Who owns your media rights?

           Over the past few weeks, Lion Forge and Oni Press merged, Dark Horse signed a first-look deal with Netflix, and Atlas Comics, a defunct publisher, sold its library of characters to a production company. The primary driver for all of these moves is to develop comic books, and the characters and stories they contain, into movies or television shows.

Optioning comic book rights to producers is currently where relatively easy money can be found for publishers. Often, publishers are operating on small margins, and the money they can make from these types of deals gives them some breathing room and some profit. Hopefully, it also puts a nice amount of money into the creator’s pockets as well.

            To me, these news stories are a great reminder that creators need to be aware of what they are giving to the publisher when signing a contract. My thoughts on the matter have been documented before, but it’s worth revisiting. To me, when you sign a deal with a publisher, you should only be giving them the right to publish your comic. If they want to do other deals with you, such as shopping your rights to Hollywood, then I believe it should be a separate deal, and it shouldn’t be tied to your publishing agreement.

Your media rights have value. Ideally, you should be getting paid for the privilege of shopping your media rights. If you are not being offered money for the ability to shop your media rights, then you need to ask what value, if any, the publisher adds by merely having the ability to shop your media rights. Do they add more value as an intermediary than doing it yourself or aligning yourself with an agent? Many of these publishers feel like they are entitled to your media rights as part of the publishing deal. After all, they published your book, shouldn’t they get a cut? Maybe. It depends on what the publisher brings to the table. Do they have connections that will benefit you? Have they had many properties optioned in the past? Are they aggressively shopping your project, or just hoarding the rights and hoping to take a cut if someone waving money comes along? Unfortunately, I’ve seen far too many publishers fall into that last category.

            If you have a publisher interested in obtaining your media rights, then – at a minimum – you should (i) be certain you understand how much, if anything, you’ll get paid, (ii) how long the publisher has the ability to shop your media rights and whether they revert to you, and (iii) whether you have approval over the final deal.

            The trend of publishers asking for media rights is on the rise, particularly among newer publishers, and it doesn’t look like it will abate anytime soon. By asking the above questions and understanding what you are agreeing to, you will be in a better position to evaluate the deal. Unfortunately for many newer creators, after evaluating the above, you may come to the conclusion that you’re better off not agreeing to the deal. This is a lament I’ve heard from numerous veteran creators who agreed to unfavorable deals early in their careers and lost control of their work. Sometimes saying no to a deal is the best thing you can do.  

Do Dr. Seuss and Fair Use (Comic)Mix? - Part 2

            I mentioned the Dr. Seuss Enterprises, L.P. v ComicMix, LLC case in two previous blog posts (here and here). Recently, the court District Court for the Southern District of California issued a summary judgment in the case. In its  ruling, the court found that the ComicMix book, Oh, the Places You’ll Boldly Go!, was entitled to a fair use finding and dismissed the case.

            By way of background, ComicMix launched a Kickstarter campaign in 2016 to fund a mash-up book in the style of Dr. Seuss’ Oh, the Places You’ll Go, but instead using characters from Star Trek: The Original Series. The Kickstarter campaign raised almost $30,000, and ComicMix had discussions with publishers and retailers about distributing the book. ComicMix did not seek to license from either the Seuss Enterprises or CBS/Paramount, the owners of Star Trek, because they believed their work to be a parody and hence constituted fair use under copyright law. After some back-and-forth correspondence between Seuss Enterprises and ComicMix, Seuss Enterprises filed a copyright and trademark infringement lawsuit in November 2016.

            During the next two years, the case wound its way through the litigation process. Early on, the court found the work to not be a parody, but did believe it was transformative. However, it declined to rule on the issue. Meanwhile, ComicMix was able to get the trademark claims related to the title dismissed.

            In the most recent summary judgment ruling that addressed the remaining claims, the court again revisited ComicMix’s fair use defense. After weighing all of the fair use factors,[1] the court found that the balance was close, but slightly favored ComicMix. Working in ComicMix’s favor was that even though the work was commercial, the court found it to be transformative. The court also found ComicMix’s book did not take more material than was necessary for the creation of its book, and Seuss Enterprises could not prove there would be market harm to its works, or its licensing programs, if ComicMix’s book were to be released. The court also ruled that Dr. Seuss’ illustration style was not a protectable trademark right, and that the typeface used in the title of the work is also not a protectable trademark.

