Plaintiffs, Marvel Worldwide, Inc., Marvel Characters, Inc., and MVL Rights, LLC, creators and publishers of comic books (collectively, Marvel), brought suit against defendants, the heirs of comic book legend Jack Kirby, seeking a declaration holding that 45 Termination Notices sent by the Kirby heirs to Marvel purporting to terminate Kirby’s alleged assignment of rights in a number of Marvel comic editions published between 1958 and 1963 (collectively, the Kirby Works) were a nullity. According to Marvel, it owned the copyrights in the works, as works made for hire, that were the subject of the Termination Notices, and neither Kirby nor his heirs held any rights in the works. The Kirby heirs counterclaimed for a declaration that the heirs now controlled the copyrights in these works and that the Termination Notices were effective. On cross-motions for summary judgment, the district court granted Marvel’s motion, finding that the Kirby Works were works made for hire within the meaning of the Copyright Act of 1909 and, as a result, Marvel owned the copyrights in the Kirby Works and the Termination Notices were ineffective. (Read our summary of the district court’s decision here.)
On appeal, the Ninth Circuit panel began by considering whether the district court had valid personal jurisdiction over defendants Lisa and Neal Kirby, California residents. The court concluded that the only acts that could potentially give rise to jurisdiction over Lisa and Neal—sending termination notices to Marvel in New York—were insufficient to support an exercise of personal jurisdiction under New York’s long-arm statute. Most important, noted the court, what the Kirby siblings sought to vindicate were purported termination rights under Section 304(c) of the federal copyright laws; they sought no privilege or benefit conferred by New York state law. Therefore, the court concluded that Lisa and Neal Kirby did not purposefully avail themselves of the benefits and protections of New York’s laws.
The court, however, rejected defendants’ contention that the absence of personal jurisdiction over Lisa and Neal required vacatur of the judgment as against the other Kirby siblings, Barbara and Susan. Although the district court had not had occasion to consider the joinder issue, the appeals court applied the governing standards of Rule 19(b) of the Federal Rules of Civil Procedure and concluded that Lisa and Neal were not indispensable parties. Because Lisa’s and Neal’s interests were identical to those of the remaining defendants and all siblings had the same lawyer, who would be “no less vigorous in his advocacy” given that he now represented two siblings instead of four, the court concluded that there was no practical prejudice to Lisa and Neal as a result of adjudicating the case in their absence.
After dispensing with the procedural issues in the case, the court turned to the merits of Marvel’s summary judgment motion. Section 304(c)(2)(B), stated the court, protects the property rights of widows and children of authors by granting them the power to undo earlier transfers of copyrights and to enjoy the remainder of the copyright term. The court noted, however, that termination rights under Section 304(c) do not exist with respect to “works made for hire.” Where a work is made for hire, copyright law deems the employer to be the author for purposes of copyright ownership.
To determine whether the drawings of Jack Kirby were works made for hire within the meaning of Section 304(c), the court applied case law interpreting that term as used under the 1909 Copyright Act, the law in effect when the works were created. Applying the “instance and expense” test, when an employer induces the creation of a work and has the right to direct and supervise the manner in which the work is carried out, the employer is presumed to be the author of the work. The independent contractor can overcome the presumption only by evidence of an agreement to the contrary.
In considering the instance requirement, the court acknowledged that, even if not exercised, the right to direct and supervise the manner in which the work is carried out is in some circumstances sufficient. For example, where the hiring party makes a particularly strong showing that the work was made at its expense, or where prior dealings between the parties on similar assignments, as part of an ongoing arrangement, have rendered fine-grained supervision unnecessary, the right to direct and supervise may be sufficient. With respect to the expense component, the court noted that the degree of resources the hiring party invests in the creation of the work is relevant but not dispositive. In some cases, payment of a sum certain suggests a work-for-hire arrangement, but where the creator of a work receives royalties as payment, the method of payment generally weighs against finding a work-for-hire relationship.
Applying these principles to the facts in the record, the court concluded that the works were created at Marvel’s instance and expense and that defendants had not adduced evidence of an agreement to the contrary contemporaneous with the creation of the works. Construing the evidence in favor of the defendants, the court found beyond dispute that although Jack Kirby was a freelancer, his working relationship with Marvel during the period in question was close and continuous. The court noted further that it was without question that Marvel published the great majority of Kirby’s work during these years – 1958 through 1963. Understood as products of this overarching relationship, the court reasoned, Kirby’s works during this period were not self-directed projects in which he hoped Marvel, as one of several potential publishers, might have an interest; rather Kirby created the relevant works pursuant to Marvel’s assignment or with Marvel specifically in mind. Finally, the court noted that Marvel had the power to reject Kirby’s pages and require him to redo them or alter them. Examining the dynamic of Kirby’s work for Marvel, the court concluded that the disputed works were created at Marvel’s instance.
The court acknowledged that whether the works were created at Marvel’s expense presented a more difficult question. Here, stated the court, Marvel paid Kirby a flat rate per page for the pages it accepted, paid Kirby no royalties, and did not pay for Kirby’s supplies or provide him with office space. However, Marvel was free to reject Kirby’s pages and pay him nothing for them. In the absence of any evidence that Kirby undertook to create the works independent of Marvel, the court held that Marvel’s payment of a flat rate and its contribution of both creative and production value, in light of the parties’ relationship as a whole, were enough to satisfy the expense requirement.
Having satisfied the instance and expense test, Marvel was entitled to a presumption that the works were made for hire. The court determined that defendants had not presented evidence of an agreement to the contrary that would overcome that presumption. The appeals court therefore affirmed the district court’s determination that the works were works made for hire and upheld the grant of summary judgment against defendants Barbara and Susan.