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Jury Selected in Roger Rabbit Lawsuit

On March 15, 2005, the trial began in the lawsuit between Roger Rabbit creator Gary Wolf and the Walt Disney Co., reports HOLLYWOOD REPORTER. Wolf alleges the 5% royalty he received from revenue for movies, merchandise and other goods should also include the estimated value of promotional tie-ins with McDonalds, Burger King and others -- even though Disney was not paid for those deals. In Wolfs 1983 agreement, he is entitled to a percentage of gross receipt, which he claims should include cash and "all other considerations.

If ruled in favor of Wolf, this will change the Hollywood standard of noncash promotional deals not counting toward gross receipts. In addition, another precedent could also be established if Wolfs claim that Disney owes him a "fiduciary duty" over the reporting and payment of royalties, potentially making Disney liable for punitive damages in addition to the alleged underpayment, is upheld.

California's Second Appellate District rejected the second claim in February 2003 because the "contingent entitlement to future compensation within the exclusive control of one party" was a contractual relationship, not a fiduciary partnership where Disney is obligated to act in the best interest of Wolf.

However, a separate appeals court ruling went in favor of Wolf, allowing him to argue at his version of gross receipts.

Wolf created Roger Rabbit and related characters in a 1981 novel and then licensed the merchandising, motion picture/television and other rights to Disney. The agreement was modified in 1989 after a disagreement arose over auditing rights, the use of the characters at theme parks and other issues, which will also be addressed in this trial as well.

Moreover, Disney claims it found an accounting error in Wolf's favor and seeks the return of $500,000-$1 million to be repaid.

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Rick DeMott
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