Tuesday, June 13, 2017

Batman & Bill

           Recently, I was giving a presentation on intellectual property issues in the comic book industry when I was asked about Bill Finger finally receiving credit as a co-creator of Batman. For the most part, I try to discuss issues litigated in the courts or that have been well-documented in the press. Generally speaking, Bill Finger’s involvement with co-creating Batman, while known among most fans, had stayed out of the courts and mostly out of the press. Without a verified record, I don’t like to speculate. I believe I told the questioner I had noticed the development, but I was unfamiliar with what went into it. I said there has been a greater trend toward recognizing the contributions of early creators, and I hope that was what was happening here. After recently watching the new documentary “Batman & Bill” on Hulu, I realize my answer was inaccurate.
            “Batman & Bill” begins with author Marc Tyler Nobleman’s quest to learn more about Bill Finger and his role in creating Batman. Along the way, he spearheads a campaign to officially recognize Bill Finger as a co-creator of Batman, and his efforts prompt Finger’s granddaughter to seek such recognition. After years of being denied credit, Finger’s name is finally listed alongside Bob Kane’s. However, according to the documentary, it took threats of litigation and the termination of Finger’s copyright interests in Batman to induce DC into doing so. Certainly, the fight with Siegel and Shuster’s heirs prompted them to settle, but it would have been nice to learn DC acted on its own without Finger’s heirs having to threaten litigation. 
            The documentary is fascinating and helps shed light on Finger’s contributions to the Batman legacy. While briefly discussed, it also highlights many of the legal issues I’ve discussed on this site in the past regarding copyright ownership and contractual issues. As a creator, it is important to know your rights and how to enforce them. 
If you are interested in the legacy of one of Batman’s creators, I highly recommend watching this documentary on Hulu. You can also read Marc Nobleman’s book on Bill Finger, Bill the Boy Wonder: The Secret Co-Creator of Batman (note: affiliate link), which was released before Bill Finger finally received the recognition he deserved.    

Sunday, May 28, 2017

Guest on ComixLaunch

I was once again a guest on the ComixLaunch podcast. Tyler James and I discussed many of the nuances of work-made-for-hire agreements, and generally, how best to protect yourself contractually as a creator. Give it a listen. You can find it here: http://www.comixlaunch.com/session096/.

If you want to know more about making comics or running Kickstarter campaigns, you should consider subscribing to the podcast and follow the ComixLaunch page.

Tuesday, May 23, 2017

Licensing Basics

           Licensing Expo kicks off this week in Las Vegas. If you’ve never heard of it, a simplified explanation is it’s a trade convention where brand owners can seek out companies interested in licensing their brands for use on other goods and services and vice versa. Licensing is important to brands for a number of reasons, but two of the biggest are additional revenue and increasing brand awareness.
Licensing Expo is a good excuse to discuss licensing for comic book creators. The first thing to keep in mind is that licensing rights are valuable. A typical licensing deal will involve an advance, a royalty percentage paid on sales, and a minimum guaranteed amount payable to the brand owner. The advance fee is usually deducted from the minimum guaranteed amount, and the licensee usually does not pay a royalty until it has sold enough to recover its advance fee payment.
For example, let’s say you signed a licensing deal with Company Z to make clothes featuring your property. If the deal terms are a $5,000 minimum guarantee with a $1,000 advance, a 10 percent royalty, over 3 years, then it means Company Z will pay you $1,000 when the deal is signed, and Company Z guarantees you will earn another $4,000 in royalty revenue by the end of the deal. They will not pay you until royalty revenue has exceeded $1,000 – the advance – and will pay the 10 percent royalty rate on goods sold thereafter. If at the end of the 3 year deal, they have not paid you $5,000 in royalty, then they have to pay you the difference.  
If you are thinking about licensing your brand, it is important to have a licensing agreement in place. At a minimum, you need to address the length of the deal, the royalty rate, and any other payment terms. It’s also important to address where the items can be sold by identifying both distribution channels (brick & mortar stores, online) and territory (U.S., Europe, Canada, etc.), implement an approval process to make sure the use of your brand meets your expectations and requirements, make sure the company licensing your brand agrees to abide by all relevant laws, require the company to indemnify you if an action they take harms you or your brand, and address the reasons for early termination of the agreement. Some of these terms are necessary for business reasons and some are necessary for legal reasons. If you are going to be licensing your brand, make sure you work with someone who understands these types of deals and can walk you through it.
Additionally, if you are signing a deal with a publisher you need to know what rights you are giving up. If a publisher is seeking the ability to license your property to others, be it on posters, apparel, drinkware, board games, or other goods, you need to be aware of it. You need to understand how much you will receive from any deals, and you need to make sure you have some say in the process.
Licensing can be a great way to increase exposure of your brand and to make additional money. It is important to understand how these deals work, and it is also important to make sure you retain some control over your brand if you decide to license it. 

