SUPER HEROES and THE SUPREME COURT: Marvel Settlement Leaves Questions of Artists’ Rights Unanswered

BY KATHERINE BRENNAN — On September 26, 2014, the Estate of Jack Kirby and Marvel Characters, Inc. announced that the two parties had settled a longstanding legal dispute over Kirby’s rights to the characters that he created or co-created while working as a freelance artist for Marvel between 1958 and 1963. The parties announced the “11th hour deal” only three days before the United States Supreme Court was set to discuss the merits of the case at the Justices’ Conference. While this leaves Supreme Court enthusiasts out of luck when it comes to cases discussing super heroes, the settlement and underlying court opinions will undoubtedly leave a lasting impression on the entertainment industry.

At the start of this matter, the lawsuit seemed doomed to become only “a historical footnote.” However, the prominence of the case changed when the Supreme Court ordered Marvel to respond to the Kirby family’s petition for writ of certiorari. The lawsuit gained even more momentum when multiple entertainment labor guilds and the former director of the U.S. Patent and Trademark Office filed amicus briefs on behalf of the Kirby family. All briefs supported the Kirby estate’s objections to the lower court’s expansive work-for-hire reasoning and its interpretation of “employer,” which directly contradicted its “common law meaning, binding Supreme Court precedent, and longstanding canons of statutory construction.”

The legal battle between Kirby’s estate and Marvel began in 2009, when Kirby’s family filed 45 copyright termination notices against Marvel and its licensees for the copyrights of iconic superhero characters including Spiderman, Captain America, Thor, and the Incredible Hulk. Marvel countered that the termination notices were invalid because Kirby’s creations were governed by the 1976 Copyright Act and fell under the “work made for hire” exception to the termination of rights provision, which otherwise entitles artists and their heirs to regain copyrights transferred to third parties.

The U.S. District Court for the Southern District of New York agreed with Marvel, granting Marvel’s motion for summary judgment and the Court of Appeals for the Second Circuit affirmed. District Court Judge Colleen McMahon broadly applied an “instance-and-expense” test, finding that because Kirby’s works were created at the direction of Marvel and because Marvel compensated Kirby, Kirby’s estate was not entitled to termination rights under the 1976 Copyright Act’s “work-for-hire” exception. McMahon’s ruling heavily relied on the testimony of Kirby’s creative partner, Stan Lee, who stated that Kirby’s creative contributions were produced under the “Marvel Method,” wherein Lee would instruct Kirby of the premise and plot outlines, and Kirby would create pencil drawings accordingly.

Kirby’s estate responded with a brief arguing that Kirby was not a work-for-hire employee between 1958 and 1963. According to the brief, Marvel failed to contradict that Kirby was recognized solely as a commissioned, independent contractor during that time period, having never received an employment contract or a salary from Marvel. Additionally, Marvel’s compensatory checks to Kirby indicated that Marvel would only obtain the copyright to works by assignment, which means that the copyrights were transferred for only the works that Marvel chose to publish. Kirby’s estate argued that this manner of payment demonstrated that Kirby was an independent contractor between 1958 and 1963. According to the estate’s brief, this manner of payment was not unconventional, as only traditional employees could produce works-for-hire under the copyright laws during this time period.

The Copyright Act of 1976 was meant to level the playing field between artists and publishers. Prior to 1976, publishers often exploited artists, and the 1976 Copyright Act’s remedies, including the termination rights provision, were meant to combat this inequality. The district court’s retroactive application of the “instance-and-expense” test in favor of employers undermines the Copyright Act’s goal of artist-employer equality and exacerbates the general confusion of the application of copyright law. The holding calls into question all independent contractor agreements made under the previous 1909 Copyright Act and destabilizes long-held interpretations of how “employer” should be interpreted in such copyright disputes.

But, above all, if future courts choose to follow the Kirby ruling’s broad interpretation of “employer” and the work-for-hire doctrine, the termination rights provided for in the 1976 Copyright Act could become a hollow remedy to many artists and their heirs. The Kirby brief concludes that the lower court’s overly broad interpretation of the “instance-and-expense” test will subject artists’ rights to “revisionist history” and will unjustly deprive them of their property rights by creating an “almost irrebutable presumption that any person who paid another to create a copyrightable work was the statutory ‘author’ under the work-for-hire doctrine.” Assuming that someone paid these independent contractors during that time period, it seems that almost no one could benefit from the 1976 Copyright Act’s termination rights provision.

This could mean that any artist who has filed a termination notice, including Bob Dylan and Tom Petty, may never see their copyrights returned, even if they were working as independent contractors during that time period. Indeed, the Screen Actors Guild pointed out that 200 songs of Rolling Stone’s Top 500 Songs of All time were created prior to 1976. If the courts continue to apply the instance-and-expense test, then it could be nearly impossible for the songs’ creators to reclaim their copyrights.

Kirby died in 1994, never living to see the Marvel Renaissance that began a decade later. Had Kirby’s lawsuit been successful at the Supreme Court, his heirs likely would have received control over the characters, or at least a significant cut of the profits from any of the numerous forthcoming Avengers films. A ruling recognizing Kirby’s termination rights would also open the door to numerous other freelance artists, in the comic book industry as well as the music industry, who similarly lost out on profits garnered from their creativity and innovation because of the exploitive nature of the entertainment industry prior to 1976. “But hopefully the industry will never again burn someone the way it burned Jack Kirby.”

Leave a Reply

Your email address will not be published. Required fields are marked *