Copyright lawsuits by Superman's creators

In 1938, Jerry Siegel and Joe Shuster gave away the copyright to Superman to Detective Comics, Inc., the predecessor of DC Comics. In 1948, National Comics (another predecessor) settled ownership and royalties disputes and paid $94,013.16 for Superman and Superboy rights. In 1969, a court ruled that Siegel and Shuster's grant of copyright included their renewal rights. Shuster died in 1992 and his heirs re-granted their rights for a $25,000 annual stipend. In 2001, the Siegel heirs took back their rights using the termination provision of the Copyright Act of 1976 and accepted a new purchase offer from Warner.

Later in 2001, the heirs tried to reclaim their rights after Marc Toberoff made a better offer. The Central District court of California ruled in 2008 that the Siegel heirs can cancel the Warner purchase, but this was overturned in 2012 on appeal to the 9th circuit. Thus, DC Comics currently holds the copyright to Superman.

Background

DC Comics corporate history

National Allied Publications was founded in 1934 by Malcolm Wheeler-Nicholson. Due to financial difficulties, Wheeler-Nicholson formed a corporation with Harry Donenfeld and Jack Liebowitz called Detective Comics, Inc. In January 1938, Wheeler-Nicholson sold his stake in National Allied Publications and Detective Comics to Donenfeld and Liebowitz as part of a bankruptcy settlement. On September 30, 1946, these two companies merged to become National Comics Publications. On June 29, 1961, the company became known as National Periodical Publications. In 1967 National Periodical Publications was purchased by Kinney National Company, which later purchased Warner Bros.-Seven Arts and became Warner Communications. In 1976, National Periodical Publications changed its name to DC Comics. Since 1940, the publisher had placed a logo with the initials "DC" (as in "Detective Comics") on all its magazine covers, and consequently "DC Comics" became an informal name for the publisher.

Estate of Jerome Siegel

Jerry Siegel, writer

• Jerome Siegel (Oct 17, 1914 – Jan 28, 1996) — Writer, co-creator of Superman
• Michael Siegel (Jan 27, 1944 – Jan 17, 2006) — Son of Jerome and Bella Siegel (Jerome's first wife, m. 1939 and div. Oct 1948). Not to be confused with the father of Jerome, also named Michael.
• Joanne Siegel (Dec 1, 1917 – Feb 12, 2011) — Jerome's second wife (m. Oct 13, 1948).
• Laura Siegel Larson (born Mar 1, 1951) — Daughter of Jerome and Joanne Siegel.

Estate of Joseph Shuster

Joe Shuster, illustrator

• Joseph Shuster (July 10, 1914 – July 30, 1992) — Illustrator, co-creator of Superman.
• Jean Adele Peavy (born Feb 1, 1921) — Sister of Joseph Shuster, mother of Mark Warren Peary and Dawn Peavy.
• Mark Warren Peary (born Jan 14, 1962) — Nephew of Joseph Shuster, son of Jean Peavy. He changed his surname from "Peavy" to "Peary".
• Dawn Peavy — Niece of Joseph Shuster, daughter of Jean Peavy.
• Frank Shuster (April 29, 1918 – Nov 7, 1996) — Brother of Joseph Shuster. Not to be confused with Frank Shuster (died 2002), cousin to Joseph Shuster and professional comedian.

Siegel and Shuster's employment at DC Comics (1935–1947)

In 1933, writer Jerry Siegel and artist Joe Shuster conceived the fictional comic strip character Superman. For the next five years, they tried selling Superman to various newspaper syndicates, with no success.

In 1935, Siegel and Shuster began working for New York comic magazine publisher National Allied Publications, producing detective and adventure stories. They refused, however, to sell Superman, their prize creation, to National Allied because it was a poorly-managed business.

On December 4, 1937, Siegel and Shuster signed an employment contract with Detective Comics, Inc. (an affiliate of National Allied Publications) that gave Detective Comics, Inc. the right of first refusal over any comic material they produced for the next two years, and stipulated a pay rate of $10 per page.

