Comic Book Conundrum: Who Owns the Copyrights to the World’s Most Valuable Entertainment?

Screen Shot 2014-11-17 at 4.03.04 PMBy Chris Ferrell

Comic book characters are more famous now (and more valuable) than they have ever been. For example, Marvel Studio’s “Captain America: The Winter Soldier” grossed over $714 million worldwide. When Marvel launched its “Phase 3” platform of movies (extending “Marvel Universe” through 2020), the Internet exploded with social media craze. Just mentioning Marvel Studio’s slate of movies isn’t enough: this infographic shows every announced comic book movie for all major movie studios through 2020. Some of the comic characters in these billion-dollar movie ideas were originally created over seventy-five years ago and for an entirely different medium: comic strips. When these characters were first created, no one had any idea that they would one day gross billions of dollars, causing legal battles to rage for the copyrights of these characters.

One of the most important copyright legal battles has raged for nearly six decades over one of the most iconic characters of all time: Superman. Around 1938, the creators, Joseph Shuster and Jerry Siegel, sold their rights to the Superman storyline to DC Comics for $130.00 and additional, annual “work for hire” payments for supplying material to DC Comics. Once the character became widely popular, the creators tried to get their rights back. While the creators have since passed on, their estates have found a new means to attack the copyrights of the work: the 1976 Copyright Act’s termination provisions.

Termination rights are equitable accommodations under copyright law: they give heirs a second opportunity to share in the economic success of their family member’s work. Codified in sections 304(c), 304(d) and 203 of the Copyright Act, termination rights cover copyright transfers made on or after January 1, 1978 (the effective date of the 1976 Copyright Act). Section 304(c) allows termination of the exclusive or nonexclusive grant or a transfer of a license of the author’s original copyright executed before January 1, 1978. Because Superman was first published in 1938, § 304 applies. Under § 304, termination may be exercised at any time during a five-year period beginning at the end of 56 years from the date the copyright was originally secured. Section 304(d) extends these termination rights to 75 years. Thus, under § 304, the Superman copyright could be reclaimed between 1994 to 1999, based on the initial publication date of 1938.

Both the estates of Shuster and Siegel sued under these provisions to reclaim the copyrights their family members had transferred. In both cases, the Ninth Circuit Court of Appeals sided with DC Comics, affirming the district court’s finding that separate agreements signed between 1992 and 2001 gave the rights to DC Comics, superseding any previous agreements under the copyright laws. Shuster’s heirs then appealed their case to the Supreme Court, which, at the beginning of its fall 2014 term, denied certiorari. This left the Ninth Circuit ruling in favor of DC in effect and Shuster’s estate without any claim to the Superman copyrights.

Because the Supreme Court denied certiorari, the movie studios that own the rights to these iconic characters can rest easy and continue to roll out their billion-dollar movies without much fear of pending copyright termination claims. However, the Court’s decision not to review these copyright claims leaves some uncertainty moving forward for the creators (and heirs) of comic book characters and termination rights under the copyright laws. Further, the Court’s decision subtly affects many other ongoing comic book legal battles, including battles over the rights to Spider-Man, the Hulk, and the X-Men. Moving forward, it will be interesting to see how copyright laws account for creator’s rights, and whether the Supreme Court will ever launch an attack on the Marvel universe-sized copyright issues in the comic book industry.

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