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Booker Zhang is an IPilogue Writer and a 1L JD Candidate at the University of Manitoba.

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On February 15, 2022, Spider-Man: No Way Home has hit at the box office, becoming the sixth-highest grossing movie of all time. Building on the massive success of Avengers: Endgame, Marvel has rapidly become one of the most famous and profitable movie studios worldwide. However, Marvel suffered financial hardships in the early years and made tough decisions. One of them is to sell the Spider-Man film rights. In 1999, Marvel with Sony and officially handed over its most famous superhero for $7 million, which created a list of complex copyright issues for the next 20 years.

In 2002, the first well-known movie was filmed by Columbia Pictures, a division of Sony Entertainment. The film generated $800 million at the box office, redefining what it means to be and successfully saving Sony’s Picture Division from a deficit. The popularity of Spider-Man also made Marvel realize that they gave up a money machine. However, Marvel had no right to unilaterally retain Spider-Man’s copyright unless Sony decided to terminate the contract—which seemed unlikely to happen.

A plot twist occurred in 2008 after Marvel released . The film received praise from critics. The American Film Institution selected it as one of the best films of 2008. The Walt Disney Company saw the potential and purchased Marvel in 2009. With solid financial support from Disney, Marvel Ìęhas successfully promoted the “” and earned a worldwide reputation. In the meantime, Sony’s The Amazing Spider-Man 2 released in 2014 was met with criticism, ending the reboot series.

In 2015, Marvel and Sony made an unprecedented that the two companies would share joint-ownership in Spider-Man's copyright. Marvel would film the movie while Sony would take all the box office earnings and be responsible for the investment and distribution. There is no dispute that the new Spider-Man, starring Tom Holland, is a hit.

According to the deal, Marvel was only authorized to have Spider-Man in 5 movies, and Spider-Man: No Way Home indicated the end of the contract. To avoid spoiling, I will not go into details of the plot, but the movie did result in concerns about the future of Spider-Man. Marvel is currently seeking to retain complete control of Spider-Man through a against Sony.

One interesting fact to mention is that Sony only has the film rights of Spider-Man, not the video game rights. Nevertheless, under the authority of Marvel, Sony released on PlayStation 4 — the best-selling video game in 2018. Until Marvel and Sony reach an agreement, Spider-Man's copyright (like his fate) remains up in the air.

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Meena Alnajar is an IPilogue Writer, IP Innovation Clinic Fellow, and a 2L JD Candidate at Osgoode Hall Law School.

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American actress Scarlett Johansson, known for playing the Black Widow in Disney & Marvel’s The Avengers franchise, took action against Disney on July 30, 2021 for an alleged breach of contract involving the recent Black Widow film’s distribution. According to , Johansson’s contract read that Black Widow would be guaranteed a ‘wide release’, meaning that “the film would be shown .” The caveat here in the streaming service age is the term ‘screens.’ Johansson’s legal team argues that ‘screens’ means movie theatre screens exclusively. This implies a theatrical release, where a . Disney countered the argument, stating that Black Widow received a theatrical release, but that this release does not imply an exclusive release to theatres only. As such, Disney was within their rights to simultaneously launch the film on their streaming service, Disney Plus.

Experts argue that this may be a case of ambiguity with the phrase ‘wide release.’ In contract law, ambiguity is addressed in several ways. Absent fraud or misrepresentation, the court may choose to examine —verbal agreements made between parties, usually in the negotiation stage. Johansson’s legal team stated that they between them and Marvel’s Chief Counsel, Dave Galluzzi. In the email, the studio attorney promised a release “like our other pictures” and that if plans should change, they would be “discussed with [Johansson’s legal team].” Further, even without the email, courts generally resolve ambiguity , which in this case is . Therefore, Johansson is likely to win in court.

On August 21, 2021 Disney responded to Johansson’s suit with a motion to move the suit to . Arbitration is a method of whereby parties choose a sole arbitrator and venue of arbitration to settle a dispute. The arbitrator’s ruling is . Hollywood dispute lawyer would make this move back in July. Moving this issue to arbitration helps and contract drafting out of the public eye and protects their public image from damage. But Disney’s representatives counter this view, stating that they simply wish that was agreed upon between both parties to the contract. Disney also argues that the company made good on its contract by displaying the movie on .

Additionally, instead of coming after Marvel, as the party involved in the contract, Johansson’s team is pushing for a public suit against the parent company Disney. Disney suggests that Johansson is participating in “gamesmanship” by making Johansson’s compensation Disney’s responsibility, rather than carrying out the dispute in arbitration with Marvel. is a dubious technique where lawyers create additional expense or agitate the other side to put them in a tough position where they must either settle or abandon the case. Since arbitration is often dispute resolution than a public lawsuit, Johansson’s team may indeed be partaking in gamesmanship with the constant push for a public lawsuit.

