In fact, it's not unlike reading a Clancy novel--a compelling narrative loaded with technical jargon.

The Clancy divorce is not the first dispute over fictional hero Jack Ryan.

The CIA official--who eventually would become president--first appeared in 1984's "The Hunt for Red October." Clancy had begun another Jack Ryan book in the late 1970s but put it aside to develop the story of a Soviet submarine whose commander is determined to defect.

"Red October," purchased for $5,000 by Annapolis' Naval Institute Press, did exceptionally well for a first novel, selling 45,000 copies. Then an endorsement from President Reagan made it a huge national bestseller.

Clancy then moved to G.P. Putnam's Sons, triggering a legal battle with his first publisher, which claimed it owned a piece of Jack Ryan. The two parties reached a settlement through arbitration in 1989, the terms of which were not disclosed.

The Cold War ended, but Clancy--and Ryan--kept going, getting bigger and bigger book contracts. Clancy proved, though, with 1995's "Without Reason," that he could rise to the top of bestseller lists without Jack Ryan.

In July, already separated from his wife, Clancy signed a two-book contract with Putnam's for $19 million--per book. "Rainbow Six," his latest novel, will be published this summer.

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These hardcover "techno-thrillers" are only one piece of the Clancy entertainment empire, which includes the "Op-Center" books (about a crisis management team that takes on global tasks); nonfiction books; computer games; young adult novels; television and film spinoffs of various works; and potential toy and comic book deals. In the divorce papers, Mrs. Clancy has estimated the total value of the contracts for these properties at more than $100 million. (This does not include the couple's limited partnership in the Baltimore Orioles.)

Counter Clancy's lawyers: "He admits that there is substantial marital property [but] denies that Mrs. Clancy contributed to its creation. He admits that the value of existing books and other properties derives from work efforts expended during the marriage, but says that the value of future books and other properties depends on his future efforts and those of others."

Legal experts point out the case's myriad complexities. First, it involves intellectual property law, which turns on copyrights, trademarks and trade secrets. All Clancy's Putnam's novels published to date have been copyrighted to Jack Ryan Limited Partnership or to Jack Ryan Enterprises, in which Mrs. Clancy holds an equal share. His new books, however, are assigned to different corporations in which she has no interest.

Then there is Maryland family law, entitling spouses to "equitable distribution" of assets. But Mrs. Clancy appears to be trying to lay claim to money that will be earned after the divorce, which is highly unusual.

"I'm trying to analogize it," says Jane C. Murphy, associate professor and director of the family law clinic at the University of Baltimore School of Law.

She offers an example: "The husband starts a business that's innovative, not earning much money, not worth much at divorce. It takes off after he gets divorced, and the wife, even if she's worked 20 years to start the business, she's not entitled to whatever happens afterward. What I would advise her is, 'We're not going to be able to reach the assets of this business after divorce; get some award of alimony now and then go in and get future increases in alimony.' "

"It's fascinating," says Max Stul Oppenheimer, an intellectual-property professor at theUniversity of Maryland Law School. "I can't think of a single case where all these issues have been raised like this before. It's hard to say this without sounding different than I want to: It's a little like a zoo. It's not so strange to find one animal, but to find them all in one place!"

How much does one spouse contribute to another's literary creation? Mrs. Clancy has never claimed the role of Clancy's muse. But it is noted in the divorce papers that she supported him by working as a nurse in the early years of the marriage and rearing the couple's four children.

Clancy has counterclaimed that she was never supportive of his writing.

His court papers state that "Mrs. Clancy contributed nothing to the development of his books, that she opposed his literary efforts, and that the value of the marital property is due solely to his efforts unaided and often opposed by Mrs. Clancy."

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In the many profiles of Clancy written over the years, the author often tells the story about how he got started as a writer. He had purchased an insurance agency from Mrs. Clancy's grandmother, but was trying to write novels in his spare time. (In keeping with the Horatio Alger theme, there also is at least one reference to the "mailman's son from Baltimore.")

"I told him he should go back to selling insurance," Mrs. Clancy told the New York Times in 1988. "I've eaten those words a few times. But once I read the book I changed my mind. Tom said he'd be happy if it would sell 5,000 copies, but I told him not to worry, it'd sell a lot more than that."

As a best-selling author earning $19 million per book, Clancy belongs to a very small group of multimillionaire fiction writers. Few novelists could contemplate the purchase of the Minnesota Vikings, as he did recently.

And in that small group, Clancy is in a subset of authors who use a cast of continuing characters for his novels. John Grisham, for example, starts each mega-bestseller with new characters.

If there is a precedent here of valuing an author's name, it can be found not among divorcing authors, but with a dead one.

In 1993, a federal tax court ruled that the trademarked name of author V.C. Andrews had a value of $703,500. The ruling arose from a dispute between the Internal Revenue Service and Andrews' heirs.

It is--fittingly, given Andrews' fiction--an unusual story. A Virginia woman, Andrews had written seven best-selling novels when she died in 1986. Her publisher, Simon & Schuster's Pocket Books, apparently didn't see why death should halt such a successful career.

So a ghostwriter, Andrew Neiderman, was hired to continue producing the modern Gothic tales for which Andrews had become famous. He said he used a computer to analyze her style, but eventually moved beyond using the characters she had created. The IRS decided that if Andrews' name was selling the books, it was one of the estate's taxable assets. It said the name alone was worth $1.2 million and asked for back taxes of almost $650,000; the heirs countered by saying the name had no value at the time of her death. The court's assessment essentially split the difference.

Then there is the decidedly nonliterary case of Lorna Wendt, who became famous worldwide last year for her decision to seek half of the so-called soft assets in her divorce from Gary Wendt, chairman of GE Capital. A traditional split would have given her $20 million, but Mrs. Wendt said her role as corporate wife also entitled her to a share in once-untouchable assets such as stock options. She won, but the case is under appeal.

In the meantime, she has set up a national foundation, the Connecticut-headquartered Institute for Equality in Marriage. Cynthia Williams, the foundation's executive director, says that only very wealthy women can fight these sorts of precedent-setting cases.

"This is an all-American issue of fairness," says Williams.

Mrs. Clancy's lawyers argue in her divorce papers that although she has about $16 million in assets, an "unconscionable disparity" will ensue after the marriage, with Clancy enjoying an ever-increasing income, while the partnerships they formed together provide less and less. An Aug. 31 hearing has been set on Clancy's motion to separate the divorce and the economic settlement. Additional motions are expected.

Meanwhile, Jack Ryan's future hangs in the balance.

Clancy's attempt to buy the Minnesota Vikings fell apart in the spring, possibly because of the contentious issues connected with the divorce. What will happen next?

"It's got the makings of a book," says Oppenheimer.

But perhaps one more suited to John Grisham's oeuvre.

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