Thursday, May 4, 2017

The Messy Origin of the Ghost Rider

            I’ve recently written a few posts on creators attempting to reclaim ownership of the characters they created. I’ve discussed Siegel and Shuster and their attempt to reclaim Superman, Joe Simon and his attempt to reclaim Captain America, and Jack Kirby’s heirs’ attempts to reclaim most of Kirby’s creations for Marvel. Today, I’ll discuss Gary Friedrich’s attempt to reclaim ownership of the Ghost Rider character he developed for Marvel.
            Ghost Rider debuted in April 1972 in Marvel Spotlight No. 5.[1] In the comic book, Gary Friedrich was credited as having conceived and written the story.[2] The character was popular, and Marvel began publishing a Ghost Rider comic book series.[3]
            The story of how the character was created, however, is not easy to discern. In its opinion, the Second Circuit Court of Appeals acknowledges the facts around the character’s creation are heavily disputed.[4] Due to the procedural nature of the case – the lower court found for Marvel on summary judgment – the Second Circuit construed the facts “in the light most favorable to Friedrich, with all reasonable inferences drawn in his favor.”[5]
            Friedrich was working as a freelance comic book writer when he decided to pitch Marvel a character he had been developing over the years, the basics of which form the core of the Ghost Rider character.[6] Marvel agreed to publish the character in exchange for Friedrich assigning his rights in the character to the company.[7] At the time this transaction took place, there was not a written agreement.[8] Friedrich did not sign a work-for-hire agreement until 1978.[9]
            The 1909 Copyright Act applied to the creation of Spotlight No. 5, and the original copyright term for the work ended in 2000.[10] In 2005 or 2006, Friedrich learned he may have renewal rights in the Ghost Rider character and filed “a Renewal Copyright Registration in Spotlight 5 and Ghost Rider in February 2007.”[11] His company sued Marvel shortly afterwards.[12]
            In 2010, Marvel filed their answer in the lawsuit claiming Ghost Rider was made as a work-for-hire, and they filed a counterclaim against Friedrich for copyright infringement.[13] On summary judgment, the lower court found Friedrich’s signing of the 1978 agreement had conveyed all of his remaining rights to Marvel.[14] The lower court awarded damages to Marvel for Friedrich's copyright infringement, and it ordered him to stop using the Ghost Rider copyright.[15]
            On appeal, the second circuit overturned the lower court’s decision. It found the 1978 agreement did not convey any renewal rights Friedrich may have had in the Ghost Rider character, and it could not retroactively declare Ghost Rider a work-made-for-hire.[16] Additionally, the facts surrounding the creation of Ghost Rider were in dispute, which prevented the appellate court from deciding the issue.[17]
            Friedrich asked the court to reconsider his claim for summary judgment that he is the creator of Ghost Rider.[18] Applying the facts most favorably to Marvel, the court found the facts to be heavily disputed, and the facts presented by Marvel support an account of Ghost Rider contradictory to Friedrich’s.[19] Marvel’s version of events would show Friedrich had an uncopyrightable idea he presented to Marvel that was subsequently and collaboratively created by the contributions of Friedrich, Stan Lee, Roy Thomas (then-publisher of Marvel), and Mike Ploog (original artist) to Ghost Rider’s origins and appearance.[20]  
            The court sent the case back to the lower court for trial.[21] Three months later, Marvel and Friedrich settled the case.[22]
            This is a messy case, but there are two important lessons to be learned from it. First, if you don’t have a signed agreement addressing copyright ownership, you are asking for trouble. If Marvel had the appropriate contracts in place when the work was created, the whole situation would have been avoided. Second, it’s important to know your rights. Friedrich could have lost this case because he was unaware of copyright renewal rights and how they might apply to him. Fortunately for him, the appellate court revived his chances of proving himself at trial, which ultimately led to a settlement. 