            A few notes of caution for readers. First, this case is not yet over. Seuss Enterprises could appeal the decision to an appellate court, and the outcome could be different. Personally, I think the court has it right in this scenario, but one can never be certain. Second, this decision only applies to the Dr. Seuss elements incorporated into ComicMix’s book. If CBS/Paramount were to sue over the Star Trek elements used in the book, the analysis of the fair use factors could turn out differently. Finally, as I’ve said before, fair use is a defense to copyright infringement, and it is performed on a case-by-case basis. If someone thinks you are infringing on their work, they will probably sue you, and a court will decide if it’s a fair use. If that happens, it will take a significant amount of time and money to settle the issue, as evidenced by ComicMix’s appeal for help funding this litigation that I talked about last year.

            Overall, it is a good win for ComicMix, and it helps shed some light on how courts view mash-up works in relationship to fair use. However, this does not mean that all mash-up works are automatically entitled to fair use, and anyone creating them should proceed with caution.

The court option can be found here. 

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[1]“(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

  (2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.” 17 U.S.C. Sec. 107.

The Umbrella Academy and Abandoned Trademarks

            I was watching an episode of Netflix’s The Umbrella Academy when a familiar name appeared on a store sign: Gimbel Brothers Department Store. For those unaware, Gimbel Brothers, and its shorter version Gimbels, was a popular department store chain decades ago. Personally, I’m intrigued by Gimbels for a few reasons. First, it traces a substantial part of its origins back to Milwaukee, where I currently reside. Second, it expanded into a large national chain, and even acquired other retailers that still operate today. And, third, it shut down operations in 1986.

            I’d like to discuss that third point today. One of the defining characteristics of trademark law is that you must continually use the trademark in commerce. If you continue to use the trademark in commerce, then your trademark is protected. However, if you cease using the trademark in commerce, then it can be considered abandoned and anyone can use it. Under the federal trademark law, aka the Lanham Act, a trademark is presumed abandoned after three years of non-use or if the trademark owner discontinues use of the trademark with an intent not to resume use.

            I find it fascinating that Gimbels, a trademark abandoned in 1986, or thereabouts, continues to live on in popular media. Because of the store’s former fame, the Gimbels name resonates with consumers and provides an air of realism to the media it appears in. While Gimbels did appear in some popular media before its closure, notably Miracle on 34^th Street, since closure the store has been featured or referenced in the film Elf, as well as the television shows Happy!, The Goldbergs, Once Upon a Time, The Simpsons,[1] and, now, The Umbrella Academy.

            Once a trademark has been abandoned, others are free to use it or register it as a trademark. Theoretically, the appeal of using the Gimbels or Gimbel Brothers name is because the store is no longer operating, and people using its name in media wouldn’t need to worry about infringing on its trademark or damaging its goodwill.

            However, it turns out there is still a store bearing the Gimbels name. It is a small shop based in Maine, called Gimbel & Sons, and it was once sued by the Gimbels department store for trademark infringement.[2] The lawsuit was dismissed, and the Maine store was allowed to continue using its name provided it attached a sign stating it was not affiliated with the bigger department store chain. After Gimbels went out of business, the Maine store acquired the federal trademark registration for Gimbles Department Stores and has licensed it out to Hollywood, reportedly receiving $5,000 for its use in Elf and also licensing it for use in The Goldbergs.[3] I have not been able to determine if The Umbrella Academy licensed the name or attempted to skirt the issue by using the full Gimbel Brothers Department Store name on store signage.

            It’s yet another reminder that if you are seeking to register a trademark or claim trademark protection for your book, brand, or goods, continued use of the trademark is a must, and if you are thinking about using an abandoned trademark, it’s worth your time to make sure it’s actually abandoned. 

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[1] https://en.wikipedia.org/wiki/Gimbels

[2] https://www.upi.com/Archives/1982/02/22/Giant-conglomerate-sues-country-store-for-trademark-infringement/6222383202000/

[3] https://www.boothbayregister.com/article/sometimes-little-guy-wins/19284; see also https://www.nytimes.com/2006/02/19/nyregion/thecity/only-the-store-is-gone.html

DeCarlo and Archie Comics - Part 2

Editor’s Note: This is the second part of a blog post discussing the lawsuits between Dan DeCarlo and Archie Comics. The first part can be found here.