In January 1938, Detective Comics, Inc. offered to publish Superman. Siegel and Shuster by now had given up on the newspapers and agreed to sell Superman to Detective Comics, Inc. They produced 13 pages of comic stories, which they submitted to Detective Comics, Inc. in late February. In March, they signed a contract in which they released the copyright for Superman to Detective Comics, Inc. The contract for the sale, signed in March 1938, read:

Superman was published on April 18, 1938, in Action Comics #1, and was an immediate and great success. Siegel and Shuster now regretted selling the copyright for so little. Nevertheless, DC Comics retained Siegel and Shuster because they were popular with the readers. From 1938 to 1947 they were together paid over $400,000 (AFI $Template:Sigfig).

On September 22, 1938, Siegel and Shuster signed a 10-year contract with Detective Comics wherein they agreed to give Detective right of first refusal with a duration of six weeks over any comics stories they created for the next five years.

On December 19, 1939, Siegel and Shuster signed a contract which increased their pay rate to $20 per page and promised them 5% of net proceeds from any commercial exploitation of Superman beyond magazines, books, and newspapers.

In November 1938, Siegel proposed to Detective Comics that he do stories of Superman's childhood adventures, with the character calling himself "Superboy". Detective rejected Siegel's pitch. In December 1940, Siegel pitched the idea again with a complete script for the first story, but Detective did not respond within the contractual six weeks.

Siegel served in the US Army from June 1943 to January 1946, and spent most of his service in Hawaii. During this time, his work was taken over by ghostwriters, but Siegel was still paid for each strip. Shuster was also paid for work done by ghost-artists.

In 1944, while Siegel was serving in Hawaii, Detective Comics published a Superboy story in More Fun Comics #101. The story was partially based on the script Siegel had submitted in 1940, and was illustrated by Shuster. Detective had done this without informing Siegel; he learned about it in a letter from Shuster.

1947–1948: Siegel and Shuster sue for ownership of Superman and Superboy

In 1947, Siegel and Shuster sued National Comics Publications for the rights to both Superman and Superboy and a "just share" of all profits that National and its partners made off the character. The suit was filed with the Supreme Court of the State of New York, in Westchester County. The case was presided over by Judge J. Addison Young.

Regarding the ownership of Superman

Siegel and Shuster argued that the March 1, 1938 contract in which they sold Superman to Detective Comics, Inc. should be voided because it lacked sufficient consideration for Siegel and Shuster. Judge Young ruled that the $130 mentioned in the contract was not payment for the copyright to Superman but their wages for the thirteen pages of Superman stories they made for Action Comics #1. Young referred to their December 4, 1937 employment contract, which gave Detective Comics, Inc. the right of first refusal over any comic magazine material Siegel and Shuster produced, and which stipulated a pay rate of $10 per page. The $130 mentioned in the March 1, 1938 contract was therefore a superfluous assessment of their wages which were already owed, and not payment for the copyright to Superman.

Judge Young concluded that the consideration that Siegel and Shuster had effectively bargained for was simply to see Superman published.

Siegel and Shuster also argued that the March 1938 contract lacked mutuality, saying that at the time Superman was an idea not fully developed and thus there was no clear concept on what was being sold. Judge Young disagreed, and concluded that the strips that appeared in Action Comics #1 were based on a fully developed concept that Siegel and Shuster submitted before March 1938, and this is what Detective Comics, Inc. had purchased in the contract.

On April 12, 1948, Young declared that Superman belonged to National.

Regarding the ownership of Superboy

National argued that Superboy was a work made for hire, but Judge Young rejected this argument because Detective Comics, Inc., on both occasions Siegel proposed his idea, had not indicated within six weeks of submission that it wished to publish Superboy, thereby effectively refusing it under the terms of their September 1938 contract.

National argued that Superboy was a derivative work of Superman, but Young ruled that Superboy was a separate entity.