[1] Gary Friedrich Enters., LLC v. Marvel Characters, Inc., 716 F.3d 302, 309 (2nd Cir. 2013).
[2] Id.
[3] Id.
[4] Id. at 308.
[5] Id.
[6] Id.
[7] Id.
[8] Id.
[9] Id.
[10] Id. at 310.
[11] Id. at 311.
[12] Id.
[13] Id.
[14] Id.
[15] Id. at 311-12.
[16] Id. at 314-16.
[17] Id. at 316.
[18] Id. at 320.
[19] Id. at 321.
[20] Id.
[21] Id.
[22] Eriq Gardner, Marvel Settles Lawsuit with ‘Ghost Rider’ Creator, Sept. 9, 2013, HollywoodReporter.com,  http://www.hollywoodreporter.com/thr-esq/marvel-settles-lawsuit-ghost-rider-624609 (last visited May 2, 2017).

Tuesday, April 18, 2017

Jack Kirby and Work Made For Hire

I’ve recently written a few posts about creators attempting to reclaim ownership of characters they created for other companies. You can find my posts about Siegel & Shuster trying to reclaim Superman here, and my post on Joe Simon’s attempts to reclaim Captain America here. Today, I’m going to talk about the heirs of Jack Kirby attempting to reclaim the rights to some of the characters he created for Marvel.
            As a court hearing the dispute between Marvel and his heirs noted, Kirby was a prolific producer of art.[1] In 1951 alone, he had 308 pages of art appear in published comic books.[2] As the court pointed out, this was typical for Kirby “in the years between 1940 and 1978.”[3]
Kirby first began working for Marvel in the 1940s, but left to work for a competitor.[4] Around 1958, Kirby once again started creating comics for Marvel.[5] It was undisputed during the lawsuit that when he returned there was no signed contract between Kirby and Marvel, and Kirby worked as a freelancer.[6]
The comics Kirby worked on during the period between 1958 and 1963 were the subject of the copyright termination lawsuit filed by his heirs, and the lawsuit was based upon a 1972 agreement Kirby signed giving Marvel “all right, title, and interest (including specifically any copyrights, whether statutory and at common law) that Kirby ‘may have or control’ in any of the works Kirby created….”[7] Kirby’s heirs were relying on section 304(c) of the 1976 Copyright Act, which grants authors, and their heirs, the ability to terminate a pre-1976 transfer of a copyright after 56 years has passed from the date of registration.[8] However, the termination right does not apply to works made for hire.[9] Some of the characters and books the Kirby heirs attempted to reclaim included: The Fantastic Four, The Incredible Hulk, The Mighty Thor, Spider-Man, Iron Man, The X-Men, The Avengers, Ant-Man, Nick Fury, and The Rawhide Kid.[10]
            The comic books at issue were created by Kirby and Stan Lee using the Marvel Method.[11] The Marvel Method was developed by Lee keep the artists he used busy.[12] Instead of providing a detailed script from which the artist would then create the pictures, Lee would hold a plotting conference where he would either provide an outline or synopsis to the artist or would talk about the overarching ideas he wanted in the comic book.[13] The artist would then draw the book based upon the loose guidelines Lee had given them.[14] Then, the writer would add the captions and dialogue to the artwork submitted by the artist.[15] Lee retained the right to edit, alter, or reject anything the writers or artists contributed.[16]
The court acknowledged Kirby had a freer hand to work under the Marvel Method than many other artists and made many creative contributions to the works on his own, such as creating and drawing new characters, “influencing plotting, or pitching fresh ideas.”[17]
