Settlement talks canceled in Pooh royalty lawsuit

The two sides in the long-running royalty dispute over the Winnie the Pooh characters have ended settlement talks, ensuring that complicated federal copyright litigation will continue.

Walt Disney Co., which generates about $1 billion in annual revenue from the sale of Pooh products, informed a federal magistrate last month that it would not participate in settlement talks with the family that owns the licensing rights to the characters.

Attorneys representing Stephen Slesinger Inc., the company that owns the rights to Pooh, said they would pursue federal action against Disney, including asking for $2 billion in damages.