Monday, May 23, 2016

Comics Startup 101 - Contracts, Part I

Comics Startup 101: Legal and Business Tips for the Independent Comics Creator
Part 3: Contracts, Part I
           This post is part of a series that grew out of my Comics Startup 101 panel I presented with comics creators at various comic book conventions around the Midwest. You can find the first post discussing doing a clearance search here, and the second post discussing choosing a business entity here. Today, we will be discussing negotiating contracts and using contracts to protect your work.
As always, I must disclaim that this is not meant to be an in-depth guide, nor is it meant to be complete legal advice. Any information provided in these posts is general in nature and should not be relied upon as legal advice. Meaningful legal advice cannot be given without a full understanding of all relevant facts relating to an individual’s situation. As such, you should consult with an attorney for specific legal advice that you might need. 

Contracts
I cannot stress enough how important contracts are to businesses. It is important that you have your own contracts for services you provide and the people you hire. It is also important that you pay attention to the contracts you sign. If you sign an agreement, then you are bound to all of the provisions contained in the contract. 
1)      Negotiating power
When you are presented with a contract, remember that it is a negotiation. If someone presents you with a contract to sign, read it. If you have no questions about anything in the contract and have no objections to what is being stated in the contract, then you can sign it. If there are things you don’t understand, ask for clarifications. If there is language in the agreement you are uncomfortable with, ask for changes. In most cases, the worst thing they can do is say no.
While negotiating contracts, do keep in mind which party has the negotiating power. Do you desperately want to work with them? Then they may have the negotiating power to dictate terms. Do they desperately want to work with you? Then you may have the negotiating power to change terms you dislike. Are there other options for you if the other party isn’t willing to work you? Then you have some leverage. Keep all of these in mind as you are negotiating your contracts, and remember, with great negotiating power comes great responsibility – use it wisely and don’t abuse it.
2)      Using your own contracts
            If you will be hiring others to work on your comic, you should have them sign a contract. The basics that should be in the agreement: how much you will pay them, what they will do for you, and when they will do it. It is also a good idea to clearly spell out who owns the intellectual property, artwork, etc. Failing to do so could lead to major problems down the road.
            For an example, look no further than the Angela saga involving Todd McFarlane and Neil Gaiman. In 1992, McFarlane asked Gaiman to write a story for his Spawn comic book series.[1] Gaiman and McFarlane did not have a written agreement outlining copyright ownership, “nor, for that matter, of how Gaiman would be compensated for his work, beyond McFarlane's assuring Gaiman that he would treat him "better than the big guys" did.”[2] The story in question, Spawn #9, introduced three new characters, one of which was called Angela,[3] and was a huge success.[4] This character was very popular with the readers of the Spawn series, and McFarlane and Gaiman agreed to use her in her own mini-series.[5] After a few years had passed, Gaiman claimed that he was a co-owner of the character and sued.[6] A court found that both owned an interest in the character,[7] and McFarlane conceded that Gaiman was a co-owner of Angela.[8] After a decade of litigation, the two sides settled,[9] with Gaiman transferring his rights to the character to Marvel Comics.[10] Had McFarlane and Gaiman entered into an agreement spelling out agreed upon compensation and ownership rights at the beginning of their relationship, a lengthy legal battle could have been avoided and Angela might still be in the Spawn universe.

Next week: Contracts, Part II




[1] Gaiman v. McFarlane, 360 F.3d 644 (7th Cir. 2004), at 649.
[2] Gaiman v. McFarlane, 360 F.3d 644 (7th Cir., 2004), at 649.
[3] Id at 650.
[4] Id at 651.
[5] Id.
[6] Id at 652.
[7] Id. at 644.
[8] Id at 657.
[9] Gaiman v. McFarlane (W.D. Wis. 2012).; Associated Press, Neil Gaiman, Todd McFarlane settle long-running Spawn lawsuit, CBC.com, Jan 31, 2012, http://www.cbc.ca/news/arts/neil-gaiman-todd-mcfarlane-settle-long-running-spawn-lawsuit-1.1277283 (last visited (March 14, 2016).
[10] Boucher, Geoff, FIRST LOOK: Neil Gaiman’s avenging Angela will make Marvel history, EW.com, May 09, 2013, http://www.ew.com/article/2013/05/09/neil-gaiman-angela-age-of-ultron (last visited March 14, 2016).

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