Ultimately, Kirby’s original contributions and his freelancer status were not enough to claim ownership over the characters he helped create. In 2013, the Second Circuit Court of Appeals in New York ruled Kirby created all of these characters for Marvel as a work made for hire.
In order to understand how Kirby’s contributions were found to be a work made for hire, we must look to the law in effect at the time of the comics being created. During the time frame when the works were created, the Copyright Act of 1909 was in effect.[18] In the case of a work made for hire, the 1909 Act stated the employer would be considered to be the author and owner of the copyrighted work.[19] However, the 1909 Act did not define the words employer or work made for hire.[20] Instead, courts had to interpret these terms, many doing so using various tests.[21]
The Southern District of New York and the Second Circuit Court of Appeals, the two courts that heard the Kirby case, apply what is known as the “instance and expense test” to determine whether an employer-employee relationship existed.[22]   Under this test, if the work was done at the instance and expense of the employer, then it is a work made for hire and the employer would own the copyrighted work. As mentioned above, if the Kirby works were works made for hire, then his heirs would not be able to utilize section 304(c) of the 1976 Act and regain control over the copyrighted works.
Applying the instance and expense test, both the Southern District of New York and Second Circuit Court of Appeals found the works to be a work made for hire.[23] Since the Second Circuit had the final say on the matter, the facts as set forth in that opinion will be cited.
In evaluating the instance prong of the instance and expense test, the court acknowledged Kirby’s freelance status, but also noted the great majority of his work came from Marvel.[24]  Kirby rarely created something and pitched it to Marvel; most of his work came after Lee gave him an assignment.[25] Additionally, Marvel had the ability to reject or edit the pages Kirby submitted and did so on occasion.[26] After evaluating the facts on the record, the court said, “Marvel’s inducement, right to supervise, exercise of that right, and creative contribution with respect to Kirby’s work during the relevant time period is more than enough to establish that the works were created at Marvel’s instance.”
As to the expense prong of the instance and expense test, the court acknowledged Marvel paid Kirby only a flat per page rate.[27] It did not pay him royalties.[28] It did not pay him for his expenses or overhead.[29] The court found the relationship between Kirby and Marvel created an expectation of payment for Kirby’s art.[30] For the most part, Marvel paid Kirby for the art he submitted to them.[31] The court found “Marvel’s payment of a flat rate and its contribution of both creative and production value, in light of the parties’ relationship as a whole, is enough to satisfy the expense requirement.”[32]
Since the court ruled Kirby’s works were created for Marvel as a work made for hire, Marvel is the owner of the copyrighted works. Therefore, Kirby’s heirs could not terminate the transfer of copyright because under the law Kirby never had an ownership right to the works he created for Marvel.
Jack Kirby was responsible for bringing to life many of Marvel’s most iconic characters. Had the works Kirby created been done after the passage of the 1976 Copyright Act, the outcome of these cases may have been different because of the 1976 Act’s stricter work made for hire standard. The failure of Kirby’s heirs to reclaim the rights to comic books and characters he helped create is another example of the importance of using contracts and understanding copyright law.

