Copyright Termination Basics

 

        The news recently broke that the original screenwriters of the Predator movie are seeking to reclaim ownership of their screenplay from Disney, who acquired the franchise when they bought 20^th Century Fox. Since the concept of copyright terminations will continue to be an issue for years to come, I am going to do a quick summary.[1]

 

What is a copyright termination?

 The 1976 Copyright Act included provisions that allowed authors of works to terminate a previous transfer of the work. For transfers executed by the author after January 1, 1978, Section 203* of the Act states that authors can terminate the grant during a 5-year window 35 years after the original grant.

*There are two other provisions addressing terminations for works that are specific to works created or assigned before 1978. I will not be addressing those provisions here.

 

Why were authors granted the right to terminate copyright transfers?

 The termination provision was added as a replacement for the renewal term under the previous copyright law.[2] The provision was included as a safeguard for authors to protect against being exploited with unfavorable deals. Congress noted that the full value of a work can’t be known until it has been exploited.[3] By giving authors the ability to terminate the transfer, they have the ability to participate in the value of the work.

 

How can an author terminate a transfer?

The author, or his heirs or estate, may terminate a transfer by sending a written notice of the termination. It must be signed by the author, it must state the date of the termination (which must fall in the 5 year window mentioned above), and it must be served between two and ten years before the termination date. A copy of the notice must also be filed with the Copyright Office.

 

Can the termination provision be waived via contract?

No, the termination provision cannot be contracted around. The author cannot give up or waive the termination right before it vests.

 

Are there restrictions on what types of work can be terminated?

Yes, the termination provision does not apply to works-made-for-hire.

 

What happens after termination?

The author reclaims all rights that were transferred and can exploit the work in the future. Derivative works prepared during the term of the grant may continue to be exploited by the grantee pursuant to the original terms, but no new works may be produced.

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[1] All provisions discussed can be found in 17 U.S.C. §203

[2] H.Rep. Report No. 94-1476, 124.

[3] Id.

Book Review: Poisoned Chalice: The Extremely Long and Incredibly Complex Story of Marvelman (and Miracleman)

 

I’ve always found the history behind Marvelman fascinating, but I never got around to doing a deep-dive into it. Fortunately, Pádraig Ó Méalóid’s book Poisoned Chalice: The Extremely Long and Incredibly Complex Story of Marvelman (and Miracleman) exists to fill in this history. As the title suggests, the history of the character Marvelman (also known as Miracleman) is both long and complex. Poisoned Chalice provides a detailed chronicle of the character.

The book starts before the creation of Marvelman. It provides details and context for the rise of superhero comics, and the lawsuit that led to the creation of Marvelman. It goes on to discuss the character’s resurrection in the early 1980s, its name change to Miracleman later in the decade, and the legal wrangling that has sidelined the character for the last few decades.

Marvelman was created in the ’50s. The character exists because of DC Comic’s lawsuit against Fawcett’s Captain Marvel, in which Captain Marvel was found to infringe upon DC’s Superman character.[1] After the lawsuit, the publisher of Captain Marvel comics in Britain decided to continue the series by changing the name of the comic and character, redesigning the costume, and making some other changes to the story. Hence was born Marvelman, a character that enjoyed some success in Britain until publication stopped in the early ’60s.  

A new publisher relaunched the character in the ’80s in Warrior magazine. The new  stories were written by Alan Moore. Moore’s run on the character, and later Neil Gaiman’s, are what elevated the character in the eyes of many fans. However, complex legal issues involving the character have stagnated new stories for decades.

Ó Méalóid does his best to untangle the complex ownership issues that surround the character. It is a daunting task, and he relies mostly on previously given interviews and those that he has conducted himself. Without being able to directly review the contracts of those involved with the character, it is nearly impossible to completely answer the question of ownership at most points in time. However, as the book notes, Marvel seemingly owns the character now.

Of particular interest to me are the copyright and trademark issues that surround the character. Marvelman’s creation sprang directly from a copyright lawsuit. Additionally, the question of who owns the copyright in the character has played an important role in the character’s publication history in the past.

