If you ever wondered how Jerry Siegel’s 1970s lawsuit against National Periodical Publications would have turned out if it had been decided today, this week’s Second Circuit ruling in the Gary Friedrich case has your answer.
As Heidi explained in her post earlier today, the Second Circuit U.S. Court of Appeals has reversed the district court’s summary judgment in favor of Marvel in Gary Friedrich’s lawsuit over the renewal of the Ghost Rider copyright. This is a different situation from the recent lawsuits by the Siegel & Shuster families — copyright is now a single term, with creators & their heirs having the right to terminate earlier transfers of copyright after a period of time specified in the 1976 Copyright Act, as amended. Instead, the Friedrich case is a repeat of the very situation that gave rise to the Second Circuit’s 1974 National Periodical Publications ruling that ended the attempt by Siegel to claim the Superman copyright’s renewal.
The connection between Friedrich and the 1974 Siegel opinion is not just a thematic coincidence. The Second Circuit’s Friedrich opinion discusses the National Periodical Publications ruling and distinguishes it from the facts in Friedrich. However, as is sometimes the situation when courts are distinguishing one case from another, what they’re really doing is trying to accommodate changes in the law and public policy.
To understand what’s going on & what it could mean for the Friedrich case going forward, let’s take a quick look at the Siegel lawsuit from the early 1970s. Back then, copyright had a 28-year term that could be renewed just one time. Siegel had transferred the Superman copyright in 1938, and in the lawsuit he was asking the court to declare that he, not National Periodical Publications, held the renewal right. The district court found that Superman was actually a work-for-hire owned by the company. The Second Circuit disagreed, noting that the Superman character was substantially developed prior to being sold to DC. Nonetheless, the Second Circuit also determined that because the contractual language stated that the company would hold the right “forever,” the original sale of rights also included the right to renew.
The Friedrich case also revolves around the questions of whether the original work was work-for-hire and whether the contract giving all rights to the company includes the right to renew the copyright. The copyright at issue: the Ghost Rider material in the character’s debut in Marvel Spotlight #5. The district court, citing the Second Circuit’s 1974 Siegel ruling, determined that because Friedrich likewise transferred all rights “forever,” Marvel held the renewal right. The Second Circuit disagreed and sent the case back down for trial.
However, the appeals court also denied Friedrich’s request for a ruling in his favor on the work-for-hire question, making note of two key aspects of the case that make things look not so good for Friedrich going forward. The court observes that Friedrich only sold his idea for Ghost Rider, not a work fixed in a tangible form – because ideas can’t be copyrighted, that would leave Marvel with both the original copyright and the right to renew. In discussing this, the appeals court further noted that there was substantial evidence that the Friedrich Ghost Rider was in fact work-for-hire, from the earlier Western version of Ghost Rider to the involvement of Stan Lee, Roy Thomas and Mike Ploog.
In essence, the Friedrich appellate court ruling is a mirror world version of the Siegel appellate ruling. Siegel lost on the renewal issue; Friedrich won. Siegel won on the work-for-hire issue, with the court noting why he and Shuster most likely held the original copyright; the Friedrich court sent the case back down with reasons why Friedrich is likely to lose.
From the perspective of copyright history, it’s a revealing outcome. Precedent under the copyright law before the 1976 Act had effectively made the renewal right useless for anyone who had transferred a copyright. It’s a line of legal interpretation that more recent courts and commentators have recognized as having been in the tank for corporate interests to the point of being unjust — indeed, this was a factor in the 1976 copyright reform, which gave subsequent creators a set procedure for re-claiming copyright through termination after 35 years.
Without the Supreme Court decisively scuttling the precedent interpreting the earlier copyright statute, the cleanest way to get around it is to claim that the facts in a current case are actually different. In the Friedrich case, the court finds some rather clever ways to qualify the contractual language as ambiguous, based in part on the fact the Friedrich contract was signed several years after Ghost Rider’s first appearance–not coincidentally, in the year that the 1976 Copyright Act took effect.
Had the earlier Siegel case been decided more recently, there’s a good chance that the Second Circuit would have found a way to achieve a similar outcome to that of Friedrich in regard to the renewal right. That said, today’s Second Circuit would have been more likely to find that Detective Comics’ creative contributions to the first Superman story gave it a substantive copyright interest in the work, at the very least as co-owners with Siegel and Shuster.
Jeff, Nice job relating this to the 1974 Superman case before the New York appeals court. That old case has been eclipsed by the far more recent legal proceedings in California.
I wonder if you have thoughts as to the Second Circuit Court of Appeals being the same court which is reviewing the appeal of summary judgment against the Kirby heirs in the case where they were sued by Disney/Marvel?