Whether the parties decide to settle the dispute confidentially or publicly, this contractual disagreement emphasizes the new contractual landscape for actors and production companies. With the rise in streaming services and decline of theatre capacity during the COVID-19 pandemic, movie production companies should work to be more explicit in their compensation plans and in their definition of ‘wide release.’ 30,000 movie theatre screens versus 30,000 users on Disney Plus can make millions of dollars of a difference.

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In 1990, Kimble patented a device that would allow the user to sling webs of aerosol string from their wrists and tried to sell the idea to Marvel. They demurred, but soon came out with their own, suspiciously similar products:Ìę. In 1997, Kimble sued Marvel and eventually the two sides settled on a licensing agreement that would give Kimble a lump sum plus ongoing royalties based on sales. Later disputes about what precisely constituted sales of the Web Blaster brought the two sides back to court and in that litigation, Marvel brought BrulotteÌęto the table.

Marvel argued that according to Brulotte, while there was no end date for the royalty payments in the original settlement, no royalties could possibly be owed past the expiry of the original patent. The District Court agreed with Marvel’s application of Brulotte. The Ninth Circuit Court of Appeals . Stare decisis and the need for national uniformity in patent law forced them to apply the Brulotte decision, even though they found it “counterintuitive” and “unconvincing”. Kimble appealed, and the question before SCOTUS was whether to awayÌęthe Brulotte interpretation of ?

In applying stare decisis to Brulotte, the majority gave added deference to the existing decision because it was an exercise in statutory interpretation, and more particularly because those statutes have been revisited repeatedly since the Brulotte decision. Despite changes to the surrounding statutes, Congress has not chosen to disturb the details interpreted in Brulotte.

The court did not draw any firm conclusions on whether there are existing royalty agreements that rely on Brulotte, but also gave deference to the decision on the grounds that there might be and disturbing the decision could cause dead agreements to return to life. They also rejected Kimble's proposed alternative — considering each example of post-expiration royalty clauses separately to determine their impact on competitiveness — as more complicated and expensive than the bright line rule established in Brulotte.

Kimble also offered arguments regarding the economic underpinnings of Brulotte, claimingÌęthatÌędecision was wrong about the effect of post-expiration royalties on competition and on technological innovation. The majorityÌęaccepted °­Ÿ±łŸČú±ô±đ’s economic analysis, but did not concludeÌęthat it must inevitably lead to overturning Brulotte. First, they note that the bar for overturning a decision is more than simple wrongness, but instead requires “a special justification over and above the belief that the case was wrongly decided." Further, they point out that the original decision in Brulotte was not predicated on the economic principles that Kimble took issue with. The court in Brulotte was not as concerned with protecting competition as with interpreting what they felt was clear Congressional intent.

While they chose not to overturn Brulotte, the majority could not muster an enthusiastic defense, repeatedly acknowledging that itÌęmay have been wrongly decided. Embedded within the decision are no fewer than two dozen references to Congress, including at least four places where they specifically mention that °­Ÿ±łŸČú±ô±đ’s arguments would best be addressed to the legislative branch. Much like the Ninth Circuit, SCOTUS does not seem like ”ț°ùłÜ±ôŽÇłÙłÙ±đ’s biggest fan. Also much like the Ninth Circuit, they seem to be stuck with it.

Jacquilynne Schlesier is an IPilogue Editor and JD Candidate at Osgoode Hall.

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The Evolution of the Kirby vs. Marvel Saga

In 2010, Marvel filed suit against Kirby’s heirs, who contended that they had the right to issue copyright termination notices to Marvel (and other entertainment powerhouses like Fox, Sony, Universal and Paramount Pictures) on characters created by Kirby under section Ìęof the . Marvel argued that Kirby’s works were made for hire and thus his estate had no termination rights. In August of 2011 the district court found in favour of Marvel, applying the “instance and expense test” to find that the works were indeed made for hire. The Kirbys thus appealed and subsequently lost both the and a for the Second Circuit appeal court to rehear the case. Their latest brings the issue to where it stands today.