While not as well handled in the book, trademark law has also played an important role in the character’s history. In the late 1980s, U.S.-based Eclipse Comics chose to reprint the Marvelman stories that ran in Warrior and to continue the stories that Moore started. Trademark law is the explanation for the character’s name change from Marvelman to Miracleman so as not to run afoul of any trademarks owned by Marvel Comics. Additionally, the question of who owned the trademark for Miracleman in the United States likely delayed Neil Gaiman’s and Marvel’s attempts to republish and continue Gaiman’s stories with the character.  

Poisoned Chalice is a self-published book that collects and expands on a series of posts Ó Méalóid did for Comics Beat. The book could have benefited from better chapter formatting and some additional editing to tighten up some sections. Additionally, as I alluded to above, at times the book did not always clearly reflect or describe some of the nuances of copyright and trademark law and its impact on the character. However, Ó Méalóid’s attempts to rely on legitimate sources instead of merely industry heresay is commendable, and it makes the book a treasure trove of information for anyone interested in researching the history of the character.

Overall, Poisoned Chalice is a fascinating and detailed look into one of the more intriguing characters of the comic book industry.  (Affiliate link below)

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[1] Click the link for my brief description of the Captain Marvel lawsuit.

Co-creator Compensation

            A question I often get from someone thinking about making a comic is how should they pay their co-creator. In most cases, it’s the writer asking this question in regards to paying the potential artist on their book. There is no one right answer. Each person’s situation and needs will vary. Unless there is a definite reason for choosing a specific form of compensation, I recommend being flexible. Below, I’m going to discuss the three most common types of payment arrangements that I see.

 1. Work-Made-For-Hire

 If a creator wants to own and control the rights to their book outright, then they will need to have everyone who works on it sign a work-made-for-hire agreement. In these cases, the only compensation being paid is the page rate or page rate equivalent.
            For example, if Writer wants to hire Artist to draw their book, then Writer will pay Artist a set fee and have Artist sign a contract giving up all rights to their work.
            It’s a straightforward arrangement, but it’s not ideal for everyone. Also, if you want to go this route, be prepared to pay more for it. Most artists have different, higher rates for work-made-for-hire projects. (And if you’re an artist and you don’t, then you should.)
 

2. The Percentage Split

Another common arrangement is the percentage split. Each creator receives a set percentage of any profits from the book. Often, this is split 50/50, but I’ve seen different percentages. If the parties are receiving a different percentage, then it’s usually the artist receiving the higher percentage.
Sometimes, the artist will receive a higher percentage until a certain amount is reached, and then the profits will revert to a 50/50 split again. For example, Artist might receive 80% percent of the profits until Artist has received $3,000. After Artist has received $3,000, then Writer and Artist would each receive 50% of the profits going forward.
            There are a lot of different ways to structure this type of deal, but it is still relatively straightforward. For a lot of co-creators, this is the type of deal structure they will consider.
 

3. The Co-Creator Advance
            

The co-creator advance is similar to the percentage split, but with a little twist. In this scenario, one of the creators is paying a fee to the other. However, the deal is structured so that the creator making the payments (often the writer) recoups his money before the co-creators start splitting profits by percentage. 
            For example, Writer agrees to pay Artist $3,000. All profits from the book will be paid to Writer until they have received $3,000. Once Writer has earned back the money paid to Artist from the profits, then Writer and Artist will split all profits going forward 50/50.
            If a writer can afford to do it, this is a nice option that recognizes and respects the effort put into the project by your artist co-creator.
            

There are many different ways a creative team can decide to divvy up compensation. Some of it will be dictated by each party’s personal circumstances. Some of it will be determined by where the money for the project is coming from, e.g., if the publisher is issuing an advance.
The three payment arrangements discussed above are common, and they can be adjusted and modified to fit your specific needs. Consider them as helpful starting points when choosing a compensation structure for your project.    

