Sept. 25 (Bloomberg) -- Walt Disney Co., the second-largest U.S. media company, won an appeals court ruling in its 16-year battle over hundreds of millions of dollars in royalties for Winnie the Pooh merchandise.

A California appeals court in Los Angeles affirmed a 2004 trial judge's decision to throw out a lawsuit by Stephen Slesinger Inc., owner of the merchandising rights to Pooh, featured in a series of popular children's books. The trial judge found that Slesinger had illegally obtained evidence. The appeals court decision was filed today.

In a 1991 lawsuit, closely held Slesinger said Disney hadn't accurately accounted for royalties it owed for sales of Pooh merchandise. Stephen Slesinger acquired U.S. and Canadian rights to the characters in 1930 from author A.A. Milne, including Pooh, named for a toy bear owned by Milne's son. After Slesinger's death, his widow licensed the rights to Disney. Slesinger's company sought $700 million in unpaid royalties.

Disney ``is obviously extremely pleased and gratified that there's now a definite and final decision putting this case to rest once and for all,'' its lawyer, Daniel Petrocelli, said in a phone interview.

Slesinger will appeal the ruling to the California Supreme Court, spokesman Lonnie Soury said. The company will also pursue its counterclaims in a federal court case with Disney in which it seeks $2 billion in damages as well as a ruling terminating Disney's U.S. and Canadian television and merchandising rights to Winnie the Pooh, Soury said.