[1] Marvel Characters, Inc. v. Kirby, 726 F.3d 119, 125 (2nd Cir. 2013).
[2] Id.
[3] Id.
[4] Id. at 125.
[5] Id.
[6] Id. at 125-26.
[7] Marvel Worldwide, Inc., at 724.
[8] 17 U.S.C. § 304(c).
[9] Id.
[10] Marvel Worldwide, Inc., at 733-34.
[11] Marvel Characters, Inc., at 126.
[12] Id.
[13] Id.
[14] Id.
[15] Id.
[16] Id.
[17] Id. at 126-27.
[18] Id. at 137.
[19] Id. at 137; see also Copyright Act of 1909 §62.
[20] Id. at 137.
[21] Id.
[22] Id.
[23] Marvel Worldwide, Inc., at 750; Marvel Characters, Inc., at 143.
[24] Marvel Characters, Inc., at 141.
[25] Id.
[26] Id.
[27] Id. at 142.
[28] Id.
[29] Id.
[30] Id. at 142-43.
[31] Id. at 143.
[32] Id.

Wednesday, March 29, 2017

Fighting for Captain America

            I recently wrapped up a lengthy series on the battle over the rights to Superman. You can find the first part of the series here. Now, it only makes sense to follow it up by discussing some other high-profile cases involving the ownership of comic book characters. First up, we are going to take a look at Joe Simon’s efforts to reclaim ownership of Captain America.
            In 1940, Timely Comics, the predecessor of Marvel Comics, published the first issue of Captain America Comics debuting the titular character.[1] Simon and Jack Kirby were the attributed authors of the book.[2]  Simon would continue working on the comic through the tenth issue.[3]
            According to Simon, and recounted by the Court, he “sold the Captain America stories to Timely for a fixed page rate plus a twenty-five percent share of the profits of the comic books.”[4] He also maintained he worked on the first 10 issues as a freelancer. There was no written contract between the parties, but Simon acknowledged he orally assigned to Timely his rights to Captain America.[5]
            In 1967, Simon filed a lawsuit in the Southern District of New York.[6] He sought the court to declare he had the sole right to the copyright renewal term under the Copyright Act of 1909.[7] A year prior, he also filed a claim in New York state court claiming Timely’s use of Captain America was unfair competition and misappropriation of his state law property.[8] After two years, the parties agreed to a settlement.[9] As part of the settlement, Simon acknowledged his contributions to the work were done as a work made for hire, and he assigned “‘any and all right, title and interest he may have or control or which he has had or controlled in [the Works] (without warranty that he has had or controlled any such right, title or interest)’” to Timely.[10]
            As with Superman, the change in law brought about by the 1976 Copyright Act gave Simon another shot at reclaiming the rights to Captain America. The new law gave authors the ability to terminate a transfer of copyright after a set number of years had passed, and an additional provision of the law stated a termination “may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant.”[11]
            In December 1999, Simon filed termination notices with the Copyright Office.[12] He claimed he independently created Captain America and authored the first issue and he did so as “‘neither an employee for hire nor a creator of a work for hire.’”[13] Marvel filed a lawsuit seeking to have the termination notices invalidated and reaffirming Marvel as the owner of Captain America.[14] The district court found for Marvel based upon the settlement agreement signed in 1969, in which Simon acknowledged Captain America was a work made for hire.[15]
            On appeal to the Second Circuit, the court found Simon was not prevented from litigating the issue of whether he created Captain America as a work for hire because of the previous settlement agreement. It also found that the prior settlement agreement retroactively acknowledging Captain America as a work made for hire is “an ‘agreement to the contrary’ under § 304(c)(5) of the 1976 Act.”[16]
The court’s decision paved the way for Simon to relitigate the issues surrounding the authorship and creation of Captain America at the district.[17] The case settled in 2003 with Simon once again assigning all of his rights to Captain America to Marvel.[18]
Simon’s battle with Marvel highlights two important things. First, using contracts with agreed upon and negotiated terms at the beginning of the relationship would have solved some of the problems. Second, creators should use the legal means available to them to make sure they are compensated adequately for their creations. Even though Simon did not reclaim ownership of Captain America, he was able to leverage his rights under the law to receive additional compensation for his creation.         

[1] Marvel Characters, Inc. v. Simon, 310 F.3d 280, 282  (2nd Cir. 2002).
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id. at 283.
[7] Id.
[8] Id.
[9] Id.
[10] Id. at 283-84.
[11] See 17 U.S.C. §304(c) and 304(c)(5).
[12] Id. at 284.
[13] Id. at 285.
[14] Id.
[15] Id.
[16] Id. at 292.
[17] See Id. at 293.
[18] Dispute over Captain America is Settled, NYTimes.com, https://mobile.nytimes.com/2003/09/30/business/media/dispute-over-captain-america-is-settled.html (last visisted March 28, 2017).

Tuesday, March 7, 2017

I Wrote a Book

     As the title of this post states, I wrote a book. More accurately, I've collected many of the posts from this site, expanded on them, and added new content to create my recently published book Comics Startup 101: Key Legal and Business Issues for Comic Book Creators. You can buy the book on Amazon as a paperback or as an ebook. You can click on either of the links below to purchase the book. (Note: affiliate links)

     The book covers different business entities creators might want to establish, using contracts, contract negotiations, copyrights, trademarks, right of publicity, fan art, fair use, work made for hire agreements, and many more topics. I also use lawsuits and disputes from the comic book industry to highlight and explain these issues. There's a lot of useful information in this short, inexpensive book. I hope you'll grab a copy and give it a read. Even if you don't end up making comics, there is a lot of valuable information for anyone working as a freelancer in the media or arts world.
     I'd also like to thank Douglas Paszkiewicz for providing the artwork for the cover. Look at this cover. It's excellent.

     If you like the cover, first buy the book. Second, visit Douglas' website, ArsenicLullabies.com, to view more of his work.

