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.