The Failings of Intellectual Property Law Through the Eyes of Superman

Home , Glenville High School, Joanne Siegel, Kryptonite (story arc), Lana Lang

Jesse J. Krueger*

INTRODUCTION ...... 229 HISTORY ...... 230 I. Up, Up and Away!: The Creation of Superman ...... 230 II. Faster than a Speeding Bullet, More Powerful than a Locomotive, Able to Adequately Resolve the Tension Between the Rights of the Publisher and the Author?: History of the Copyright Act ...... 232 III. It’s a Bird! It’s a Plane! It’s a Lawsuit!: History of the Litigation ...... 236 ANALYSIS ...... 241 I. The Man of Tomorrow: The Future of Superman? ...... 241 II. This Looks Like a Job for Superman!: Copyright Law as Kryptonite ...... 243 CONCLUSION ...... 248

INTRODUCTION Comic books began as ten-cent guilty pleasures, lining the shelves of gas stations and supermarkets and tempting children with garish colors, fantastical settings, and sometimes-questionable content. While early comic books were primarily horror anthologies, westerns, and funny books, the industry changed dramatically with the publication of Action Comics #1 in 1938, featuring the first appearance of Superman. Superheroes were suddenly the new norm in what has become affectionately known as the "Golden Age" of comics. Super- man's first appearance paved the way for other heroes, the likes of

* J.D. 2012, Duquesne University School of Law; M.B.A. 2011, Salem Inter- national University; B.A. English and French, Washington & Jefferson College, 2009.

229 230 Duquesne Business Law Journal Vol. 14:2 which the world had never seen before: the mythology-based Wonder Woman; the dark knight detective, Batman; the otherworldly Green Lantern and other notable characters who today form the bedrock of a multi-billion dollar, multi-platform industry. Stories featuring Super- man, Batman, and others appear not only in graphic narratives, but in literature, television, film, and video games; superheroes have spawned an entire subculture, generating billions of dollars a year— all brought about, arguably, by the introduction of Superman. So it shocks the conscience of many to hear that Superman’s creators, Jerry Siegel and Joe Shuster, originally received only $130 for the ownership rights of a character that today is worth billions.1 This Comment will examine the history of the litigation surrounding Su- perman in conjunction with an analysis of ever-evolving American copyright law. Specifically, it will seek to illuminate the inadequacy of current copyright law in regards to graphic characters, and explain how various provisions of the different iterations of the Copyright Act work counter to each other and undermine the intent of American laws regarding certain types of intellectual property.

HISTORY

I. Up, Up and Away!: The Creation of Superman The story of Superman begins, fittingly, in a newspaper office in the early 1930s.2 The newspaper office was that of Glenville High School

1. It is difficult to accurately estimate the true worth of the Superman character or the revenue brought in by DC Comics due to its ownership by Time-Warner, who does not report revenue for its subsidiaries independently. However, the immense value of the character cannot be disputed; a rare copy of Superman’s first appearance recently surfaced and was sold for $1,500,000 dollars-- a fairly significant gain over its original price of 10 cents. CNN Wire Staff, rare comic of Superman debut fetches $1.5 million, http://articles.cnn.com/2010-03-30/entertainment/superman. comic_1_action-comics-comic-book-superman-book?_s=PM:SHOWBIZ (last accessed September 21, 2011.). According to BoxOffice Mojo.com, the Superman character has achieved an ad- justed gross of $1,192,909,700 solely through his five feature films. Box Office Mojo, http://www.boxofficemojo.com/franchises/chart/?id=superman.htm (last accessed September 19, 2011). To accurately value the character, one would also have to consider his print revenue, revenue from merchandising, advertising, television licenses, video game licenses and many other revenue streams. 2. Siegel v. Warner Bros. Entm’t, 542 F. Supp. 2d 1098, 1102 (C.D. Cal 2008) [hereinafter Siegel I]. See also Daniels, Les, Superman: The Complete History: The

2012 Copyright and Kryptonite 231 in Cleveland, Ohio, wherein students Jerome Siegel and Joseph Shus- ter (“Creators”), after bonding over a shared love of comic books and science fiction, began discussing their own creation.3 The two created the first Superman, although it bore virtually no resemblance to the Superman we know today; the original version was a bald villain with mind-control powers, a far cry from the icon he was to become.4 However, the pair later re-tooled Superman into his second iteration, a muscular hero dressed in street clothes along the lines of popular characters like Flash Gordon and Tarzan.5 Though they received an offer for publication that was later rescinded, the pair continued to change the character and the format in which they told his story, eventually settling on the most common graphic narrative of the day, the newspaper comic script. Siegel drafted several scripts for a new Superman character, which would evolve to become the now-familiar symbol of truth, justice, and the American way.6 This version of the character was an alien, sent to Earth as an infant from an unnamed planet facing destruction.7 He had superhuman powers including strength, the ability to leap 1/8th of a mile, hurdle over a 20 story building, and run faster than an express train—all of this in addition to an alter-ego, Clark Kent.8 Shuster then set about illustrating the character, designing the first versions of the now fam- ous cape and Superman symbol; he also originated distinctive designs for the Clark Kent persona, namely his signature curl and eyeglasses.9 While the pair was initially unable to find a publisher for their Su- perman scripts, they did achieve some success with other comic strip