The Power of No

 

            My comic book lawyer colleague Gamal Hennessy has been writing about leverage on his blog recently. He is using Dave Chappelle’s recent pressuring of Netflix to remove old Chappelle’s Show episodes from its service as an example of how to acquire and exert leverage. His series of posts are worthwhile reading. Leverage is an important concept, and I’d like to expand on Gamal’s thoughts a bit.

            When writing my Comics Startup 101book and blog posts, I briefly discussed leverage. In short, leverage is who holds the most power in a negotiation. If one party has more leverage in a negotiation, then they are more likely to obtain the contractual and financial terms they desire.

            Who holds the most leverage in comic book publishing? Most people will default to saying the publisher holds the most leverage. To some extent, they are correct. A publisher decides what books they will publish, and most comic book creators aspire to have their books printed and distributed by a publisher. Comic book publishing contracts heavily favor the publisher and not the creator. Even so, a creator, even an inexperienced creator, does have one piece of leverage they can always exercise—saying no.

            Creators need to carefully evaluate any deal a publisher offers. By doing so, you might find the publisher’s leverage to be flimsy. Is the publisher paying you an advance? If they are, then that works to the publisher’s advantage. If they are not, then you need to analyze how the deal benefits you. Most comic book publishing deals, particularly from smaller publishers, require the creator to front the costs of creating the book by paying for the art, lettering, coloring, etc. The publisher pays to print and distribute the book, recoups those costs, and then splits the remaining profits with the creators (often 50/50). Other questions to consider: How big is the publisher? Do they have the ability to promote and distribute your book in relevant quantities? Does working with them further your agenda or career? What other rights are you giving up? Creators should evaluate all of these points and decide if the deal makes sense for them.

            In most cases, when presented with a publishing contract, or contract of any kind, the comic book creator’s only leverage is to say no. Most creators are afraid to do so. There is always the fear that another deal might not come along or that this is your only shot. Saying no and losing a deal might seem like a bad idea, but protecting yourself from bad deals or exploitative contracts is important as well. It is challenging to balance these conflicting scenarios.

It’s scary to say no, but it can also be empowering. By saying no to a bad deal, you are valuing yourself and your work. Instead of giving up profits and control over your work, you are keeping it for yourself. More creators should be willing to do so.

Why is saying no important? Publishers need your works. They need new content to stay relevant. If publishers do not continue to print new, interesting works, then it is hard to remain profitable and grow. It is not a secret that far too many publishers offer poor contract terms. Some will negotiate. Some won’t. Most rely on a creator’s fear of not being published to get leverage and tilt the balance of negotiating power to their side. But, if their deal terms are bad, and you and others are willing to reject them, then it is a small step toward obtaining better deals for everyone.

In today’s age of self-publishing and Kickstarter, creators should seriously consider whether agreeing to a contract with a publisher is in their best financial interest. In addition to the above, when you factor in that most publishers want 50% of any media deals you might receive, and will not pay you any additional compensation for these rights, then the deal is even less favorable to you. Saying no is powerful.

Do Dr. Seuss and Fair Use (Comic)Mix? - Part 3

 

            The Ninth Circuit Court of Appeals recently issued a decision in the Dr. Seuss Enterprises, L.P. v. ComicMix LLC case I’ve been following for a while. (You can find my post initial post on the case here, and the post on the district court decision.) After Seuss lost at the district court on its trademark and copyright infringement claims, it appealed. The Ninth Circuit’s ruling overturned the lower court’s decision favoring ComicMix’s fair use defense and upholding the dismissal of Seuss’ trademark claims.

            To summarize the background, ComicMix decided to publish a book titled Oh, the Places You’ll Boldly Go! that was a mash up of Star Trek and Dr. Seuss. It raised almost $30,000 on Kickstarter, and ComicMix was having discussions with retailers and publishers about further distributing the book. However, ComicMix did not obtain a license from either Seuss or CBS/Viacom (the owners of Star Trek). Seuss sent cease-and-desist letters to ComicMix, but ComicMix believed its book to be protected by fair use. Seuss filed a lawsuit alleging copyright infringement, trademark infringement, and unfair competition in 2016.  In a summary judgment action, the district court ruled in favor of ComicMix by finding that it was a fair use and there was no trademark infringement. Seuss appealed.

