Adam Jacobs, one of our other IPilogue editors has written an extensive article on what could be considered the “sister case” to the Siegel estate’s legal battles . details the denial of termination rights (provided in ) to the heirs of Joe Shuster, the other co-creator of Superman. Many of the issues present in that case were discussed in Siegel, et al v Warner Bros Entertainment Inc, et al. The decisions of the trial judge and the 9^th Circuit Court of Appeal are found and , respectively.

While the decision was made with regards to US Copyright law, legislation that differs in a number of ways from the Canadian copyright regime, it is useful to look at the reasoning behind the inclusion of termination rights in different copyright regimes, and how the policies that drive Canadian and US copyright law in this area might be applied in future cases.

First, it will be useful to discuss what happened in the appeal to the 9^th Circuit court in the case at hand. On appeal, the court determined that regardless of the arguments made for and against the Siegel estate being able to put to use their termination right against WB and DC Comics (an issue discussed at length in the trial decision), a letter from the Siegel estate’s lawyer was enough to find that a valid contract existed between the two parties. The court stated that years of ongoing negotiations between the two parties that resulted with this letter on October 19, 2001 – a letter reflecting material terms that had been orally agreed to – was enough to bind the parties even if After the court determined this, it stated that such a decision would render all the other questions in the lawsuit moot and therefore, declined to address the other issues. As such, it seems like the reasoning given on trial (where the Siegel estate won its case) would stand to be precedent upon the issue (with admittedly low persuasive value).

The main reasoning that such termination rights were introduced in the Copyright Act of 1976 was to allow creators to renegotiate the terms of deals . Such a decision allowed for deals made before 1978 to “expire” after 35 years (upon the decision by the original copyright owner to do so). Policy-makers in US copyright law, in this respect, seem to put little faith in the ability for creators to contract their works out to others; but in the grander scheme, such protection, especially for those contracting when new media forms were in their infancy, might balance out the difficulties that seem to arise within the legal system when applying such a law.

Again, while such a decision and discussion of policy seems to have little to do with Canadian law, where no exact analogue to this “termination right” exists in the , many parallels can be drawn to our legislation. Section 14 of the Copyright Act could be seen as providing a very similar protection (and resulting rights) for creators and their families. Section 14(1) provides a reversionary interest in copyright to the estate of the author which vests 25 years after the death of the author. Through the operation of this statute, the families of deceased creators will be able to renegotiate the contracts for the assignment/licence of the work for the remaining term of copyright.

In the future, it will be especially curious how termination rights operate in US Copyright law. The American legislature seem to be slightly more keen on extending the terms of copyright in order to protect some of the foundational works of American culture (the last Extension Act in 1998 wasn't nicknamed the by accident). As a result of a new extension, we may also see another extension on the date as to which deals the termination rights could be afforded to. For now, by winning big in this lawsuit, WB and DC Comics must feel like a bullet just ricocheted off of their Kryptonian skin.

Adam is a JD Candidate at Osgoode Hall Law School

The post It’s a Bird, It’s a Plane, It’s a Lawsuit! – Termination Rights Denied to Siegel Estate for Superman appeared first on IPOsgoode.

Unfortunately for the estate of Toronto born Joe Shuster, it appears Superman’s kryptonite, at least in regards to termination rights under of the American , is subsequent agreements which have the effect of eliminating a termination right.

Superman’s journey from his 1930s birth to his modern inception is enough to fill a .  Of relevance to Superman’s 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 “exclusive right to the use of the [Superman] characters and story”. Once the copyright was assigned to DC Comics, Siegel and Shuster continued to work on Superman’s 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.

The above discussion brings us to our first copyright issue - a slight distinction of relevance to the case. At issue in DC Comics is the termination of copyright in the character  granted under the 1938 agreement (similar to  from 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 are owned by DC Comics under the work made for hire doctrine. Prior to the Copyright Act, 1976, it was generally understood that copyright would belong to the employer if the work was created at the employer’s “instance and expense”. Thus, Siegel and Shuster’s contribution post-licence, and any derivative additions to Superman, are not at issue in DC Comics since works created under work made for hire agreements cannot be terminated. What is at issue is the termination of the original Superman character’s copyright - not the totality of his modern appearance.

Under the Copyright Act, 1976, 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 “second bite of the apple” 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, termination rights may be claimed at the end of the 56th or 75th year from the date copyright was originally secured.  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.

In order to terminate under §304, notice must be filed within a five-year window and must meet the of the United States’ Copyright Office. Shuster’s estate does not encounter issues with meeting the time frame nor the requirements; the biggest stumbling block is a 1992 agreement between Shuster’s estate and DC Comics.  In 1992, Shuster’s 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’s debts in exchange to settle “all 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 […] in any and all work created in whole or in part by […] , Joseph Shuster, or any works based thereon.”

The 1992 agreement has surfaced as Superman’s (or at least Shuster’s estates) kryptonite. Despite the language of which states, “termination may be effected notwithstanding any agreement to the contrary”, American courts in the Ninth and Second circuit have interpreted §304(��)(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.

In , 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’s heirs, was upheld by the Ninth Circuit as not being an “agreement to the contrary” under §304(��)(5). The Milnes were denied their statutory termination right since they “were able to obtain considerably more money as a result of the bargaining power wielded by the author’s son”.

Following suit, the Second Circuit court in discussed a 1994 agreement by Elaine Steinbeck which re-licensed her late-husband John Steinbeck’s copyrighted literary works. Several of John Steinbeck’s works were governed by a 1938 agreement with Penguin Group. In 1994, Elaine Steinbeck, the owner of John’s copyrights, entered into a “new agreement for continued publication” with Penguin. The agreement included prior licensed works and additional literary works and “changed the economic terms of the 1938 agreement, mostly to Elaine Steinbeck’s benefit…”. Under the 1994 agreement, Penguin was required to provide larger annual guaranteed advanced and royalties. The language of the 1994 agreement stated it would “cancel and supersede the previous agreements”.

The court in Steinbeck held the 1994 agreement eliminated Elaine Steinbeck’s statutory termination right. In reaching their conclusion, the court emphasized Elaine Steinbeck’s substantial benefits under the new agreement. Since Steinbeck had the ability in 1994 to renegotiate the terms of her previous agreement “to her benefit…”, the court found that “by 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”.

Despite the above cases, illustrates subsequent agreements will not supersede previous agreements if the benefit to the authors or authors’ heirs is insubstantial. In Classic Media, 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’s notice of termination in 1996, and pointed to the 1978 subsequent agreement.  Here, the Ninth Circuit distinguished Steinbeck and Milne and held that the 1978 agreement did not eliminate Mewborn’s 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.

The above cases were cited in DC Comics, 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’s heirs is relevant in subsequent agreements. As Eriq Gardner of The Hollywood Reporter , Judge Wright’s reasoning in DC Comics is likely to “trigger an appeal”. Whether or not the substantiality of the benefit received by Shuster’s 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/Steinbeck and Mewborn, and the $25,000 per year and additional debt clearing provided by DC Comics lays somewhere in the middle… perhaps, in my opinion, leaning a bit closer to Milne/Steinbeck's substantiality.

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.

The post Superman’s (Termination) Kryptonite: Subsequent Agreements – Warner Bros and DC Comics win fight over Superman’s Copyright appeared first on IPOsgoode.