{"id":18789,"date":"2012-10-22T10:21:34","date_gmt":"2012-10-22T14:21:34","guid":{"rendered":"http:\/\/www.iposgoode.ca\/?p=18789"},"modified":"2012-10-22T10:21:34","modified_gmt":"2012-10-22T14:21:34","slug":"supermans-termination-kryptonite-subsequent-agreements-warner-bros-and-dc-comics-win-fight-over-supermans-copyright","status":"publish","type":"post","link":"https:\/\/www.yorku.ca\/osgoode\/iposgoode\/2012\/10\/22\/supermans-termination-kryptonite-subsequent-agreements-warner-bros-and-dc-comics-win-fight-over-supermans-copyright\/","title":{"rendered":"Superman\u2019s (Termination) Kryptonite: Subsequent Agreements \u2013 Warner Bros and DC Comics win fight over Superman\u2019s Copyright"},"content":{"rendered":"

DC Comics v Pacific Pictures Corp et al<\/em><\/a>, <\/em>the recent decision of a Central District of California court to deny termination rights to the heirs of Superman co-creator Joe Shuster, may be legally based in American copyright law. However, the case has its roots, loosely speaking, in Canada.<\/p>\n

<\/p>\n

Unfortunately for the estate of Toronto born Joe Shuster, it appears Superman\u2019s kryptonite, at least in regards to termination rights under \u00a7304(c)<\/a> of the American Copyright Act, 1976<\/em><\/a>, is subsequent agreements which have the effect of eliminating a termination right.<\/p>\n

Superman\u2019s journey from his 1930s birth to his modern inception is enough to fill a book<\/a>.\u00a0 Of relevance to Superman\u2019s termination right is that Jerry Siegel and Joe Shuster were the co-creators of the character. The duo owned the copyright in the character Superman. In 1938, Siegel and Shuster licensed DC Comics the \u201cexclusive right to the use of the [Superman] characters and story\u201d. Once the copyright was assigned to DC Comics, Siegel and Shuster continued to work on Superman\u2019s character development pursuant to a work-for-hire agreement. In 1992, Shuster passed away and his sister, Jean Peavy, was named sole beneficiary of his estate.<\/p>\n

The above discussion brings us to our first copyright issue - a slight distinction of relevance to the case. At issue in DC Comics <\/em>is the termination of copyright in the character \u00a0granted under the 1938 agreement (similar to\u00a0this one<\/a>\u00a0from June 1938), since that is the work created and licensed by Siegel and Shuster. Any other derivative additions to the Superman character which has led to his modern physical appearance<\/a> are owned by DC Comics under the work made for hire doctrine. Prior to the Copyright Act, 1976<\/em>, it was generally understood that copyright would belong to the employer if the work was created at the employer\u2019s \u201cinstance and expense\u201d. Thus, Siegel and Shuster\u2019s contribution post-licence, and any derivative additions to Superman, are not at issue in DC Comics <\/em>since works created under work made for hire agreements cannot be terminated. What is at issue is the termination of the original Superman character\u2019s copyright - not the totality of his modern appearance.<\/p>\n

Under the Copyright Act, 1976<\/em>, the United States Congress provides authors and their statutory successors with the opportunity to regain rights that were granted away via agreements and licences. This \u201csecond bite of the apple\u201d allows authors and their heirs to regain their copyrights in order to re-bargain for beneficial agreements with licensees. For copyrighted works which were licensed prior to January 1, 1978, \u00a7304<\/a> termination rights may be claimed at the end of the 56th or 75th year from the date copyright was originally secured.\u00a0 For the estate of Shuster, they are wishing to terminate the copyright in Superman after the end of the 75th year, in October of 2013.<\/p>\n

In order to terminate under \u00a7304, notice must be filed within a five-year window and must meet the requirements<\/a> of the United States\u2019 Copyright Office. Shuster\u2019s estate does not encounter issues with meeting the time frame nor the requirements; the biggest stumbling block is a 1992 agreement between Shuster\u2019s estate and DC Comics. \u00a0In 1992, Shuster\u2019s sister (and brother, Frank Shuster) signed an agreement with DC which stated DC would pay Peavy $25,000 per year for life as well as pay off Shuster\u2019s debts in exchange to settle \u201call claims to any payments or other rights or remedies which [Peavy] may have under any other agreement or otherwise, whether now or hereafter existing regarding any copyrights [\u2026] in any and all work created in whole or in part by [\u2026] , Joseph Shuster, or any works based thereon.\u201d<\/p>\n