On April 12, 1948, Young ruled that Siegel was "the originator and the sole owner" of Superboy, and ordered National to account for the proceeds it made of Superboy and to cease publishing Superboy stories.

Regarding unpaid royalties

Siegel and Shuster argued that National had cheated them of their royalties from the radio adaptation of Superman and merchandising. Their December 1939 contract entitled them to 5% of the net proceeds from all commercial exploitation of Superman beyond books, magazines, and newspapers. They argued that National had understated the proceeds and did not allow Siegel and Shuster access to the accounting records. Judge Young agreed that there were irregularities and decided an official accounting of all proceeds made from Superman was appropriate.

Conclusion

Judge Young concluded, in April 1948, that National owned Superman but Siegel owned Superboy. He ordered National to account before the court all proceeds made from Superman and Superboy.

The parties instead chose to settle out-of-court. National paid Siegel and Shuster $94,013.16 ($Template:Inflation when adjusted for inflation) for the rights to both Superman and Superboy. On May 21, 1948, Young entered a final judgment which vacated his April judgment, and ruled that the copyrights to Superman and Superboy belonged to National Comics Publications, Inc.:

1965–1974: Copyright-renewal applications and lawsuit

Under the Copyright Act of 1909, a copyright lasted 28 years. Near the end of this term, the original owners of the copyright could apply to have the copyright renewed for another 28 years, in which case the copyright would revert back to them. In April 1965, Siegel and Shuster applied to renew the copyright of Superman, and that June, National Periodical Publications filed its own renewal application. National kept publishing Superman stories and licensing Superman merchandise after April 18, 1966, the date the initial 28-year term ended.

In 1969, Siegel and Shuster sued National Periodical Publications in United States District Court for the Southern District of New York over ownership of Superman.

The court found that in the 1947 final consent judgment, Siegel and Shuster had transferred "all their rights" to the Superman character to National, including the renewal term. This decision was based on the legal precedent set by Fred Fisher Music Co. v. M. Witmark & Sons, in which the US Supreme Court ruled that an author could in writing convey his renewal rights in advance of their vesting.

The court also ruled that Superman was a work made for hire, despite the fact that Siegel and Shuster had been developing the character long before they began employment at National. The court argued that Detective Comics had rejected Siegel and Shuster's earlier prototype of Superman and that the revised version that appeared in Action Comics #1 was made under the supervision of Detective Comics.

Siegel and Shuster appeal to the Second Circuit

Siegel and Shuster appealed to the United States Court of Appeals for the Second Circuit.

The appeals court disagreed with the lower court's decision that Superman was a work made for hire.

Nevertheless, they agreed that Siegel and Shuster had indeed transferred their renewal rights and thus were not entitled to the copyright for Superman.

1975: Public relations campaign for comics creators

In 1975, Warner Bros. announced the production of a Superman film to be directed by Richard Donner. Siegel publicly condemned the project and drew attention to his poverty and the apathy of DC Comics. He found sympathizers such as Neal Adams and Jerry Robinson, who waged a public relations campaign for better treatment of comic creators in general. In order to avoid bad press, Warner Bros. agreed to give Siegel and Shuster a yearly stipend, medical benefits, and credit their names in all future Superman stories, in exchange for no longer contesting ownership of Superman. The stipend was initially $20,000 but rose over the years.

1992: Shuster dies

Shuster died on July 30, 1992, and he willed control of his estate to his sister, Jean Shuster Peavy. On October 2, 1992, Jean Peavy and Frank Shuster (Joe Shuster's brother) signed an agreement with DC Comics wherein they re-granted DC all of Joe Shuster's rights in exchange for a $25,000 annual stipend. The agreement read:

In a 2010 lawsuit (see below), DC Comics claimed it and its affiliates had paid Shuster's heirs "close to $500,000" under this agreement.