Cases are reviewed by three judge panels comprised of members of the court. I assume the judges who ruled in favor of Friedrich are not necessarily the same three judges reviewing the Kirby appeal; or do the various judges on the court have certain case law areas they specialize in, such as intellectual property? Also would a court as a whole would be influenced by very recent prior rulings from the same court. The Friedrich case and the Disney vs. Kirby heirs case are pretty closely related. Could it make the court look divided if one panel of judges came up with a ruling which seems in contrast to another ruling by a different panel of judges from the same court? Would the court pay attention to something like that?
All this confusion with an I.P. case in California where a very conservative George W. Bush appointee ruled in summary judgment against Time Warner (only to see his summary judgment overturned) , and this case in New York were a ruling written by a Obama appointee Denny Chinn overturned a summary judgment ruling by Obama appointee Judge Katherine Forrest , would seem to me good evidence that these cases need to go to full trial, and really need to end up in the SCOTUS, so some kind of clarity can be achieved. How often is it that you see two different appeals courts overturn summary judgments? And on top of that the convention wisdom as I understood it was the California courts are generally assumed to be more “creator friendly” and the New York court a tougher road.
Patrick, thanks — excellent questions.
I find the 1974 case fascinating on multiple levels. More on that to come. As for the Kirby case, one thing to note is that while the Marvel way is relevant to both the Kirby + Friedrich cases, the cases have different parties & factual predicates. If the panels apply the same law to similar facts but reach different conclusions we’d no doubt see that mentioned in a motion for reconsideration or en banc review, but there wouldn’t be a binding “the Marvel way necessitates x outcome” decision, a la collateral estoppel. [My apologies for the unusual number of technical legal terms without more explanation — have to keep this one relatively short.]
Judges + cases are assigned randomly — impartiality trumps expertise. Cases are sometimes transferred to the same panel where, for instance, there are the same parties + transactions, but that’s not the case with Friedrich and Kirby.
Party affiliation and personal background can be helpful in reading the tea leaves, but they’re not always determinative. More on that topic later as well.
As for Friedrich, one thing to note is that it’s not really a decisive victory for Friedrich or loss for Marvel. The court makes its point about the right way to approach renewal terms but concludes by strongly suggesting that it probably won’t matter in the end, since it looks like Friedrich never had the copyright. We’ll see how the trial goes, but if you’re Marvel, you’re not crying in your beer. You have a map and the wind at your back.
The Kirby panel = all solid Democratic appointees, two of ’em with Yale connections (had to throw that in – YLS represent!) Again, not necessarily determinative, especially in the biz friendly Second Circuit, though if any panel is likely to have judges and clerks looking for ways to make the law + facts work for the Kirby side it’s this one. Summer is proceeding apace & soon a new team of clerks will come in, so it wouldn’t surprise me if a decision came down by the end of August/early September.
As for the Supreme Court, it’s not likely without a hot issue or dueling precedents in a Circuit split. These creators’ rights cases tend to have reasonably well established law with fact-intensive determinations, which is less likely to attract a Justice’s attention. Still, the 1974 case was begging for an appeal based on the repeated reliance on state court rulings as binding judgments re federal copyright law, but it seems that Siegel’s counsel hadn’t noticed that between the district & appellate courts there were two Achilles heels.
Thanks. It just seems to me with these “all over the place decisions” where judges who might be assumed to be either pro-business or pro-labor reaching “slam dunk” (summary judgment) conclusions; which are then overturned on appeal, but in the “wrong” court…well the law just must be poorly written, or at least these cases need to go to trial and have everything aired out.
Part of this is you have a queue building up “over there” on the side occupied by The Beatles, the Rolling Stones, Bruce Springsteen, and a long list of other people chomping at the bit.
Patrick, you make a fair point re the law – even to folks who’ve been in the thick of it for a while, there are rulings & less public actions that can seem rather surprising, and at times it’s clear they hinge on whoever is the judge or clerk(s) at the time.
And it can happen in the most unexpected places. For instance, Delaware has an earned reputation for its rigor in corporate law, but there’s one judge (finally recently admonished) who clearly let his position get to his head & started indulging in arbitrary decisions based on florid (+ unfunny) wisecracks on The World as He Sees It.
But then there’s something else you learn after a while that helps ya keep the faith. Most of the cases (in federal courts, at least) are indeed relatively straightforward. You don’t hear about a lot of them, but there are thousands of cases that get quietly resolved in a consistent fashion. When things get wonky, it’s often because there’s a murky fact pattern, vague law (and there’s a lot of that) or debated legal/policy issue. Ideally our legal system’s openness helps make it adaptive, which can be healthier in the long run but can also produce a bit of painful churn along the way.
As for the creators’ rights cases, we have murky facts, vague laws, debated + highly personal issues and the always fun factor of an opportunity for a judge to write an opinion likely to make headlines + to be the subject of law journal articles. We can’t go back + rewrite the 1909 Copyright Act + decades of contemporaneous precedent, so we’re stuck there. All we can do is try to strategize wisely and tell a convincing story.