Tuesday, February 28, 2017

Publishing Agreements & Media Rights

In my presentations at comic book conventions, I stress the importance of contracts. I’ve written about it before here, and I’ve tackled it more in-depth in my soon-to-be-released book. Even so, it is an important topic for all creators to understand, particularly when it comes to their publishing contracts. 
I just finished writing a series (part 1 starts here) covering the battle between Siegel & Shuster and DC Comics over the rights to Superman. Siegel & Shuster granted all of the rights they had in Superman to DC Comics. They spent decades trying to regain some of those rights, and they had little success doing so. Their plight inspired the creator’s rights movement that gained steam in the ’70s and ’80s, and in my opinion, culminated with the formation of Image Comics. The main tenet of the creator’s rights movement is the belief creators should own all of the rights to the characters they create. This is a gross simplification of a longer, more nuanced discussion, but it will suffice for my purposes below. 
The reason I bring up the battle over creator’s rights is because I’m noticing a trend in some of the publishing agreements I’ve run across from smaller publishers. Publishing agreements used to be just what their name implied, an agreement to publish comic books. In the era I mentioned above, sometimes the larger publishers would want to purchase your characters. Other times, a creator would be working under a work made for hire agreement where the publisher would own all new creations. Either way, creators were not always realizing the full value for the characters they created.
These days, I’ve been noticing some publishers are also attempting to get exclusive rights to creator’s media rights in the publishing agreement. In addition to publishing your comic book, they also want to be involved, either directly or as an agent, in the development of your comic book into other forms of media, such as film or television. While most of the agreements acknowledge the creator as the owner of the property, these agreements are trying to lock-in long-term media rights deals to the benefit of the publisher. Deals like this would render the creator’s rights meaningless and guarantee the publisher a cut of any future media deals.
I understand publishers attempting to get these additional rights. They need to make money, and the publishing industry isn’t as lucrative as it used to be. However, it is important for creators to pay attention to the rights they are granting to the publisher.
The rights you possess as the creator of a work are vast and valuable. These rights can also be broken down into different segments, each having value. For example, you can have one publisher print and distribute your books in the United States and use a different publisher in Europe. You have just divided your publishing rights and restricted it by different territories. Theoretically, you can do this numerous times in multiple countries if you draft your contracts well, assuming someone is willing to pay you for those rights.
Ideally, you should separate your rights into numerous segments to increase your possible earnings. This includes separating the publishing rights to your creation from the media rights. It is usually in your best interest to do so. If you can avoid it, do not sign one agreement granting one party all of your rights. Try to keep your publishing agreement separate from your media rights deal. If you do want to work with one party, at least keep those agreements separate.
Make sure to pay close attention to (i) how long these agreements last, (ii) whether or not they’re exclusive, and (iii) how you can get out of them if the publisher or developer is not making you happy. The publishing agreement and media rights agreement don’t need to mirror each other, but it doesn’t hurt. If you do not see clear answers to the questions posed above and you can’t get it changed, you might want to rethink if you want to do business with that publisher.
When you’re starting out and someone wants to publish your comic book, it’s easy to get caught up in the excitement. Take your time and figure out if the deal is right for you. If you pass on it, something else will likely come along. If you make a bad deal, you might not be able to end the relationship, or worse – recover your rights.

Monday, February 6, 2017

Who Owns Superman - Part VI

(Note: All references to DC may also refer to its parent companies, Warner Bros. or Time Warner. Due to the complications of corporate ownership, I will attempt to simplify things by referring to DC only unless necessary.)