1996: Siegel dies

Jerry Siegel, his wife Joanne, and daughter Laura (1976)

When Siegel died on January 28, 1996, his estate passed to his widow Joanne Siegel, son Michael Siegel, and daughter Laura Siegel Larson, who held respectively 25%, 12.5%, and 12.5% of the interest in Superman.

The Copyright Act of 1976 contained a provision which allowed for a creator to terminate their grant of the copyright to their work 56 years after the date the copyright was first secured. The creator would then have a five-year window to do so. The creator, however, would have to serve a notice of termination in advance of the effective date; between two and ten years in advance. Action Comics #1 was published on April 18, 1938. Consequently, Superman's copyright would become eligible for termination beginning April 18, 1994 and ending April 18, 1999, and the termination notices had to be served between April 18, 1984, and April 18, 1997. Likewise, Superboy's copyright became eligible for termination between December 2000 and December 2005, and the notices had to be served sometime between and December 1990 and December 2003.

Siegel never applied for termination, but his heirs did after his death. On April 3, 1997, Joanne Siegel and Laura Siegel Larson served DC Comics a termination notice for Superman which became effective on April 16, 1999. The Siegel heirs now owned 50% of Superman, the other half remaining with DC Comics.

Warner Bros. attempted to negotiate an agreement with Siegel's heirs in order to retain Siegel's half of the rights to Superman. On October 16, 2001, Warner made an offer. Warner offered a payment of $3 million, an annual stipend of $500,000, a 6% royalty of Superman and a 1% royalty of his publications, and full medical benefits. Warner also agreed to insert the line "By Special Arrangement with the Jerry Siegel Family" in all future Superman productions. The Siegel heirs accepted this offer in an October 19 letter released by their lawyer, Kevin Marks.

Marc Toberoff's offer to the Siegel and Shuster heirs

In 2001, Jean Peavy's son and Joe Shuster's nephew, Mark Warren Peary, contacted attorney and movie producer Marc Toberoff. On November 23, Peavy and Peary entered into a joint venture with Toberoff's production firm, Pacific Pictures. Toberoff then contacted the Siegel heirs, first through a phone call to their lawyer, Kevin Marks, on November 29, 2001. In negotiations the following year, Toberoff and his colleague Ari Emanuel offered the Siegel heirs $15 million for their half of rights to Superman. Toberoff's plan was to eventually produce a Superman movie after securing the rights to Superman from Siegel and Shuster's heirs.

On September 21, 2002, the Siegel heirs fired Marks and later replaced him with Toberoff. On September 30, the Siegel heirs sent a letter to DC Comics stating that the negotiations were over.

On November 8, 2002, Siegel's heirs filed termination notices for the Superboy character and claimed full ownership of the character. This termination would have taken effect on November 17, 2004. On August 27, 2004, DC Comics denied the notices. The Siegels then took DC Comics to court.

Under the terms of the Copyright Act of 1976 in its original form, only the spouse, children, or grandchildren of a dead author could terminate a grant of copyright. This had prevented Shuster's sister and nephew from terminating Shuster's grant of his half of the copyright to Superman in the years following his death. In 1998, the Sonny Bono Copyright Term Extension Act modified the law to allow executors of estates to terminate. Under the original law, the window to serve the termination notice had ended in 1997, but the Sonny Bono Act also added a new subsection allowing the Shuster heirs to terminate 75 to 80 years after the copyright was first secured (with the usual two- to ten-year advance notice). The Shuster heirs could terminate their grant between 2013 and 2018, and the termination notice would have to be served between 2003 and 2016. On November 7, 2003, Peary served DC Comics with a notice of termination of Shuster's grant of the rights to Superman. He assigned Shuster's half of the rights to Superman to Pacific Pictures.

2004–2016: Siegel's heirs sue

On October 8, 2004, Siegel's heirs filed suit in the United States District Court for the Central District of California to assert their claim they owned 50% of the copyright of Superman (the other half being Shuster's). On October 22, 2004, Siegel heirs filed another lawsuit in the same court over the rights to Superboy. They claimed 100% ownership of the Superboy character, as it was solely the creation of Siegel. Marc Toberoff represented the Siegels in both cases.

