How Superman Dodged the Copyright Bullet (Part 2 of 2)

In 1947, Siegel and Shuster first took to the courts to reclaim the Superman they created in 1938. Over the years since this first battle over Superman, United States copyright law has changed, and similar efforts to regain control over Superman have been brought to the courts. In this part I shall briefly discuss Siegel’s and Shuster’s earliest efforts to reclaim Superman and the most recent, and unsuccessful, efforts of the Siegel and Shuster families to terminate the prior grants of the Superman copyright to DC in light of the right of termination of transfer under the Copyright Act of 1976.

  1. Superman and Early Litigation:

photo_siegel_shuster_supermanIn 1938, Siegel and Shuster sold Superman to DC Comics for $130.50 along with all good will attached thereto and exclusive rights to the use of the characters and story, continuity and title of strip. Although this agreement changed slightly over the next few years, each agreement between Siegel and Shuster and DC Comics made it clear that DC Comics owned the copyright to Superman. Despite the plain language of the prior agreements, Siegel and Shuster sought to void the agreements in 1947. This effort was unsuccessful and resulted in the finding that due to their prior contract with DC, they no longer held any rights in the Superman.

Unhappy with this outcome, Siegel and Shuster again tried to reassert control over the Superman copyright and brought suit to determine the status of the copyright renewal rights of the character in the mid-1960s and early 1970s. Yet again, the efforts of Superman’s creators were fruitless. The New York district court held that Siegel and Shuster were “precluded from relitigating matters which could have been raised in the 1947 action”. Therefore, the court determined that DC Comics also owned the renewal rights of the Superman copyright.

After this round of litigation, DC Comics, Siegel, and Shuster entered into another agreement regarding the rights to Superman. In the 1975 Agreement, Siegel and Shuster acknowledged that “all right title and interest in Superman resided exclusively with DC Comics and its corporate affiliates.” In return, DC Comics agreed to provide Siegel and Shuster with modest annual payments for the remainder of their lives, medical insurance, and credit them as the creators of Superman among other considerations. For the time being, DC Comics’ ownership of the Superman copyright was settled.

  1. The Fight for Superman’s Return:

Although it seemed the fate of Superman had been decided and DC Comics was the rightful holder of his copyright, Congress changed copyright law with the enactment of the Copyright Act of 1976. The Act provided authors with the right of termination of transfer, the ability to terminate prior grants or licenses of a copyright that occurred before 1978. This gave the Siegel family and the Shuster family another opportunity to reclaim the Superman copyright.

Superman_Godfall_(World's_End)Siegel v. Warner Bros. (District Court):

In 2008, a District Court issued what was, at the time, a landmark ruling in the battle between DC Comics and the Siegel family over the Superman copyright.  This ruling, combined with another order issued by Judge Larson, gave the Siegel heirs 50% of the copyright of the Superman material in Action Comics #1 and certain other stories, including his origin on the planet Krypton. Judge Larson, adhering to a previous Second Circuit decision, concluded: “all the Superman material contained in Action Comics, Vol. 1, is not a work-made-for-hire and therefore is subject to termination.” Nonetheless, due to the changes in copyright law since the 1974 case, he was not bound by the Second Circuit’s determination that the creators of Superman, and their heirs, were barred “from contesting ever again that all rights in Superman, including the renewal copyright, have passed forever to DC Comics.” Thus, Judge Larson was able to thoroughly consider the scope of the termination notices filed by Siegel’s heirs.

Judge Larson noted that the termination notices[1] filed by Siegel’s heirs had an effective date of April 16, 1999. Therefore, “the termination notices would leave unaffected (or better said, beyond their reach) any statutory copyright that had been secured in the Superman material before April 16, 1938.” , As such, the bulk of Judge Larson’s opinion discussed whether certain advertisements for Action Comics No. 1, which featured a black-and-white depiction of Superman, were within the reach of the termination notices filed by Siegel’s heirs. Unfortunately for Siegel’s heirs, Judge Larson found that the advertisements for Action Comics No. 1 fell just days outside of the reach of the termination notices, meaning that the copyright of the Superman appearing in the advertisements was held by DC Comics.

