New Setback for Warner Bros. in 'Superman' Litigation

A judge has rejected Warner Bros.' attempts to pry open secret documents that purportedly show an agreement between the estates of Superman co-creators Joel Shuster and Jerry Siegel not to make further copyright deals with the studio. The documents are said to also contain a formula for how the two estates will share proceeds on Superman once they successfully terminate Warner's rights to the lucrative franchise.

The two estates has been fighting with Warner Bros. for more than a decade over Superman rights and profits, sending notices in the mail in 1999 that purported to exercise termination rights under the 1976 Copyright Act. The heirs filed suit in 2004 that sought a declaration that they had successfully terminated rights to the first Superman comic book published by Detective Comics in 1938, which contains much of the famous mythology of the Man of Steel. In 2008, on summary judgment, a judge granted that wish

Recently, Warner Bros. has been doing whatever it can to hold onto its stake in Superman.

Last year, the studio filed a lawsuit against the recently deceased Joanne Siegel and her lawyer, Marc Toberoff, for interfering with its rights via allegedly shady joint venture agreements. To that end, it has demanded production of sensitive documents.

The documents are said to be "consent agreements" between the Siegel and Shuster estates and their existence came to light during settlement discussions during the first phase of the Siegel trial. Once Toberoff mentioned the presence of these agreements, Warners almost immediately demanded the documents be shared. During the first trial, Toberoff successfully got a judge to agree that those documents were protected by attorney-client privilege.

After Warner Bros. went on the offensive last year, it again demanded access to the consent agreements. This time, with the help of new lawyer Daniel Petrocelli, it argued that the agreement itself was a violation of the Copyright Act and couldn't be insulated from discovery. Warners based the claim that the agreement was illegal on a Ninth Circuit decision (Milne v. Stephen Slesinger) that said that third parties who haven't yet attained copyright control in a work couldn't traffic in future interests.

The prior case, however, didn't address this particular situation, where the heirs of the original creators apparently agreed to negotiate together, and not grant future interests to anyone, including Warners.

Reviewing the situation, U.S. Magistrate Judge Ralph Zaresky won't settle the question of whether such an agreement does in fact violate copyright law, but says that Warners' assertion that it is illegal does not necessarily make it so. "Discoverability...cannot turn on whether Plaintiff ultimately proves to be right in its characterization," writes the judge in an opinion issued on Monday.

The shielded document may contain clues about the future of Superman. By 2013, Warner is set to lose certain rights to the character to both the Siegel and Shuster estates. In the meantime, Warner Bros.’ big-budget reboot Superman: Man of Steel is currently in advanced development and the issue of who will own what is also at the doorstep of the Ninth Circuit Court of Appeals.