The Siegel case illustrates the power of savvy rhetoric – the Siegel narrative drove the March 2008 ruling, which, as I tried to signal as best I could without writing DC’s briefs in real time on Newsarama, had legal holes so big Charlie Brown could kick a football through them. When the Toberoff deal entered the frame, the narrative shifted, so much so that even a legendary liberal such as Judge Stephen Reinhardt didn’t appear to see a gross injustice at stake.
All of which is to say, yes, I agree with you. There are times when judges overreach on summary judgment, and the cases here offer good examples of that.
Speaking of which …
Sure the “slap” suit filed against Toberoff was a huge overreach and clearly designed to harass him. In a way it worked out pretty well for Toberoff because the judge’s ruling in dismissing the suit crushed the narrative Time Warner was promoting concerning the way Toberoff entered the case and made clear his clients were very unhappy with the deal brokered by Marks (they called it “disgusting”). If anything Marks comes across as if HE was looking out for himself, as opposed to Toberoff who is taking a huge gamble. There was nothing new in the judges ruling but a ruling from a judge is a lot more effective than Toberoff or his clients telling very much the same story the judge ended up telling.
To be honest I’ve never felt these kinds of cases had a very good chance of success, but summary judgments which end up being overturned on appeal make a good case these issues need the spotlight of a full public airing.
The problem with cases like these is in the end they get decided over work arounds of wording and one party saying something was assumed. Also, as much as we care about the character or the creator the fact is yeah they got screwed over, but it was perfectly legal.
Mark Evanier has some brief comments on that article about Toberoff.
http://www.newsfromme.com/2013/06/14/super-links/
Personally I’m still looking for a good chunk of the comics press to come out and admit they have egg on their collective faces for parroting a bunch the Time Warner smear campaign directed at Toberoff. It seems to me the ruling by Judge Otis Wright tossing aside the slap suit which smeared Toberoff got very little traction. That is almost certainly because the ruling took a sledge hammer to the Time Warner smears which were the conventional narrative.
The best part of the ruling for me was when Wright used the phrase “deeply troubling” concerning the logs kept by Toberoff, and then went on to explain at length why there was nothing troubling about the logs at all. A cleaver way of the judge sending a message that, “yes I’m very much aware of the logs, and after looking at them very closely they actually don’t trouble me at all.”
Otis Wright is probably the most conservative judge in the California court system. He’s a former Marine, and police officer who was appointed by George W. Bush. Wright is known for larding some of his opinions with Star Trek references.
http://www.bizjournals.com/twincities/blog/law/2013/05/prenda-law-star-trek-opinion-otis-wright.html?page=all
@Patrick Ford Speaking as kinda sorta someone in the comics press – I never received the official card to put in my hat band – I have to say that I don’t consider anything that I’ve written about Toberoff to be a smear or a parroting of the Time Warner narrative frame.
And I have bona fides here – they contacted me to break the Pacific Pictures story, and I did not do it. I know enough about how this works not to be a tool. This no doubt cost me more tipoffs down the line, but that’s life.
My aim here has been to flag issues that have had or could have a substantial impact on the case, and in particular, issues that other folks haven’t seen or got incorrect.
Was the Facebook case likely to be dispositive? Yes, it seemed to me, and I do believe history bore that analysis out.
Was Time Warner shifting the narrative away from the Siegels toward Toberoff in ways that could affect how judges saw the Siegel case? Yes again, and if you read the Ninth Circuit records – with a panel that included the one of the Ninth Circuit’s premier champions of the oppressed, the Hon. Stephen Reinhardt – the appeals court was clear in both its rulings & oral argument that it saw the Toberoff deal as problematic in ways that a longtime court reader would see as pertinent to its perception of the case.
I have more on this in the 9 single-spaced pages (!) of neutral legal explanations that I provided to Business Week in response to various questions as background for its Toberoff piece, but here are a couple key quotes from the Ninth Circuit in this regard:
“The ethical and professional concerns raised by Toberoff’s actions will likely occur to many readers, but they are not before this court.”
“There is also evidence that Toberoff should himself be treated as a co-client. After all, Toberoff represented all of the Petitioners, including a joint venture between the Heirs and himself in which he had a controlling interest.”
This is much more important than the question of the leaked logs were – it gets at the ethical & financial core of the case. DC played a card and it proved to be trump, at least at that stage of the game. Play-by-play that called it as a serious possibility is not an endorsement of the tactic or the outcome – it’s just describing the cards as they lie.