Nonetheless, Judge Larson found that the contents of Action Comics #1 were separately copyrightable and that the termination notices recaptured the rights to the entire storyline from Action Comics Vol. 1, Superman’s distinctive blue leotard (complete with its inverted triangular crest across the chest with a red “S” on a yellow background), a red cape and boots, and his superhuman ability to leap tall buildings, repel bullets, and run faster than a locomotive. Nonetheless, the court found that copyrightable elements, although few, arise from the pictorial illustration in the announcement and, therefore, DC Comics “may continue to exploit the image of a person with extraordinary strength who wears a black and white leotard and cape.”

Additionally, in a subsequent ruling resolving other issues in the case, Judge Larson expanded the works subject to termination beyond Action Comics #1, holding that the Siegel family had recaptured significant portions of the Big Blue Boy Scout’s history, including his original abilities and his origin as the Last Son of Krypton who came to Earth on the verge of Krypton’s destruction via a rocket created by his father.

Lastly and most importantly, Judge Larson considered DC Comics’ contention “that plaintiffs’ termination notice is no longer effective as the parties’ settlement negotiations led to them entering into a binding post-termination agreement that resolved the issues presently before the Court.” He found that, because the parties failed to come to an agreement on all material terms, the parties’ settlement negotiations did not result in an enforceable agreement. He stated that as the parties attempted to sketch in the finer details of a settlement from the broad outlines contained in the October 19 letter, more and more issues arose upon which they could not reach agreement, resulting in the negotiations falling apart.

He then noted that the Ninth Circuit and California courts “held that no enforceable agreement is reached when the parties had agreed to a rough outline of an agreement, but were thereafter unable to reach agreement on the finer details and the negotiations fell apart.” As the instant scenario was alike that was already considered by the Ninth Circuit and California courts, Judge Larson found that the October 19, 2001, letter did not constitute a post-1978  transfer  of the Superman copyright due to a failure of the parties to come to a meeting of the minds. People began to feel that this was the end of DC’s Superman but all these misconceptions of Judge Larson were dispelled by the Ninth Circuit.

The Return of Superman

36579_comics_supermanFollowing the district court rulings in Siegel, both DC Comics and the Siegel family appealed to the Ninth Circuit on various grounds. The Siegel family sought to overturn the district court’s ruling that several works featuring Superman were works for hire. DC Comics, on the other hand, presented several issues on appeal. Most importantly, DC Comics put forward the issue of “whether DC is entitled to entry of judgment on all claims on the basis of an October 2001 settlement agreement, confirmed by a letter from Larson that explicitly ‘accepted D.C. Comics’ offer’ and described in detail all essential ‘terms’ of the parties’ monumental accord.” Ultimately, it was this issue put forward by DC Comics upon which the Ninth Circuit focused its opinion, which reversed Judge Larson’s finding that the October 19, 2001, letter did not constitute an agreement between the parties.” The Ninth Circuit determined that Judge Larson had “failed to address whether the October 19, 2001, letter from Larson’s then-attorney constituted an acceptance of terms negotiated between the parties,” and held, “as a matter of law, that the October 19, 2001, letter did constitute such an acceptance.” In reaching this decision, the Ninth Circuit noted that the letter “plainly states that the Siegel heirs have accepted D.C. Comics’ offer of October 16, 2001” following this “were five pages of terms outlining substantial compensation for the heirs in exchange for DC’s continued right to produce Superman works” and then the signature of the Siegel family’s attorney.

As it read California law, the court stated that parties may “bind themselves to a contract, even when they anticipate that some material aspects of the deal will be papered later” and that “the only signature that is required is that of the party against whom a contract is sought to be enforced.”[2] In light of this, the Ninth Circuit found that the October 19, 2001, letter laid out the terms of the agreement in a way sufficiently definite so that a court can enforce it and was duly signed by an authorized agent. As such, the Ninth Circuit reversed Judge Larson’s ruling and directed the district court to reconsider DC’s third and fourth counter claims in light of their holding that the October 19, 2001, letter created an agreement. Thus the Ninth Circuit through their decision rendered all the other questions in the lawsuit moot.

In short Ninth Circuit saved the day.

(This was the second of Akshay’s two-part piece. You can read the first part here.)

[1] Under the 1976 Act a termination notice extends over all material in which the rights were granted to publisher 60 years before the issuance of such notice

[2] Facebook, Inc. v. Pac. Nw. Software, Inc., 640 F.3d 1034 (9th Cir. 2011).

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