            The Ninth Circuit reviewed the district court’s analysis of ComicMix’s fair use defense and found the court improperly evaluated and weighed the fair use factors. I’ve discussed fair use before, but as a reminder, the factors are:

(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.

In evaluating the above factors, the Ninth Circuit disagreed with the district court’s conclusion, particularly in relation to factors one and four.

In analyzing the first fair use factor, whereas the district court found the work to be transformative, the Ninth Circuit did not. The Ninth Circuit determined the book was not a parody as it did not comment upon Dr. Seuss’ works, was not transformative, and primarily used Dr. Seuss’ work as a means to better commercialize its own work. The court placed considerable emphasis on the fact that ComicMix slavishly recreated scenes from Oh, the Places You’ll Go! and other Seuss works in its book.  The copying and recreation of the works was also determinative in finding against ComicMix on factor three.

Finally, the Ninth Circuit disagreed with the district court’s analysis of factor four. The district court acknowledged that there might be market harm to Seuss by allowing the publication of ComicMix’s book, but it found that Seuss failed to submit sufficient evidence to show harm. However, the Ninth Circuit emphasized that fair use is an affirmative defense to copyright infringement, and the defendant carries the burden of proving fair use. The burden was on ComicMix to show that there would not be market harm. ComicMix failed to do so, and the Ninth Circuit found it likely Seuss would be harmed, particularly in its ability to continue authorizing derivative works. In concluding its analysis of the fourth factor, the court said, “The bottom line is that ComicMix created, without seeking permission or a license, a non-transformative commercial work that targets and usurps Go!’s potential market.” (slip opinion at page 30).

I found interesting the court’s emphasis on ComicMix’s dedicated copying of Seuss works, its disregard for seeking a license, or opinion of counsel. Particular quotes that jumped out to me were: “The creators thought their Star Trek primer would be ‘pretty well protected by parody,’ but acknowledged that ‘people in black robes’ may disagree. Indeed, we do.” (slip opinion at page 5) and “Despite being ‘slightly concerned,’ ComicMix did not consult a lawyer or pursue the option of a license.” (slip opinion at page 9) Reading comments like this, you know the defendant is going to be in trouble. I also thought it interesting to note the court mentioned that ComicMix also did not seek a license from the owners of Star Trek. Overall, the opinion definitely took a hostile opinion to the activities of ComicMix.

As a creator, it is important to remember that fair use is a defense. I’ve stated it many times, but claiming your work is fair use will not protect you from a lawsuit. Fair use is evaluated on a case-by-case basis, and educated opinions can vary. For instance, while I would not have advised ComicMix to proceed with their book relying on a fair use defense, as I’ve always thought it a long shot, I also thought the district court’s decision was sound. Apparently I was wrong.

When you use someone’s copyrighted work in your own, you are inviting trouble. If you do so, you should proceed cautiously and carefully and take efforts to make it a fair use.

You can find the court’s opinion here.

Comic Book Recommendations - 2020

 

           I’m often asked for comic book recommendations, but I’ve always found it tricky to provide them. First, I am usually woefully behind on comics. There will be the occasional series I might be temporarily caught up on, but I’m usually months behind. Second, tastes differ. My preferences might not match up with the person I’m recommending a book to. Finally, breadth of choices. There are so many good books out there right now that it’s difficult to narrow it down.

            Nevertheless, with all of the foregoing caveats out there, I’m going to post some of the books I enjoyed this year. Additional caveats, just because I read them this year does not mean they were necessarily released this year. Also, this year has been long—really long—and I am having a really hard time remembering what I read pre-pandemic. Finally, I’m primarily going to focus on trades/graphic novels that are creator-owned.

            (Links to Amazon are affiliate links. Even so, if you’re intrigued by these books, try to buy them from your local comic shop or book store.)