This is my final post on the battle for Superman. Part I, II, III, IV, and V can be found by clicking on the numbers.
After settlement talks broke down between the Siegel heirs and DC, the Siegel heirs went to court to reclaim ownership of Superman. Initially, they met with success in their attempts. In 2008, a California federal district court ruled they had reclaimed Siegel’s copyright interest in Superman and were a co-owner.[1] Later, the court limited the ruling to only apply to
(1) Action Comics No. 1 (subject to the limitations set forth in the Court's previous Order); (2) Action Comics No. 4; (3) Superman No. 1, pages three through six, and (4) the initial two weeks' worth of Superman daily newspaper strips. Ownership in the remainder of the Superman material at issue that was published from 1938 to 1943 remains solely with defendants.[2]
            The family’s victory, however, would be short-lived. DC appealed the district court’s ruling to the Ninth Circuit, and in 2013 the Ninth Circuit ruled the 2001 agreement, discussed in the last post, was binding on the Siegel heirs, and therefore, DC retained ownership over Superman.[3] The court found, as a matter of California contract law, there was sufficient, definite terms outlining substantive payments to Siegel’s heirs for there to be an agreed-upon contract.[4] The case was remanded to the district court, which upheld the ruling.[5] After the Ninth Circuit sent the case back to the district court, the Siegel heirs argued for the first time that Joanne Siegel had rescinded the 2001 agreement in written letters to DC, and DC did not object to the rescission.[6] The district court and the Ninth Circuit both rejected the newly raised argument because Joanne Siegel had passed away, and if the court allowed the Siegel heirs to raise these claims now the litigation would start all over again.[7]
            As I mentioned in my last post, Shuster passed away in 1992, and he left behind his sister and brother as heirs. In 1992, they signed an agreement once again granting all of Shuster’s rights in Superman to DC. After another change in the law allowed Shuster’s estate to seek termination of the transfer of copyright, his family sought to do so, and in 2012, the Ninth Circuit ruled the 1992 agreement between DC and Shuster’s heirs gave DC ownership of Shuster’s interest in Superman.[8]
In the last post, you may have noticed I mentioned the Siegel heirs’ attorney, Marc Toberoff. Running alongside the dispute between the Siegel heirs and DC, was another dispute between DC and Toberoff. During the litigation, documents were taken from Toberoff’s office and anonymously delivered to DC.[9] These documents reportedly showed Toberoff approached the heirs while they were negotiating with DC, and offered to buy their rights to Superman.[10] Shortly after the Siegel heirs stopped negotiating with DC, they signed an agreement with Toberoff to market and exploit their rights to Superman.[11] DC sued Toberoff and the related business entities involved in the deal for interfering with contractual relations between DC and the Siegel and Shuster heirs, amongst other claims.[12]  A court ruled DC waited too long to bring the interference with contractual relations claims and was barred by statute of limitations.[13]
            The first litigation involving the ownership of Superman occurred in 1947 and was resolved via a settlement. After another round of litigation, it looked like the ownership of Superman was settled in 1974. However, a change in the law gave Siegel and Shuster’s heirs another chance to reclaim their creation. In 2016, it appears as if the dispute has finally been resolved. DC owns the rights to Superman. Along the way, however, Siegel and Shuster, and their heirs, received substantive payments from DC.
 Most people would agree Siegel and Shuster made a bad business deal when they initially transferred their rights to Superman for $130 in 1938. However, that was not the end of the story. They continued working on, and getting paid for, Superman stories for a decade thereafter. During their lifetimes, they sued DC twice. After the first lawsuit, they received a settlement payment. After the second, DC decided to pay them a bonus and annual payments, which were extended to their heirs. Their heirs and estates sued DC again after they passed away.  
Personally, I’ve wavered in my thoughts on this issue. I used to believe, as many do, that Siegel and Shuster were screwed over by DC. I’ve also thought DC was always within their legal rights in everything they did. The true answer lies somewhere in the middle. DC could have, and should have, responded to and treated Siegel and Shuster better during their lifetimes when they fell on hard times, even though DC had no legal obligation to do so. Also, even though they made a bad deal initially, Siegel and Shuster had plenty of opportunities to remedy the situation. Eventually, after years of litigation, I hope both sides realize that Superman would not have enjoyed as much success as he did, and would not be as valuable as he is, without the other side. Barring any changes in the law, it appears the battle over the rights to Superman has ended.

[1] Siegel, 542 F. Supp.2d at 1145.
[2] Siegel v. Warner Bros. Ent., Inc., 658 F.Supp.2d 1036, 1095 (C.D. Cal. 2009); 504 F. App’x 586.
[3] Larson v. Warner Bros. Ent., Inc., No. 11-55863, at page 3, (9th Cir. Jan. 10, 2013).
[4] Id. at 4-5.
[5] Larson v. Warner Bros. Ent., Inc., No. 2:04-cv-08776, at page 2, (C.D. Cal. April 18, 2013).
[6] Larson v. Warner Bros. Ent., Inc., No. 13-56243 at page 6 (9th Cir. Feb. 10, 2016).
[7] Id.
[8] DC Comics v. Pacific Pictures Corp., No. 10-3633, at  13 (C.D. Cal. Oct. 17, 2012).
[9] Pac. Pictures Corp. v. U.S. Dist. Court for Cent. Dist. Of Cal., L.A., 679 F.3d 1121, 1123-24 (9th Cir. 2012).
[10] DC Comics v. Pac. Pictures Corp., 938 F.Supp.2d 941, 946. (C.D. Cal. 2013).
[11] Id. at 953.
[12] Id. at 947.
[13] Id. at 955.

