IP Law Daily, COPYRIGHT—CDCal: Agreement Transferring Superman Rights to DC Comics Encompassed Rights to Superboy and Disputed Superman Ads, (Apr 19, 2013)

By Thomas Long, J.D.

A 2001 agreement between DC Comics and the attorney representing the estate of Superman co-creator Jerome Siegel, which settled claims between those parties regarding the rights to the Superman intellectual property, encompassed the Superboy character, as well as various advertisements featuring Superman, the federal district court in Los Angeles has determined (Larson v. Warner Bros. Entertainment Inc., April 18, 2013, Wright, O.). Siegel’s estate, therefore, could not terminate the transfer of rights with regard to those works.

On March 1, 1938, writer Jerome Siegel and artist Joe Shuster signed an agreement selling Superman to DC Comics for $130. DC intended to publish Superman in the first issue of Action Comics, which it promoted in advance in black-and-white advertisements in other magazines. In 1938, after the debut of Superman, Siegel pitched the idea to DC of creating a comic about the exploits of Superman as a young man. DC declined to publish the proposed Superboy comic, but in 1943, DC published a five-page “Superboy” strip without Siegel’s consent and without giving him notice. Litigation ensued, and the parties continued to dispute the ownership, publication, and copyrightability of the Superboy character.

In 1997, Siegel’s widow Joanne Siegel (since deceased) and his daughter, Laura Siegel Larson, sought to terminate the transfer of copyright to DC Comics and reclaim title to the early Superman works, pursuant to a provision in 1976 Copyright Act giving authors and certain heirs the right to recapture their original copyrights 56 years from the date they first signed them over. The dispute spawned a number of lawsuits.

Negotiations between the Siegels and DC culminated in an October 19, 2001 letter from Siegel’s estate’s attorney, which had been held by the Ninth Circuit to be a binding agreement between the parties. The 2001 agreement purported to cover Superboy and the Superman ads.

Efforts to reduce the 2001 agreement to a long-form contract broke down. The Siegels repudiated the agreement and served an additional notice of termination in 2002 purporting to recover the Superboy works. The Siegels later served a notice of termination in 2012 regarding the ads. The parties now dispute the effect of the 2001 agreement on the Superboy character and the Superman ad works.

According to the court, the course of litigation indicated that the Superboy character rights and the Superman ads were likely not properly terminated by the 1997 notice of termination, even though those works were listed in the notice. The court assumed without deciding that absent the 2001 agreement, the Siegels would have properly terminated Superboy through their 2002 notice of termination and the ads through their 2012 notice of termination. Under this presumption, the Siegels would have settled away their termination rights to Superboy and the ads by way of the 2001 settlement agreement.

The 2001 settlement agreement was not a “termination to the contrary” to the Siegels’ termination rights, which would have been invalid under the Copyright Term Extension Act of 1998 (CTEA), the court said. The CTEA, in order to protect authors and their heirs from unremunerative transfers, disallowed authors and their heirs from entering into agreements that were “to the contrary” to their future termination rights. The Siegels freely and intelligently entered into the 2001 agreement as a result of their 1997 attempt to terminate the Superboy and ad works. In 2001, the Siegels knew that the CTEA had been effective for more than two years and they were in a good bargaining position to negotiate a settlement of the dispute stemming from their 1997 termination notice, the court said.

The Siegels must have been aware of the import of the 2001 agreement because they had already served a termination notice purporting to recapture the rights to the entire universe of Superman works, the court reasoned. They had used that termination as leverage to obtain considerably more money in the subsequent deal. Clearly, the court said, the 2001 agreement was not contrary to the Siegels’ termination rights; it was consistent with and fully honored their right of termination, which they undoubtedly intended to exercise as to the Superboy and Superman ad works by the 1997 termination. The 2001 settlement could not be an invalid “agreement to the contrary” simply because it had the effect of eliminating certain termination rights that the Siegels believed they had already exercised, the court determined.

Therefore, the court held that the 2001 settlement agreement between DC and the Siegels re-granted the Siegels’ Superman, Superboy, and Superman ad works to DC in return for substantial advances and royalties. Because the agreement leveraged the Siegels’ all-encompassing 1997 termination notice to extract a highly remunerative new grant of the same rights, it effectively followed the statutory formalities and thus did not constitute an “agreement to the contrary” under 17 U.S.C. §303(c)(5).

The October 19, 2001 agreement remained binding and enforceable, and the agreement encompassed all the works subject to the related Superman and Superboy actions between the parties. According to the court, “this litigation of superhero proportions now draws to a close.”

The case is No. 2:04-cv-08776-ODW(RZx).

Attorneys: Jeffrey Bruce Linden (Marc Toberoff Law Offices) for Laura Siegel Larson. Daniel M Petrocelli (O’Melveny and Myers LLP) for Time Warner Inc.

Companies: Warner Bros. Entertainment Inc.; DC Comics; Time Warner Inc.; Warner Communications Inc.; Warner Bros. Television Production Inc.

Cases: Copyright CaliforniaNews