The cases were assigned to Judge Ronald S.W. Lew on September 21, 2005. The following year, Lew took senior status and the cases were eventually reassigned to Judge Stephen G. Larson on October 30, 2006. In November 2009, Larson recused himself and the cases were reassigned to Judge Otis D. Wright II.

Joanne Siegel died on February 12, 2011, before the cases were resolved. Her daughter, Laura Siegel Larson, took over the cases and became executor of the Siegel estate.

Regarding Superman

DC Comics argued that the October 19, 2001 letter from the Siegels constituted a binding acceptance of DC's offer for the rights to Superman. However, Judge Larson found that the parties kept changing the terms of the agreement in subsequent correspondence, and thus never came to a stable agreement that the courts could enforce.

Larson ruled that the Siegel heirs had regained half of the rights to Action Comics #1.

In an August 12, 2009 supplement, Larson further elaborated his ruling.

Regarding Superboy

DC Comics argued that Superboy was a work made for hire and thus DC owned the character from conception; that Superboy was a derivative work of Superman and thus Siegel had no right to it because DC owned Superman; and that Superboy was a joint work between Siegel and Shuster and thus Siegel's heirs lacked the majority interest required to terminate.

On March 23, 2006, Judge Lew concluded that, in the 1947-48 lawsuit (see above), Judge Young already addressed and rejected these arguments and that res judicata and collateral estoppel precluded re-litigation. Lew ruled that the Siegel heirs had effectively terminated Siegel's grant of the rights to Superboy. He also ruled that the protagonist of the television show Smallville was Superboy.

After Judge Larson took over the case in October 2006, DC Comics moved for reconsideration of Lew's decision, and on July 27, 2007, Larson vacated Lew's ruling regarding the terminations of DC's Superboy right.

DC Comics appeals to the Ninth Circuit

DC Comics appealed to the United States Court of Appeals for the Ninth Circuit. Arguments were held on November 5, 2012.

The court reversed the District Court's grant of summary judgment, ruling that the October 19, 2001 letter from the Siegels (see above) constituted a legally binding acceptance of the October 16 oral agreement with DC Comics. The court ruled that, even though the agreement had not been finalized, the terms were "sufficiently definite that a court could enforce them". In a January 2013 memorandum, the presiding judges wrote:

The appeals court remanded the case back to the District Court. In an April 18, 2013 judgment, Judge Wright denied all of the Siegel heirs' claims and ruled that the October 19, 2001 letter irrevocably gave DC Comics the rights to Superman and Superboy.

Larson appeals to the Ninth Circuit

Laura Siegel Larson appealed Wright's April 2013 judgment to the Ninth Circuit.

Larson argued that the October 2001 letter did not transfer the rights to Superboy because at the time of its writing the Siegel heirs had not yet terminated DC Comics' rights to Superboy. The appeals court rejected this argument.

Larson claimed that her mother Joanne had rescinded the October 2001 letter and that DC Comics agreed to her decision. This was the first time that Larson raised this argument, and the appeals court refused to consider it because doing so would prejudice DC by forcing them to rework their defense from scratch.

Effects of these cases

The television show Legion of Super Heroes, which aired from 2006 to 2008, was originally meant to be titled Superboy and the Legion of Superheroes, but because this ongoing lawsuit left the ownership of Superboy in doubt, Warner Bros. Animation changed the title and replaced the character of Superboy with Superman (although he remained a teenager).

2010–2013: DC sues the Shuster heirs

In 2010, DC Comics sued Toberoff, Joanne Siegel, Laura Siegel Larson, and Mark Warren Peary. Jean Peavy, incapacitated by a stroke in 2009, was not listed as a defendant in this case. Her son, Mark Warren Peary, was substitute executor for the Shuster estate. DC asked the court to invalidate and void the Shusters' termination notice and the agreements between Toberoff's firms and the heirs of Siegel and Shuster.