Tuesday, January 24, 2017

Who Owns Superman? - Part V

 This is the fifth in my series of posts on the fight over the rights to Superman. You can find the previous posts herehere, here, and here.   

(Note: All references to DC may also refer to its parent companies, Warner Bros. or Time Warner. Due to the complications of corporate ownership, I will attempt to simplify things by referring to DC only unless necessary.)

The battle for Superman got interesting in the 2000s. As I mentioned in the last post, after Siegel and Shuster lost their lawsuit in the 1970s it looked as if the question of who owned Superman was answered. However, changes to the Copyright Act allowing authors to terminate previous transfers of copyright ownership gave Siegel's heirs – and after another change in the law, Shuster’s estate – another opportunity to attempt to regain control of Superman.
            In 1997, Siegel’s heirs, his widow and daughter, sent notices of termination to DC in an attempt to terminate the transfer of numerous works relating to Superman.[1] The termination date was listed as April 16, 1999.[2] As a court noted, “A flurry of settlement discussions between the parties quickly ensued, but just as quickly fizzled out. Nearly two years then passed without much discussion between the parties.”[3]
            The day before the termination date DC sent a letter to Siegel’s attorney denying “‘the validity and scope’ of the termination notices.”[4] The parties then reentered into settlement negotiations and signed an agreement to delay taking action on the termination notices as long as the agreement was in effect and the parties were attempting to resolve the matter.[5]
            In October 2001, the attorney for the Siegel heirs sent a letter to DC setting forth an outline of a settlement agreement the parties had reached. Terms of the settlement, which also included rights to Superboy, called for the Siegel heirs to receive “a $2 million advance, a $1 million non-recoupable signing bonus, forgiveness of a previous $250,000 advance, a guarantee of $500,000 per year for 10 years, a 6% royalty of gross revenues, and various other royalties.”[6]
A week later, DC’s general counsel sent back “‘a more fulsome outline’” of what DC believed they had agreed to and stated they were also working on a more detailed draft of the agreement.[7] In February 2002, DC’s outside counsel sent over a 56-page draft agreement for the Siegel heirs to review.[8] This prompted Siegel’s widow to write a letter to Time Warner’s chief operating officer in May 2002 in which she said she felt “‘stabbed in the back’” by “‘new, outrageous demands.’”[9] She concluded by stating that after four years of negotiating, the parties had failed to reach a deal, and it was unlikely there would ever be a deal based on the contract sent to them.[10] Siegel’s letter prompted Time Warner’s CEO to respond that they didn’t expect the agreement to be the final one and negotiations would continue on it, the company felt the main points previously agreed to were in the agreement, and DC still believed an agreement could be reached based upon the previously agreed to negotiations.[11]
            The Siegel heirs rejected a redrafted agreement submitted to them by their attorneys in September 2002, fired their attorneys, and sent a letter to DC’s president and publisher ending all negotiations with DC and its parent companies over the rights to Superman.[12] In October 2004, the Siegel heirs filed a lawsuit seeking to enforce their termination rights to Superman with help from their new attorney, Marc Toberoff.[13]
            In our next post, we’ll discuss the most recent lawsuits over the rights to Superman.

[1] Siegel v. Warner Bros. Ent., Inc., 542 F.Supp.2d 1098, 1114 (C.D. Cal. 2008).
[2] Id.
[3] Id.
[4] Id.
[5] Id. at 1115.
[6] Larson v. Warner Bros. Ent., Inc., No. 2:04-cv-08776, at page 9, (C.D. Cal. April 18, 2013).
[7] Siegel, 542 F. Supp.2d at 1114.
[8] Id.
[9] Id.
[10] Id. at 1115-16.
[11] Id. at 1116.
[12] Id.
[13] Id.