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Siegel, et al. v. Warner Bros. Entertainment Inc., et al.

In a 72-page opinion, the district court granted in part the plaintiffs’ motion for summary judgment on their claim that in 1999 they successfully terminated their share of the grant of copyright for the Superman character made by creators Jerome Siegel and Joseph Shuster in 1938. The court also held that the termination applied only to the domestic copyright owned by DC Comics and not to any rights DC Comics might have in the Superman character in other countries.

At the center of the case were a 1938 agreement in which Siegel and Shuster sold the copyright for Superman for $130, a series of subsequent agreements, payments, litigation, and settlement negotiations, and efforts by Jerome Siegel’s heirs to terminate the original 1938 grant under §304(c) of the 1976 Copyright Act.

Regarding the plaintiffs’ efforts to provide notice of termination, the court held that the effective date of the plaintiffs’ termination notice was April 16, 1999. Pursuant to the statutory timeframe contained in section 304(c), the court counted back from that date 61 years and confirmed that any statutory copyright that had been secured in any Superman material prior to April 16, 1938, would be outside the scope of the termination notices and that defendants’ copyright ownership of that material would remain unaffected. The court confirmed that the dates on the notice are precisely enforced, and that the termination periods are calculated from the exact date of publication, rather than from the end of the publication year, as is appropriate for determining copyright terms under the 1976 Act.

At issue were two single-page “promotional announcements” that appeared in two comics, Detective Comics and More Fun Comics, allegedly published prior to the comic in which Superman was first presented, Action Comics, Vol. 1. The promotional announcements consisted of a black-and-white copy of the front cover of the Action Comics depicting Superman lifting a car.

The defendants relied upon the dates of publication contained in the initial term copyright registrations for each of the two prior comics, placing the promotional announcements outside the scope of the plaintiffs’ termination notice. The court rejected the plaintiffs’ argument that, at least with respect to one of the comics, the usual prima facie presumption of the facts stated in the registration certificate should not apply because the registration was not applied for until 28 years after publication. The court held that the statute did not provide for any such limitation on the presumption, nor did any case law.

The plaintiffs also tried to rebut the evidentiary presumption of the accuracy of the date of publication by presenting the testimony of an expert in the comics industry, who had previously been hired by DC Comics to help them establish publication dates for copyright registration certificates. The expert testified that the dates in the copyright applications were usually “mere guesstimates.” The court considered the testimony insufficient because it did not provide any evidence that the publication date in the specific registrations at hand were not accurate.

The court held that the front cover of Action Comics, Volume 1 was first published prior to April 16, 1938, and, therefore, that whatever copyrightable material was included in that cover remained unaffected by the termination. The court reviewed the cover in the promotional announcement and concluded that the defendants can continue to exploit “the image of a person with extraordinary strength who wears a black-and-white leotard and cape.”

The defendants had claimed that portions of Action Comics, Volume 1 were a work made for hire for Detective Comics and thus were not subject to termination. The court, however, held that the defendants were collaterally estopped from making such arguments by virtue of their prior litigation with Siegel and Shuster and the final judgment entered by the Second Circuit in 1974.

The court also rejected the defendants’ attack on the termination notices for failing to specifically reference a 1948 Consent Judgment resulting from another prior litigation between the parties. The court noted that only “grants of rights” needed to be referenced in the termination notice, and the Consent Judgment did not effectuate any “grant” of any rights: it was merely a repetition and confirmation of a prior stipulated agreement of settlement in that action – which was identified in the termination notices. In any event, the court held that in light of the fact that the stipulation was identified, the failure to identify the consent judgment was a “harmless error” – which will not affect the adequacy of the information in a termination notice.

The court rejected the defendants’ statute of limitations defense. The court held that the defendants’ letter to the plaintiffs challenging the scope of the rights that could be recaptured by the termination notices was not a “plain and express repudiation of co-ownership,” required for approval of the limitations period, because the letter did not challenge the validity or enforceability of the notices. The court also rejected the defendants’ argument that a written settlement outline constituted a final settlement agreement binding upon the plaintiffs.

Having concluded that the plaintiffs effectively terminated Jerome Sigel’s grant of copyright contained in Action Comics, Volume 1, the court went on to address the limitations and scope of the termination right. First, the court held that the plaintiffs did not recapture any right to foreign profits arising by virtue of exploitation of any Superman work outside the United States. The court held that the termination statute itself, Section 304 (c)(6)(E), expressly states that the termination “in no way affects the rights arising under any other Federal, State, or foreign laws.” The court concluded that the termination notice affects only the domestic portion of Siegel’s and Schuster’s 1938 worldwide grant (“all rights”) to Detective Comics of the copyright in the Superman material contained in Action Comics, Volume 1. The termination notice is not effective as to the remainder of the grant, that is, the defendants’ exploitation of the work abroad under the aegis of foreign copyright laws. Thus, although the defendants retained the unfettered right to exploit the work (and retained the profits derived therefrom) in foreign nations, they may do so domestically only as a co-owner (through Shuster’s share) of the works.

The court held, and the parties essentially conceded, that the plaintiffs were not entitled to any of the profits the defendants obtained through the use of Superman trademarks that are purely attributable to those trademark rights, and, pursuant to the derivative work exception in the statute, the plaintiffs are not entitled to any profits derived from the post-termination use of pre-termination derivative works.