March 26, 2012 5:13pm PT by Eriq Gardner
Superman's WB Future at Stake as Appeals Court Battle Begins
On Friday, Warner Bros. made its move to hold onto all its rights on the Superman franchise. The studio filed a brief before the 9th Circuit Court of Appeals explaining why the estate of co-creator Jerry Siegel shouldn't be allowed to execute a copyright termination notice on the property.
The subject of Superman rights has been intensely litigated over the past five years. In 2008, a federal judge in California handed Siegel's heirs a big victory by determining that the termination was valid, but not a complete victory as it only applied to the first editions of the Action Comics that first told Superman's story. The later works were deemed to be "work for hire."
This meant a potential split in the Superman universe. Siegel (and his co-author Joe Shuster) would reclaim many of Superman's defining characteristics, including his costume, Clark Kent and the origin story. But Warner (as successor to DC Comics) would retain other elements, including Lex Luthor and Kryptonite.
The Siegel estate appealed, allowing both parties to resubmit their big arguments to a higher authority.
On Friday, Warners took its turn by telling the court in a cross-appeal what happened after the Siegel estate sent its termination notice on Superman. According to the studio, the two sides had come to an agreement on "every essential term for a re-grant of rights" when in 2001, the estate was approached by an "intellectual property entrepreneur" -- attorney Marc Toberoff -- who dangled the prospect of more money. The Siegels fired their law firm at the time, hiring Toberoff, and allegedly contracting agent Ari Emanuel to sell Superman rights.
But Warners believes that when the Siegel family walked away from the negotiating table in 2001, a meeting of the minds had already taken place. "The family asserted there was no deal without a long form [contract], and the district court agreed, casting aside established California contract law principles—principles essential to the entertainment industry, where many business deals are never formalized," says the studio in its brief. "The rule there is simple, however: a deal is a deal, long form or not."
Warners asks that the 9th Circuit bring this long-running dispute to an end by enforcing the alleged 2001 deal.
The latest filing comes three months after Toberoff submitted his own brief before the 9th Circuit.
In its own brief, the Siegel estate asked the justices to determine that the lower court judge had erred by not allowing for the recapture of rights in later Superman comics.
According to the appellant, Siegel and Shuster created later comic books in the Superman series "on spec," at their own expense, without any commitment or engagement by DC. The co-creators are said to have sold rights to the work for $10/page, under the same terms of the initial comic.
The estate believes that this work can't be deemed as a "work for hire" because the Warner subsidiaries can't meet the burdens of the "instance and expense" test, which has previously been defined as a determination that “the motivating factor in producing the work was the employer who induced the creation” and the employer had the right to “direct and supervise the manner in which the writer performs his work."
Instead, Siegel and Shuster purportedly wrote the Superman stories before any relationship with the comic book publisher, and after their deal, were "entitled solely to a contingent profit participation while shouldering the entire cost and financial risk of the strips' creation."
In sum, the Siegel family wants the 9th Circuit to uphold the essence of the Copyright Act's termination provisions -- allowing authors' heirs to enjoy the fruits of a longer copyright term.
Much of Warners' own appellate brief is focused on the question of the 2001 negotiations, but the studio does respond to the Siegels' attempts to expand the scope of its recaptured rights. Warners says that the appellant is misapplying the instance-and-expense test and gives an alternative story about what happened in the 1930s/1940s when the first Superman comics were created.
"All of the foregoing works were both created and published after Siegel and Shuster entered into two relevant agreements with DC," says Warners. "Under those agreements, DC possessed complete control over creation of new Superman stories and elements. Nothing could be done without DC’s consent. DC warned Siegel and Shuster that DC would 'not tolerate or accept slipshod work,' and that if their new Superman stories and artwork did not 'show a marked improvement,' DC would 'make other arrangements to have it done.'
In telling what happened some 70 years ago, Warners cites publisher-demanded rewrites and the "major financial investment" in commissioning new Superman material. The studio also points out that Detective Comics only took on the "tremendous gamble" of Superman after other publishers had passed. In sum, Warners is presenting the picture of a family which is repudiating both the 2001 deal as well as the original agreements made in the 1930s.
The coming decision by the 9th Circuit will help shape the future of the Superman franchise. Warners currently has a new film reboot, Man of Steel, in development as the families are set to fly with whatever they can regain from the Superman mythology.