The final lawsuit involving Dan DeCarlo and Archie Comics[1] was another action brought by Archie Comics seeking declaratory judgment and injunctive relief against DeCarlo’s estate, who passed away in December 2001. In the lawsuit, DeCarlo’s estate tries again to argue ownership claims for the Josie and Sabrina characters and also adds the character Cheryl Blossom and her family. The court reaffirmed the previous decision that DeCarlo was equitably estopped from contesting Archie Comics ownership of the Josie and the Pussycats characters. As for Sabrina, the court found there to be a presumption that Sabrina was a work for hire, and if it wasn’t, DeCarlo’s signing of the 1988 and 1996 agreements, in which he assigned all rights he might have in previous works to Archie Comics, conclusively grants ownership of Sabrina to Archie Comics. The court also found the agreements signed in 1988 and 1996 also transferred any rights DeCarlo may have had in the Cheryl Blossom characters. Furthermore, the court also ruled that the copyright assignment termination notices the estate sent to Archie Comics in an attempt to reclaim ownership of the character are null and void because (i) the Sabrina work was a work-made-for-hire, and (ii) the statutory time period for filing the termination notices in regards to Josie or Cheryl Blossom had not occurred. In a footnote the court states, “Whether defendant or DeCarlo's heirs may be entitled to invoke Section 203 with respect to any of DeCarlo's Josie or Cheryl Blossom works is a question which, in the case of the 1988 assignment, can occur no earlier than 2013. The Court declines to rule on that issue at this time.”[2]   

Speaking bluntly, these cases are a bit of a mess, but it’s easy to pass judgment in hindsight. In interviews, DeCarlo stated that he contacted a Cartoonist’s Association attorney in 1970 because he was upset about how Archie Comics handled the Josie cartoon—not telling him about it until the day before it was to air.[3] The attorney he spoke with told him he had a good case, but he would probably be blackballed in the industry if he pursued it; so, he didn’t.[4] In the 2000 case, DeCarlo’s attorney sought to primarily argue state law breach of contract claims. After the arguments failed in the Josie case, instead of focusing on copyright law, they attempted to retry many of the same state law and contract claims, which I imagine didn’t endear them to the court. I can only speculate that they chose this approach because they didn’t like their chances under copyright law. Even though it appeared the court in the last case gave the estate an opening to seek termination of copyright assignments, thus far I have not seen any indication the estate has done so, and based on the outcome for the Shuster family, it might not be successful.

  While DeCarlo was a valuable contributor to the characters inhabiting the Archie universe, his attempts to gain control over the characters failed. As is so often the case when a creator asserts claims against his former employer, the relationship ended poorly. After the first lawsuit was filed, Archie Comics immediately fired him after having worked for Archie Comics for  over 40 years, stating they “found that they and their employees could not stomach having [DeCarlo], in his words, “sneaking” around Archie Comics’ offices.”[5] We’ve seen it before in other cases I’ve discussed. When a company feels like its ownership of its intellectual property is being challenged, it will lash out. It’s an understandable reaction, but incredibly disappointing to see. As a fan, you would prefer to believe these companies would take care of the creators who’ve contributed so much to the company’s legacy (and profits), but that is seldom the case.

The takeaway for creators: (i) know your employment status and if the work is a work-for-hire, (ii) make sure you understand what you are giving away when you sign agreements, (iii) don’t wait too long to take action if you think someone is infringing on your rights, and (iv) if you sue someone, the relationship will likely end.

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[1] Archie Comic Publications, Inc. v. DeCarlo, 258 F.Supp.2d 315 (SDNY 2003)

[2] Archie, 258 F.Supp.2d at 334 n.121.

[3] The Comics Journal, No. 229, page 43 (2000).

[4] http://www.donosdump.com/Jozine/LifeOfJosie/Life08a.html

[5] https://www.peterdavid.net/2014/03/31/archie-and-the-lawyer-guys-part-2/; http://www.donosdump.com/Jozine/LifeOfJosie/Life08.html

DeCarlo and Archie Comics - Part 1

            I never read Archie Comics when I was younger. My gateway into comic books was through Superman, the X-Men, and the launch of Image Comics. Recently, partly owing to my family’s obsession with Riverdale, I’ve started reading Archie comics—both new and old. As such, I was unaware of much of the history and circumstances concerning the creation of Archie characters and had overlooked the litigation between Dan DeCarlo and Archie Comics in the early 2000s.