This site is more credible than any others where I wouldn’t think it was worth commenting. For several years various comics news sites, and blogs (blogs have naturally been the worst offenders) have been pushing the simplistic idea Toberoff moved in like a shark and inserted himself into the legal battle over rights to Superman. There have also been frequent comments depicting the Siegel’s a gullible fools. As it turns out Judge Wright’s ruling in favor of Toberoff in the lawsuit brought against him by Warner made it clear Toberoff entered the picture only after the Siegel’s had fired their previous attorney Kevin Marks. The judge not only dismissed what was clearly a slap suit (my characterization) but said the evidence presented by Warner (in the form of letter stolen from Toberoff’s office) :
“actually serve more to discredit DC’s cries of intentional interference than they do to bolster them.”
While the news was reported at comics sites, the reports tended to carry headlines like “Toberoff Dodges Sanctions” and play up the a comment by the judge where he said he was “deeply troubled” by Toberoff not fully reporting updates in his privilege logs. What the comics press sites did not report is that comment was quickly followed by a detailed explanation where the judge made it evident he really wasn’t troubled at all.
“the record does not support a clear inference that this logging inaccuracy was the result of a deliberate attempt to mislead the Court or DC Comics; rather, it appears more likely the result of a misplaced reliance on the attorney-client privilege and the related joint-litigation privilege. Indeed, at various stages in this litigation, Toberoff’s joint-litigation privilege assertions were upheld in some respects and overruled in others. That his assertions have been upheld—even if such assertions were ultimately determined to be unwarranted—establishes that the privilege assertions were at least colorable, and therefore do not rise to willful attempts to mislead.”
What is really telling is many comics news sites made no attempt to mention and correct the long standing narrative (Toberoff the greedy shark) they had been pushing had been shot down by judge Wright’s ruling. Yes, some reported the ruling, but in a muted way, and without any acknowledgement along the lines of “Sorry to say we have egg on our faces. You know how we have been telling you for years that Toberoff inserted himself into the Superman case and swatted away a generous offer made by Warner to the Siegel ? Well as it turns out that was a fantasy based on nothing but an anti-Toberoff bias, and the fact that DC and Marvel buy advertising on our website.”
From the ruling:
“…the letters at issue here actually serve
more to discredit DC’s cries of intentional interference than they do to bolster them.
For example, DC’s fifth claim alleges that “Toberoff approached the Siegel Heirs and
their representatives in late 2001 and 2002 to express interest in purchasing their
Superman rights” with full knowledge that “the Siegel Heirs had already reached an
agreement with DC Comics.” (FAC ¶ 184.) DC also contends that “[a]s a direct
result of Toberoff’s misdeeds, the Siegel Heirs repudiated the Siegel-DC Comics
Agreement with DC Comics.” (FAC ¶ 186.) But the November 2, 2002 letter from
Laura Siegel to Michael Siegel unambiguously reveals that Joanne and Laura Siegel
fired Kevin Marks (who had been representing them in negotiations with DC Comics
in late 2001 and early 2002) upon their “dissatisf[action]” with “the revolting offer
from DC” in February 2002—six months before they first learned that Toberoff had
made an offer to Marks in August 2002.
The Court could go on, but to no productive end.”
As we see. The heirs had fired their previous attorney Kevin Marks after he brokered what the Siegel heirs saw as a “revolting offer” from Warner, and this was six months before they met Toberoff. So comic book land’s pet theory “Marc Toberoff evil shark” is torpedoed and yet not one Mea Culpa to be found anywhere.
I really like Wright’s conclusion where he writes: “The Court could go on, but to no productive end.”
In other words, “It so easy for me to throw this out I’m not going to even bother listing all the other problems I have with the DC arguments.”
Accusations of greed are interesting – there’s an unpleasant subtext that I don’t believe has been discussed but should be noted & condemned.
There are a couple thing vis a vis Toberoff & the Siegels that I went into @ a lot greater depth with Business Week. [One advantage of phone calls and long form memos is that there’s a lot more room for explaining things that blog posts of necessity tend to compress.]
One is that the Siegels were motivated by far more than money. Money is just a convenient albeit distracting marker.
The other is the context of Toberoff’s production deals. While the appellate panel found it to be ethically questionable, the fact is that making lawyers stakeholders in a productive asset has been a significant practice in the legal biz since the mid-to-late 1990s, when the dot-com boom made millionaire attorneys feel like poor cousins to clients making billions off of company stock. Several factors made the Toberoff deals seem more problematic from the standpoint of professional ethics – another thing I can go into later – but as I told BW, I’m not going to take a position on whether it actually was.* My focus is on their rhetorical impact relative to the Siegel & Shuster copyright actions, which was not exactly positive.
*As a quick thought experiment, let’s compare Toberoff’s getting a stake in his clients’ copyrights with, say, a Warner Brothers’ in-house counsel & corporate VP getting compensated in part with Time Warner stock. Is one more ethical than the other?
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