The Issue Hits the Stands

The March filed by the Kirbys to the Supreme Court focused its attack on the “instance and expense” test used by the Second Circuit court to determine if a creation is work for hire (both doctrines explained rather well by IP lawyer Terry Hart ). ÌęThe Kirbys submitted that the test was used “under the 1909 Act to eviscerate the 1976 Act’s inalienable termination right, and it did so with respect to a major independent artist and numerous invaluable works.” It further suggested that the late Kirby was a “creative genius who redefined an industry from a small drafting board in his basement, without financial security or any participation in the success of his creations, [epitomizing] the very author/publisher imbalance Congress sought to remedy in enacting the termination provisions.” The petition acts as a sort of call-to-arms for creators and their families, who would find great power in holding termination rights over the wealthy and powerful studios relying on these individuals for their works and talents.

Marvel Brings the (Asgardian) Hammer Down

Marvel did not hold back in its to the Kirbys, clearly tired of this seemingly never-ending dance (wait, I thought Marvel liked sequels?). In addition to submitting that the case in question presented “a factbound application of a test uniformly adopted by the lower courts” Marvel sharply summarized its position stating: “It [the decision] implicates no circuit split, no judicial taking, no due process violation, and no grave matter of separation of powers. It does not remotely merit this Court’s review.” Amongst the various arguments used to dismiss the Kirbys’ claims, Marvel’s papers include a discussion of why the Second Circuit was correct in finding that Kirby’s creations were works for hire. Marvel noted that comic book legend Stan Lee “supervised the creation of Kirby’s work from conception to publication” and had the authority to approve Kirby’s art or seek revisions, while Kirby was paid at a fixed fee-per-page created. As such, Marvel argues that they, not Kirby, “bore the “risk” and potential expense if the publication of the works was unsuccessful” and that Kirby himself had repeatedly stated that Marvel owned all the rights in his works.

The Interesting Web That Has Been Woven

Even though it will be a while until we know which party the Supreme Court sides with, the Kirby’s reopening of the issue and Marvel’s response have ignited a conversation about copyright and theÌęidea of work for hire - a concept extremely significant to the entire entertainment industry. On the Kirbys’ team, Hollywood guilds , the , and the submitted an to the Supreme Court, stating that the appeal court’s decision and a broad interpretation of works made for hire regarding commissioned works creates a huge power shift within the entertainment industry in favour of studios. The decision allows for a “presumption that copyright ownership vests in a commissioning party as a work made for hire, rather than in the work’s creator.”

The guilds’ interest in the matter reflects the importance of the case for the entertainment industry, especially if the Supreme Court reviews the issue. As noted by , “film studios, record labels and publishing houses have built their businesses in no small part on the conveyed rights of artists like Kirby, who worked quasi-independently.” If the Supreme Court were to find in favour of the Kirbys’ camp, the leaders of the entertainment industry could see their copyrights in important (and financially lucrative) franchises, characters, and works be challenged and potentially taken away by individual creators and their families or estates. This could result in a huge shift in how these studios, record labels, and publishing houses do business, having to possibly create partnerships with these artists and seek permission to use the works their businesses rely on. The artist’s or creator’s role could thus be elevated within the industry, no longer just a “worker” or “gear” in the machine but a partner in the creation of entertainment products. If Marvel wins or the Supreme Court decides not to revisit the case I can only assume that the status quo would hold and artists and their families may be deterred from spending the time and money to challenge industry giants like Marvel again. Whether this is the correct way for the entertainment industry to function (cue debate on artist’s rights and artistic integrity vs. the commercialization of art and entertainment), that is a discussion for another day.

There is a strong chance the Supreme Court will not open the case. Only a handful of cases from those requested to be reviewed are examinedÌęeach year, and as noted by this is a year of hot-button topics and to the that may trump the Kirby estate’s petition in importance. Yet, there are signs that the case may actually be heard. For example, Marvel originally declined to respond to the petition and only did so after being asked to by the Court’s justices because they planned to take the case into conference - a step towards a hearing. Again, nothing has been decided yet, but I think I feel my Spidey senses tingling...

Jaimie Franks is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.Ìę

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In 2009, the Kirby heirs served Marvel with notices of termination of transfer covering the extended renewal term for works published between 1958 and 1963. After negotiations failed, Marvel sought and received a summary judgment that the works were for hire.

Work for Hire

governs transfers executed before 1978. This provision covers works in which copyright was initially secured before 1978. This section allows parties to terminate the transfer for the extended copyright period under the 1976 legislation, which is a longer term than the parties had initially contemplated. This provision, however, excludes works for hire, in which case the employer owns the copyright and will retain it after their employee passes away.Ìę To determine whether a work was "for hire", courts turn to case law interpreting the legislation in effect at the time - the . Under the 1909 act, courts developed the "instance and expense" test to determine whether a work was in fact "for hire" or not.