The 1992 agreement has surfaced as Superman\u2019s (or at least Shuster\u2019s estates) kryptonite. Despite the language of \u00a7304(c)(5)<\/a> which states, \u201ctermination may be effected notwithstanding any agreement to the contrary\u201d, American courts in the Ninth and Second circuit have interpreted \u00a7304(c)(5) otherwise. Courts have permitted subsequent agreements to revoke and replace the original agreement, thus eliminating the statutory termination right. Based on the American jurisprudence, the key for the subsequent agreement is that it must be substantially more beneficial to the authors or their heirs in order to eliminate the statutory termination right.<\/p>\n

In Milne v Stephen Slesinger Inc<\/em><\/a>, the Ninth Circuit held that a 1983 re-grant agreement, which superseded 1930 and 1961 licences of Winnie the Pooh, eliminated the statutory termination right. The 1983 agreement, which was described as an adjustment of royalties, increased the royalties of the heirs in question by 400% in exchange to not exercise their statutory termination right. The new grant, which was a more lucrative deal for the author\u2019s heirs, was upheld by the Ninth Circuit as not being an \u201cagreement to the contrary\u201d under \u00a7304(c)(5). The Milnes were denied their statutory termination right since they \u201cwere able to obtain considerably more money as a result of the bargaining power wielded by the author\u2019s son\u201d.<\/p>\n

Following suit, the Second Circuit court in Penguin Group (USA) Inc v Steinbeck<\/em><\/a> <\/em>discussed a 1994 agreement by Elaine Steinbeck which re-licensed her late-husband John Steinbeck\u2019s copyrighted literary works. Several of John Steinbeck\u2019s works were governed by a 1938 agreement with Penguin Group. In 1994, Elaine Steinbeck, the owner of John\u2019s copyrights, entered into a \u201cnew agreement for continued publication\u201d with Penguin. The agreement included prior licensed works and additional literary works and \u201cchanged the economic terms of the 1938 agreement, mostly to Elaine Steinbeck\u2019s benefit\u2026\u201d. Under the 1994 agreement, Penguin was required to provide larger annual guaranteed advanced and royalties. The language of the 1994 agreement stated it would \u201ccancel and supersede the previous agreements\u201d.<\/p>\n

The court in Steinbeck<\/em> held the 1994 agreement eliminated Elaine Steinbeck\u2019s statutory termination right. In reaching their conclusion, the court emphasized Elaine Steinbeck\u2019s substantial benefits under the new agreement. Since Steinbeck had the ability in 1994 to renegotiate the terms of her previous agreement \u201cto her benefit\u2026\u201d, the court found that \u201cby taking advantage of this opportunity, she exhausted the single opportunity provided by statute to Steinbeck's statutory heirs to revisit the terms of her late husband's original grants of licences to his copyrights\u201d.<\/p>\n

Despite the above cases, Classic Media Inc v Mewborn<\/em><\/a> illustrates subsequent agreements will not supersede previous agreements if the benefit to the authors or authors\u2019 heirs is insubstantial. In Classic Media<\/em>, various copyrights were assigned for Lassie by the defendant Mewborn (one of three heirs of the original author Eric Knight) in 1976 for $11,000. In March of 1978, another agreement was signed which granted nearly-identical copyrights in exchange for $3,000. The plaintiff-licensee objected to Mewborn\u2019s notice of termination in 1996, and pointed to the 1978 subsequent agreement.\u00a0 Here, the Ninth Circuit distinguished Steinbeck <\/em>and Milne<\/em> and held that the 1978 agreement did not eliminate Mewborn\u2019s termination rights since the 1978 agreement was only a transfer of ancillary rights for $3,000; it did not revoke and supersede the previous assignment of rights.<\/p>\n

The above cases were cited in DC Comics<\/em>, but U.S. District Court Judge Otis Wright did not mention whether or not the substantiality of the benefit obtained by the author or author\u2019s heirs is relevant in subsequent agreements. As Eriq Gardner of The Hollywood Reporter<\/em> points out<\/a>, Judge Wright\u2019s reasoning in DC Comics<\/em> is likely to \u201ctrigger an appeal\u201d. Whether or not the substantiality of the benefit received by Shuster\u2019s heirs will be a major issue on appeal remains to be seen. It is clear that a spectrum exists between the benefits received in Milne<\/em>\/Steinbeck <\/em>and Mewborn<\/em>, and the $25,000 per year and additional debt clearing provided by DC Comics lays somewhere in the middle\u2026 perhaps, in my opinion, leaning a bit closer to Milne<\/em>\/Steinbeck<\/em>'s substantiality.<\/p>\n

Adam Jacobs is a JD Candidate at Western University, Faculty of Law and is currently on exchange at Southwestern Law School in Los Angeles, California.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

DC Comics v Pacific Pictures Corp et al, the recent decision of a Central District of California court to deny termination rights to the heirs of Superman co-creator Joe Shuster, may be legally based in American copyright law. 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