Great Ormond Street fights US lawyers for rights over Peter Pan

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Even the battles in Neverland between Peter Pan and his arch-rival Captain Hook were never quite this nasty.

In a court in far off San Francisco, Britain's most famous children's hospital is fighting one of the world's leading law schools for control over the Land of Everlasting Youth.

At stake are the lucrative rights owned by Great Ormond Street Hospital in London to royalties from Peter Pan under a secretive bequest to the hospital by his creator, the Scottish author Sir James Barrie.

The hospital's copyright, which came into force on his death in 1937 and still covers Europe and the United States, is being challenged in a Californian court by Emily Somma, a little-known Canadian author from Hamilton, Ontario.

Ms Somma, 54, who lived in Northolt, west London, as a child, has written a revisionist up-dating of the Peter Pan tale through an obscure publisher called Daisy Books. To the hospital's distaste, After the Rain – A New Adventure for Peter Pan portrays Neverland as a trap from which Peter Pan and Tinkerbell are rescued by three new child heroes. In her story, Peter Pan is allowed to grow up into happy adulthood.

Great Ormond Street refused Ms Somma permission to use the Peter Pan character or publish her book in Britain and the US last September. But Ms Somma is to release a sequel this year which charts his life in the world of adults: Peter's First Christmas.

The hospital has previously taken successful legal action to protect its copyright, but this case may be different. It could have very expensive consequences for its £12m-a-year fundraising efforts.

Barrie, who lived near Great Ormond Street, made his bequest in 1927, as a gift to the nation's children. But he barred the hospital from disclosing how much it earns from Peter Pan.

Ms Somma's case has been taken up for free by Professor Elizabeth Rader from Stanford Law School, California, who specialises in battles against corporations such as Disney and Microsoft, claiming that they abuse the copyright system to crush creative and intellectual freedom.

With a small team of lawyers and students based at the law school's Center for Internet and Society, Professor Rader claims that Peter Pan is now public property and that Ms Somma's book is a wholly-new creation. The legal case is further complicated by Disney's ownership of the animation rights to Peter Pan and the copyright of its own cartoon images.

In her writ, obtained by The Independent on Sunday, Professor Rader claims that the hospital only has copyright over Barrie's original 1904 play, not his later, out-of-copyright, Peter Pan books or the individual characters. "These original stories are in the public domain, and free for anyone to build on," her team argues.

Ms Somma says the hospital will regret its decision to reject her offer last year of a share of the royalties from her book. "They face loss of ownership, so it seems to me that it would be to their advantage to rethink their earlier decision," she said.

The hospital is confident about its legal case, and describes her book, which has only sold 1,000 copies, as an "irritant". Yet it admits the stakes are high. If she wins, large corporations could follow her lead and cash in.

"If someone comes along and says 'I'm going to breach your copyright a little bit', what happens if someone enormous with good lawyers comes along – what do we do?" asked a hospital spokesman.

At the time of the bequest in 1927, there was speculation it would reap £2,000 a year. When Steven Spielberg's hospital-sanctioned remake Hook was released in 1992, it reputedly earned £700,000.

Similar sums are expected when the first Peter Pan film with a human cast is released this Christmas. The Columbia Tristar production is being filmed in Australia and includes Richard Briers as Hook's sidekick Smee and Lynn Redgrave as a new character, Wendy's aunt.

The hospital's fears are shared by Barrie's only surviving god-child, Laura Duguid, now in her 70s, and the former England football captain turned television presenter, Gary Lineker.

The daughter of one of the "lost boys" who inspired Peter Pan, Nico Llewellyn Davies, Ms Duguid said: "If it's a legal battle, then I would have to support Great Ormond Street, even if I thought people should have the freedom to publish what they want. It has gone beyond that now."

Mr Lineker, whose son George was saved by the hospital after contracting leukemia 11 years ago, said: "Anything that affects the hospital's funding position would clearly be a national disaster, and I hope this lady thinks very carefully before doing something which could have long-term repercussions."

By James Merino

Winnie the Pooh

A A Milne's bear of little brain is worth over £500m a year. In 2001, Disney paid £240m for the UK and international rights until 2026. US rights were in the hands of an American firm, Slesinger, but reclaimed under copyright laws by the granddaughters of Pooh's creators, who leased them to Disney for an estimated £10m a year. Slesinger is trying to overturn the deal.

Thomas the Tank Engine

In 1982, former BBC producer Britt Allcroft bought the rights from the Reverend W Awdry for £50,000. She transformed the humble steam engine into a global mega-brand present in 121 countries. In 2002, HIT Entertainment paid £139m for Gullane, the firm Ms Allcroft set up to develop the franchise.

Mickey Mouse

Mickey, "born" in 1928, went on to bankroll an empire with a £14bn turnover. Disney's rights over him were due to expire this year, but after the corporation's tough lobbyingnew laws were passed allowing copyright extension for a further 20 years on Mickeyand other characters, including Bambi, Dumbo and Donald Duck.

Noddy

Back in the 1950s Enid Blyton homed in on the magic of merchandising with Noddy torches, slippers and dressing gowns. In 1996 Chorion paid £13m for the characters' copyright and oversaw a revival of the Noddy franchise, with a Channel 5 series. The brand was recently put on the market, expected to sell for about £30m.