Come Home, Indio

Jim Terry’s autobiographical comic about growing up and dealing with addiction is raw, difficult to read, and wonderfully executed.

 

The Plot vol. 1

An intriguing start to a story that reminds of a hybrid between Swamp Thing and The Haunting of Hill House.

 

Something is Killing the Children, vols. 1 & 2

Creepy, briskly-paced. The story follows Erica Slaughter as she tries to stop monsters in a small Wisconsin town. It feels like Tynion and Dell’Edera are making something special.

 

Grumble, vols. 1 & 2

Quirky and enjoyable story about a petty crook turned into a pug.

 

Outpost Zero, vols. 1-3

This series has already been cancelled, but it shouldn’t stop you from checking it out. Interesting premise that builds slowly. Story focuses on descendants of humans who fled Earth and are tryig to survive on a remote planet. Reminds me of the TV show Ascension.

 

My Heroes Have Always Been Junkies

A stand alone entry in the Criminal world that is an engrossing read. If you’re a fan of noir, definitely worth reading.

 

Clean Room, vols. 1-3.

A little sci-fi, a little horror. Clean Room focuses on a woman investigating her fiance’s suicide and the cult that may have something to do with it.

These Savage Shores

An English vampire travels to India and encounters something deadlier than himself.

 

On Forming a Comic Book Union - Part III

 

Editor’s Note: To conclude my series of posts on the challenges of forming a comic book creator’s union, I have a few final thoughts. The other posts can be found here and here.

 

Fascinatingly to me, even though I understand work-made-for-hire law, the interplay between copyright ownership and employment status had not really occurred to me as it pertains to labor law until researching this article.

Under current copyright law, a publisher can only own a work if it is created by an employee or made pursuant to a work-made-for-hire agreement (see this post for a more detailed discussion of work-made-for-hire). If the creator was not an employee and if there was no contract, then the creator retains ownership. If there is a contract but the work does not fall into one of the enumerated work-made-for-hire categories (see here), then the creator retains the rights. The creator can assign ownership to the publisher, but the original creator would retain the right to terminate the transfer later—a proposition most publisher’s would like to avoid (see my posts on the rights to Superman, Captain America, etc.).

The above seems straightforward, but it can get complicated. For instance, the analysis becomes murkier when applied to independent contractors. Even though they may be classified as an independent contractor, if the relationship with the employer meets the criteria for a common law agency relationship as set forth in Community for Creative Non-Violence v. Reid (see my first post on forming a comic book union), then it is possible for the created work to be deemed a work-made-for-hire.

For instance, one of the reasons the Kirby estate’s challenge to reclaim ownership over the Marvel characters he created failed was because the appellate court, in applying an older test to determine work-made-for-hire, ruled him to be an employee for purposes of copyright ownership. Granted, that was applying an older copyright law, but it makes for a fascinating “What if” scenario today. If the case hadn’t settled before it reached the Supreme Court, the outcome may have been very different.

Finally, this split in wanting to own the intellectual property outright versus the desire to classify workers as independent contractors played a key role in the formation of the Writers Guild in the 1930s and 1940s.[1] The studios were arguing on one hand that the writers were employees within the meaning of the 1909 Copyright Act so that the studios would own the copyrighted instead of the writers, and on the other hand, the studios were also arguing the writers couldn’t unionize because they were independent contractors.[2]

Even though copyright law and employment law are two very distinct practice areas, they do overlap when it comes to work-made-for-hire. Generally speaking, just because someone is deemed an employee for copyright purposes does not mean they are an employee for labor law purposes. However, California takes the view that an employer cannot benefit from a contractual work-made-for-hire provision without also being considered the employer. Knowing your employment status, and what your agreements say, is very important.

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[1] See Fisk, Catherine,  (2018) “Hollywood Writers and the Gig Economy,” University of Chicago Legal Forum: Vol. 2017, Article 9. Available at: https://chicagounbound.uchicago.edu/uclf/vol2017/iss1/8

[2] Id., at 184-185.