The lawsuit was filed with the United States District Court for the Central District of California, and the case assigned to Judge Otis D. Wright II.

The judge agreed with DC's argument that the 1992 agreement with Jean Peavy, the sole heir and executor to Shuster's estate, barred her and all other heirs from pursuing termination. The judge also ruled that the 1992 agreement superseded all prior agreements between Shuster and DC Comics, and as a post-1978 grant it is not subject to termination under § 304(d) of US copyright law. The judge also ruled that the transfer of rights to Pacific Pictures was illegal because it had been made before the effective date of termination of October 26, 2013.

The Shuster heirs appealed to the Ninth Circuit, but the appeals court agreed with Wright's judgment.

Future

The copyright to Action Comics #1 was in its renewal term on October 27, 1998 (the date the Copyright Term Extension Act became effective). This means that the copyright will expire 95 years after it was first secured, i.e. at the end of 2033. Thus, barring new legislation, Superman as he is depicted in Action Comics #1 will become public domain in 2034, along with other story elements such as Lois Lane. Some later developments of the character, such as his power of "heat vision" (introduced in a 1949 story), may not be available to unlicensed authors as they were introduced in works that will persist longer under copyright. Supporting characters such as Lana Lang, or locales such as the Fortress of Solitude, will also persist for longer in copyright.

Cited court cases

Jerome Siegel and Joseph Shuster vs. National Comics Publications Inc. et al. (New York Supreme Court 1947)
Plaintiff's complaint - November 21, 1947 opinion - April 12, 1948 Findings of Facts and Conclusions of Law - April 12, 1948 Interlocutory judgment - May 21, 1948 Final judgment

Jerome Siegel and Joe Shuster v. National Periodical Publications, Inc., Case No. 69 Civ 1429 (USDC SDNY 1969)
Plaintiffs' complaint - Final decision of the court (October 1973)

Jerome Siegel and Joseph Shuster v. National Periodical Publications, Inc., et al., 508 F.2d 909 (2d Cir. 1974)
Final decision of the court (December 1974)

Laura Siegel Larson et al. v. Warner Bros. Entertainment, Inc. et al., Case No. 2:04-cv-08400-ODW-RZ (USDC CDCA 2004)
Plaintiff's complaint - Judge Larson's March 26, 2008 ruling - August 2009 decision - Final judgment of Judge Wright (April 2013)

Laura Siegel Larson et al. v. Time Warner, Inc. et al., Case No. 2:04-cv-08776 (USDC CDCA 2004)
Plaintiff's complaint - Judge Lew's March 23, 2006 ruling - Ruling of Judge Larson (July 2007) - Final judgment of Judge Wright (April 2013)

Laura Siegel Larson v. Warner Bros. Entertainment, Inc. et al., Case Nos. 11-55863, 11-56034 (9th Cir. 2012).
Final decision (January 10, 2013)

DC Comics v. Pacific Pictures Corp. et al., Case No. CV 2:10-cv-03633 ODW (RZx) (USDC CDCA 2010)
Plaintiffs' complaint (May 2010) - October 2012 grant of summary judgment

DC Comics v. Pacific Pictures Corp. et al., Case No. 11-56934 (9th Cir. 2012)
Final decision (January 2013)

Larson v Warner Bros Entertainment et al., Case No. 13-56243 (9th Cir. 2013)
ruling of the court (February 2016)

Contracts, agreements, and other legal documents

• December 1937 employment contract
• March 1, 1938 contract of sale
• September 22, 1938 employment contract
• 1975 agreement between Warner Bros., Jerry Siegel and Joe Shuster
• 1992 agreement between DC Comics and the Shuster heirs
• October 19, 2001 letter from the Siegel heirs to DC Comics

US copyright law

• Current US copyright law (Title 17 United States Code)
• Sonny Bono Copyright Term Extension Act
• Copyright Act of 1976

Bibliography

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