In my last post I described the right of present-day creators to terminate transfers and licenses of their original non-work-for-hire material. The decision to start with the present was deliberate. The Siegel case is not merely relevant for Golden Age transactions; it’s a powerful reminder for lawyers and creators on both sides of copyright agreements that the story doesn’t end with a signed contract.
To see why this matters, consider Steven Grant’s most recent CBR column, in which he observes that he has “never met anyone who has ever signed away their rights in or control over what turned out to be a popular party who wasn’t bitter about it in their 40s.” One apparent reason for this sense of hopelessness: the perception that termination rights apply only to older creators. “For those of us who came into the business after 1977,” Grant states, “the [Siegel] case really means nothing but satisfaction, since we operate under a different set of rules. . . . Youthful indiscretion — or any other kind — is no longer redeemable.” A powerful sentiment to be sure, but as we saw here the law today is actually more forgiving of forty-something creators than they might think.
With that in mind, let’s turn now to the Siegel case itself.
The relevant statute: As we noted yesterday, the pertinent section of the copyright law for the Siegel case is not Section 203, but 304. Both sections describe termination rights; the difference lies in when the transfer took place. For copyrighted property transferred before 1978, the law contains some provisions designed to accommodate the fact that the terms were negotiated under an earlier set of rules.
If the 1976 Copyright Act gave the Siegels a right to terminate the transfer, why didn’t they take advantage of it back then? Contrary to what some have inferred, there was no secret agreement to waive termination rights in the 1970s or ’80s ; pages 50-53 of the opinion implicitly dismiss that assertion. Rather, the reason for the delay lies in the termination procedure set forth in Section 304(c).
In a nutshell, this procedure was designed to accommodate the fact that under the 1909 Copyright Act, the outer limit of the length of copyright was fifty-six years. However, the 1976 Copyright Act extended the term of pre-1978 copyrighted material–the term is now set at a total of 95 years (Sec. 304(b)). Congress decided that it wouldn’t be fair to give the copyright holder an extra period of time to profit from the rights without allowing the original creator or his heirs a chance to take it back first. Accordingly, Section 304(c) gives the original creator and his heirs the right to terminate the transfer within a five year period from the end of fifty-six years, provide a termination notice is filed no less than two years before the specified effective date.
Given the publication of the Action Comics #1 in 1938, this meant that the end of the fifty-six year period was 1994. The Siegels filed the requisite termination notices on April 3 1997, each of which had an effective date of April 16, 1999. (20) The court ruling declared this termination to be valid, thereby awarding them 50% of the copyright interest (Siegel’s share) in the Superman material in Action Comics #1.
What about Joe Shuster? As the judge explains on p. 19, the 1976 Copyright Act originally provided that if a creator died without leaving any heirs, the termination right expired. However, the statute was recently amended (to give the creator’s estate a termination right after “75 years from the date copyright was originally secured.” (Sec. 304(d))
This is why the Shuster estate stands to regain the other fifty percent domestic U.S. interest in Superman in 2013. As you can see from this legal news report on DC’s General Counsel, Shuster’s nephew filed a termination notice in November 2003, within the 10 year filing window.
What about other characters and creators? More on that soon!
April 4th, 2008 at 7:31 pm
While I agree that the creators should have been paid much better than they were, I’m confused as to how an agreement between Siegel, Shuster, and DC where the creators sold their rights away can be undone. Because there have been several lawsuits against DC over the rights to Superman, how can they claim ownership when they sold the rights in the first place?
April 4th, 2008 at 7:55 pm
chris:
In a nutshell, this procedure was designed to accommodate the fact that under the 1909 Copyright Act, the outer limit of the length of copyright was fifty-six years. However, the 1976 Copyright Act extended the term of pre-1978 copyrighted material–the term is now set at a total of 95 years (Sec. 304(b)). Congress decided that it wouldn’t be fair to give the copyright holder an extra period of time to profit from the rights without allowing the original creator or his heirs a chance to take it back first. Accordingly, Section 304(c) gives the original creator and his heirs the right to terminate the transfer within a five year period from the end of fifty-six years, provide a termination notice is filed no less than two years before the specified effective date.
April 4th, 2008 at 8:03 pm
It’s a natural question. Reliance on contract is fundamental to a stable economy and the rule of law, yet here we are talking about the apparent nullification of a contract by a court.
Except there’s a slight but significant wrinkle.
When Siegel, Shuster and Detective Comics entered into their agreement, they did so within a framework of copyright law far different from what we have today. Instead of one long term, copyright lasted for a shorter term of 28 years that could be renewed once. Moreover, after the first term the creator(s) had the right, established by Congress in the copyright statute, to take the copyright back unless they sold that right away–which, long story short, it was determined they did.
This meant that when the price was set in the original contract, the parties knew that the work would go into the public domain after 56 years.
When Congress decided to lengthen the term of copyright, the question arose: who should benefit? The current copyright holder or creators? It resolved that issue in Section 304 by giving the creator(s) the right to take the copyright back.
For transfers after 1977, Congress decided to enact a rule that similarly reflected a belief that creators should not be disadvantaged if a property turned out to be worth more than the original negotiated value. That’s the 35 year termination rule in Section 203.
Whether or not Congress made the call in these rules is a matter of some debate, but that’s essentially what’s going on.
April 5th, 2008 at 1:48 pm
I am loving this series btw! I find all copyright law very interesting, especially when it ends with things being settled in the favor of the original creators.
I’d also like to see a series about comics in Public Domain. That really seems to becoming a hotbed of interest, doesn’t it?
- Jim
April 5th, 2008 at 8:31 pm
My main thought on this is: “Man, what a mess!” As I understand it though, the reason DC was able to successfully defend previous copyright cases was because they did own copyright. Their original purchase wasn’t so much invalidated as given a time-limit by the the changes in the law.
April 6th, 2008 at 3:31 am
So, Jeff…. Is this a good thing or bad thing for DC, in regards to them continuing to publish new Superman stories after 2013?
April 6th, 2008 at 2:40 pm
“Shuster’s nephew filed a termination notice in November 2003, within the 10 year filing window.”
Wow, so even the nephew has a chance at some money now?
After all is said and done I wonder if DC and Marvel might start worrying about what they think is “their” properties. Does Bob Kahne have relatives? Could Batman be next? Bill Finger’s relatives decide they are due some money? Does he have any? How many comic properites could now or in a few years be in doubt? Could Stan Lee after a decade or so try for Spider-man? What about Captain America he was from WWII. Could his creators file now? I ask these questions because I have no idea.
April 6th, 2008 at 10:41 pm
Rod, Every case is different. S&S brought Superman to DC and sold him. Stan Lee worked for Marvel at the time he created Spider-Man etc, so those are work for hire, and don’t apply to these situations.
there was a lawsuit regarding Captain America from the Simon estate. It has been’t talked about in a while, and might have been settled. But there was also much evidence that Cap had been created as work for hire, as well.
April 6th, 2008 at 11:02 pm
@Rod and Scavenger: Yep, Stan Lee’s case is different, thanks to the work for hire scenario.
Joe Simon’s Captain America case is in an upcoming post on broader implications for today. Before that, though, I want to say some more about what’s next for Superman.