            DeCarlo worked for 40 years as an artist at Archie Comics, helped create and define the classic, iconic look of many of the characters, and helped create the characters Josie and the Pussycats, Sabrina the Teenage Witch, and Cheryl Blossom.[1] In the late 1990s and early 2000s, as Archie exploited some of these properties in TV and movies, DeCarlo filed a lawsuit asserting his right to ownership.

            The first lawsuit, DeCarlo v. Archie Comic Publications, Inc.,[2] sought to assert DeCarlo’s rights to Josie and the Pussycats. In this suit, DeCarlo claimed that he was solely responsible for creating the characters, and he granted Archie Comics the right to use the characters in comic books and strips, which they subsequently breached by licensing the characters outside of comic books and comic strips and asserting ownership. His attorneys initially filed the lawsuit in state court alleging various breach of contract claims and other contract and state-based claims, but it was transferred to federal court because the main elements of the lawsuit arose under copyright law.

The court found that DeCarlo had waited too long to pursue some of the claims, i.e., the statute of limitations had run out, and his failure to do so in a timely manner had caused harm to Archie Comics because it relied upon his lack of ownership claims to its detriment, which is known as equitable estoppel. DeCarlo had actual knowledge of Archie licensing the works outside of comics and asserting ownership claims in the ’60s and ’70s. Additionally, DeCarlo signed agreements in 1988 and 1996 that seemingly assigned all rights he may have had in his previous works to Archie Comics. As such, the lawsuit was dismissed.

The second lawsuit, Archie Comic Publications, Inc. v. DeCarlo, 141 F.Supp.2d 428 (SDNY 2001), dealt primarily with DeCarlo’s claims to creating Sabrina the Teenage Witch. In this case, it was Archie Comics filling a lawsuit seeking a declaratory judgment against DeCarlo and his claims to ownership regarding Sabrina. Similar to the case involving Josie and the Pussycats, DeCarlo’s attorneys attempted to assert many state law claims and added a trademark claim against Archie Comics. The court found the Copyright Act pre-empted the state law claims. DeCarlo’s counterclaim of false designation of origin and reverse passing off arose because Archie Comics did not credit him as a creator on the TV and cartoon show and instead used the phrase “Based on Characters Appearing in Archie Comics.” The court ruled there was no confusion, and the statements at issue were not misleading.     

Next time: Part 2 discussing the final case involving Archie Comics and Dan DeCarlo.  

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[1] http://articles.latimes.com/2001/dec/25/local/me-17888

[2] 127 F.Supp.2d 497 (SDNY 2001).

Superheroes and the Public Domain

            In the intellectual property world, 2019 is a special year. For the first time in 20 years, copyrighted works have resumed entering the public domain en masse due to the expiration of their copyright term. This means as of January 1, all works originally published in 1923 are now in the public domain.

Works stopped entering the public domain in 1998 due to the passage of a law that year which extended the copyright term of works created before 1978 by an additional 20 years. So, works that would have entered the public domain in 1999 remained under copyright protection until this year.  

Here’s a brief copyright history lesson. Under the United States Copyright Act of 1909, copyrighted works were entitled to an initial 28-year term from the date of publication and a second renewal term of an additional 28 years. So, in total, a work could be protected by copyright for up to 56 years. However, a work would enter the public domain if it lacked a proper copyright notice, e.g., © Dirk Vanover 2019, or if it wasn’t renewed.

The 1976 Copyright Act changed the duration of copyright terms for works created before 1978 (the year the Act went into effect) to 75 years from the date of publication, more or less. In 1998, the Copyright Term Extension Act, aka the Sonny Bono Act, aka the Mickey Mouse Act, changed the length of copyright terms again by adding an additional 20 years to the term—95 years from the date of publication.

Works created by a single author and protected by the 1909 Act enter the public domain piecemeal—as their copyright terms expire. This is why works created in 1923 are now in the public domain after 95 years. However, works created by a single author after 1978 are protected for the life of the author plus 70 years and enter the public domain all at once.[1]

I’m bringing this up for two reasons. First, it’s great that works are entering the public domain again. Even though works published in 1923 or after may have already entered the public domain, it can be difficult to determine. As mentioned above, there are only two other ways for a work to have entered the public domain previously – either the work lacked or had an improper copyright notice, or it wasn’t renewed after its initial 28-year term. To be certain a work is in the public domain would require research, which can be lengthy, costly, and indeterminate.