Instance and Expense Test

The general rule of the instance and expense test (fromÌę) is that, “a work is made at the hiring party’s instance and expense when the employer induces the creation of the work and has the right to direct and supervise the manner in which the work is carried out”. ÌęThe instance refers to the extent to which the hiring party provided the impetus for, or participated in, the creation of the work, while expense refers to the resources the hiring party invests or their power to supervise the creation of the work.

Application to Kirby

The Kirby estate argued that when Jack Kirby drew panels for Marvel it was as a freelance artist. Kirby undertook all the costs, including his materials, and he bore the risk of non-publication. In addition, he received a flat per-page rate regardless of whether Marvel required edits. During the relevant period, Kirby worked from home, set his own hours and did not receive fixed wages or benefits. Marvel conceded that Kirby had more creative freedom than many of his peers, as he was Marvel’s best artist. Under what Stan Lee termed the “Marvel Method”, Kirby sometimes created panels without a script after collaboration meetings where Lee outlined the contours of the story and filled in the script after panels were completed.

Marvel paid a flat, per-page rate and reserved the right to require edits or reject pages although it admitted that this was a rarity for Kirby’s work. Marvel contended that the flat per-page rate paid to Kirby and other artists at the time showed that Marvel took on the risk of editing, ultimate publication, and commercial success. Marvel further argued that Kirby did not complete his work on spec; his work was created with an expectation that it would be published due to an ongoing relationship, which required little supervision due to its prolonged nature. The fact that Marvel rarely exercised control over Kirby did not mean that they did not retain the right to do so. Even when working under the Marvel Method, Kirby's work was within and for the scope of titles published by Marvel, under the direction of Stan Lee.

The court held that Marvel established that Kirby created the works at their instance and expense. This raised the presumption that the works were made for hire, which is rebuttable by an agreement to the contrary, contemporary with the works.Ìę The Kirby estate put forward the argument that a 1975 assignment to transfer interests in works to Marvel suggested an understanding that Marvel did not have the rights at the time. The court disagreed and felt that in all likeliness this was a redundancy to protect Marvel and its rights, not an admission that it lacked the rights.

Comparison to Canadian Context

In my opinion, this decision would have reached a similar outcome in Canada. Canadian employers are the for an employee in the absence of an agreement to the contrary, while a freelancer generally owns first copyright in their works. The question of whether Kirby was a freelance artist would still depend on the between the parties and the control that Marvel was able to exert on Kirby. A Canadian court would consider whether Kirby worked on his own account or in the business of Marvel and the extent to which Marvel could control his work. I think that as the court ruled in Kirby, the works were not stand-alone; they were a part of the universe developed by Marvel. The works came from direction from Lee and other writers, and he drew panels based on instructions from Lee. This was a prolonged relationship during which Marvel directed Kirby's work and assigned him to specific story lines. Therefore the heirs to the Kirby estate would be unlikely to fare any better in Canada. Is this anÌę result? , perhaps? No matter the outcome, copyright law is always .

Allison McLean is an IPilogue Editor as well as a JD Candidate and second year student at Osgoode Hall Law School.Ìę

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Marvel Worldwide Inc. won its case to retain the copyrights to comic characters against the estate of legendary comic creator . The suit was in response to in order to reassert their claim to the creations.

Kirby’s estate filed the notices with Marvel and its licensees shortly after Marvel was acquired by Walt Disney Co. for 4 billion dollars in 2009. The 45 characters in question had been created between and included many Spider-Man, Fantastic Four, X-Men, and the Incredible Hulk. Marvel countered with a lawsuit claiming that Kirby’s creations should be considered “works for hire” and thus free from the termination claim.

US District Judge Colleen McMahon citing the lack of evidence presented by the Kirby Estate in rebutting the strong “work for hire” presumption under the 1909 Copyright Act. that the work was created at the expense and instance of Marvel as well as a written agreement signed by Kirby in 1972 stating he was not entitled to retain any ownership he may have of the creations. :

This case is not about whether Jack Kirby or Stan Lee is the real 'creator' of Marvel characters, or whether Kirby (and other freelance artists created culturally iconic comic book characters for Marvel and other publishers) were treated 'fairly' by companies that grew rich off their labor, it is about whether Kirby's work qualifies as work for hire under the Copyright Act of 1909.

, lawyer for the Kirby estate and , acknowledged that while it was a difficult case given “the various arcane and contradictory 'work for hire' decisions under the 1909 Copyright Act[,]" the case was not finished and that the estate planned to appeal the decision.

The New 91ŃÇÉ« federal court’s decision to side with Marvel undoubtedly came as a relief to many Hollywood studios and entertainment enterprises given the widespread nature of Marvel’s business. Although , its success appears questionable given , even with an experienced copyright wrangler in Marc Toberoff.

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