Second, I often see people discussing online whether such-and-such golden age superhero is in the public domain. As might be evident from what I’ve written above, determining this can be tricky. If the work was created in 1923 or earlier, which really isn’t applicable because not many superheroes existed back then, now it is in the public domain—at least those original aspects introduced in that work. For any other work, it is safest to assume it is protected by copyright. Otherwise, you’ll have to determine if the work fell into the public domain due to a lack of copyright notice or if it wasn’t renewed. Furthermore, even if a work has entered the public domain, only that specific work itself is in the public domain. So, if you want to utilize the character in a new work, you’d be limited to just those elements of the character introduced in the work that is in the public domain. (See my post about Sherlock Holmes here for a further explanation).

            Overall, it is good news for everyone that previously copyrighted works are now entering the public domain again. However, if you want to use a character you believe to be in the public domain, you should proceed with caution and make sure you’re in the clear before you create a new work. Otherwise, you could expose yourself to a possible copyright infringement lawsuit.

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[1] However, corporate works and works made for hire are still a fixed term of 95 years from publication or 120 years from creation, whichever is shorter.

Dead Rabbit Q & A

            A few weeks ago, I wrote a post about a trademark infringement lawsuit involving the Dead Rabbit comic book released by Image Comics. For more information, see the original post here, but basically, a bar in New York named Dead Rabbit (“DRT”) made menus in comic book form, planned to release a book utilizing the comics in 2018, and registered a trademark shortly after Image announced a comic book series named Dead Rabbit in February 2018. DRT then filed a lawsuit for trademark infringement against Image and the comic book store Forbidden Planet.

 Today, I’m going to do a little armchair lawyering in the form of a Q&A.

Why did DRT sue a comic book shop?

I believe there are a few reasons why Forbidden Planet was sued. From the complaint, the most obvious reason is that DRT, which is located in New York, wanted to make sure the lawsuit was heard in New York. Image is a California company. By adding a defendant in New York, the chance of the lawsuit being switched to a different court in a different state is diminished.

Another possible reason Forbidden Planet was included is to put pressure on Image to settle quickly. Retailers and distributors don’t like being caught up in litigation over a product they are selling but do not manufacture or control. By suing a retailer, there’s more pressure on Image to make the case go away quickly. 

Is there any risk to Forbidden Planet?

Yes. Selling a product that infringes a trademark constitutes infringement. Even though Forbidden Planet was unaware the Dead Rabbit comic book infringed upon someone else’s trademark, they could still be liable for the issues they sold.

Why did Image recall the book?

The primary reason to recall the book is to protect itself and retailers. As mentioned above, selling an item that infringes someone’s trademark can make you liable, even if you didn’t make it. Also, continuing to use a trademark after you’ve been made aware of it can increase your liability to the trademark owner. It’s safer to pull the allegedly infringing items until the problem has been resolved.

Will this case go to trial?

Doubtful. From my perspective, there’s not much reason to go to trial. Image has already recalled the book from the marketplace, and it looks like they are agreeing to an injunction against further publications bearing the Dead Rabbit name. The only remaining issue would be monetary compensation, if any.

Due to the fact DRT filed the trademark application after the comic book was announced, and its registration was issued in September, there are bound to be questions about whether DRT can actually enforce the federally-registered trademark against the comic book. A particularly tricky issue will be determining when Image and Forbidden Planet used the Dead Rabbit trademark in commerce. Is it when they began soliciting orders, which was before the trademark was registered, or is it the on-sale date in shops?

The likelihood of a court awarding DRT its requested $2 million in damages also seems unlikely, especially considering the issues surrounding the timing of DRT’s trademark registration. Unless DRT, and its attorneys, are hoping to get legal fees awarded, the amount available to recover doesn’t seem very high.

For instance, in orders sent to comic book shops, issue 1 sold an estimated 19,031 copies[1] to shops, and issue 2 sold an estimated 9,761 to shops[2]. If the shops sold every issue, which is unlikely, at $3.99 an issue, the total sales would be $114,880.08—and not all of that money was pocketed by one entity. Due to the somewhat convoluted flow of money through the comic book distribution system (Consumer to Retailer to Distributor (Diamond) to Publisher), the amount at issue in this case is likely to be less than the amount stated above, unless it sold well through other retail channels. Regardless, while it’s a decent amount of money, it’s a relatively small amount to get into a high-stakes legal battle over.

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[1] http://www.comichron.com/monthlycomicssales/2018/2018-10.html

[2] http://www.comichron.com/monthlycomicssales/2018/2018-11.html