Life and Times of the Man in Steel (2d ed., Chronicle Books 2004) (providing a more complete account of Superman’s creation). 3. Siegel I, at 1102. 4. Id. This version of Superman appeared in a short story, as opposed to a graphic narrative. Id. 5. Id. at 1103. 6. Siegel I, 542 F. Supp. 2d at 1103. “Truth, justice and the American way” is popular catchphrase describing Superman’s goals and philosophies. The phrase was actually coined by the 1948 Superman radio show, but gained its popularity with the television series which ran in the 1950s. Lundegaard, Erik, New York Times, Edito- rials, International Herald Tribune, Truth, justice and (fill in the blank), http://www.nytimes.com/2006/06/30/opinion/30iht-ederik.2093103.html (last accessed Nov. 4, 2011). 7. Siegel I, 542 F. Supp. 2d at 1104. 8. Id. 9. Id. 232 Duquesne Business Law Journal Vol. 14:2 properties, most notably “Slam Bradley” and “The Spy,”10 both of which were acquired by Detective Comics in 1937. Building on the success of those two properties, Siegel and Shuster finalized a deal with Detective Comics to provide additional strips for the next two years.11 As part of this deal, Siegel and Shuster also agreed to various work-for-hire provisions requiring any new or additional features created by Siegel and Shuster to be submitted to Detective Comics, which would then have to a sixty-day option to publish the material.12 When Detective Comics later decided to publish a new series, Ac- tion Comics, they proposed publishing a revised version of Siegel and Shuster’s Superman strip as the leading.13 Siegel and Shuster received a check for $130 dollars, the standard pay for a 13-page story, and signed an agreement assigning to Detective Comics “all [the] good will attached … and exclusive right[s]” to the Superman character “to have and to hold forever.”14 Subsequently, under the careful direction of Detective Comics, Superman became a pop culture phenomenon, the subject of hundreds of merchandising licenses, and a veritable cash-cow for Detective Comics.15

II. Faster than a Speeding Bullet, More Powerful than a Lo- comotive, Able to Adequately Resolve the Tension Between the Rights of the Publisher and the Author?: History of the Copyright Act Congress first addressed the issue of intellectual property rights as far back as 1790, preserving the provisions of the original Statute of

10. Id. at 1106. 11. Siegel I, 542 F. Supp. 2d at 1106. 12. Id. The work-for-hire provisions mandated that all products and work done by Siegel and Shuster for Detective Comics during their employment “shall be and become the sole and exclusive property of [Detective Comics] and [that Detective Comics] shall be deemed the sole creator thereof. Id. 13. Id. The required revisions were primarily for the sake of formatting. Detec- tive Comic’s publishing format required eight panels per page and 13 pages per story. Siegel and Shuster’s original strip was altered to accommodate those re- quirements although the substance of the story was unchanged. Id. at 1106-7. 14. Siegel I, 542 F. Supp. 2d at 1107. 15. Id. at 1111. Superman was licensed to feature in a “variety of media, including but not limited to radio, novels, live theatrical productions, merchandise and theme parks.” Detective Comics registered dozens of federal trademarks, based on Superman’s distinctive design, catchphrases and story elements. Id. 2012 Copyright and Kryptonite 233 Anne.16 However, the first real strides in American copyright law didn't take place until 1909 when Congress passed a new version of the Copyright Act. The 1909 Act, under which Siegel and Shuster created Superman, granted an author the copyright in his work for 28 years from the date of publication.17 Additionally, the author was permitted to renew the copyright for a second term of 28 years upon its expiration.18 By designing the system as a two-term system, Congress sought to protect authors from the disproportionate bargaining power of the publishers.19 Furthermore, allowing for a separate renewal term gave authors the chance to correct any mistakes made in the assignment of the initial terms and, to some degree, protected authors from the effects of poor business decisions.20 The remunerative value of the two-term system was severely undercut by the United States Supreme Court in 1943, when they held that an author could assign both the initial copyright and the renewal rights during the first 28-year period.21 This decision effectively removed the author's ability to remedy a bad bargain at the end of the first term and once again left publishers with an advantage when it came to bargaining for ownership rights. Perhaps partially due to this inequity, Congress passed its next round of significant copyright reform in 1976.22 The new Copyright Act eliminated the two-term system, instead, granting authors a copyright term of life plus 50 years.23 The 1976 Act also expressly provided for the termination of transfers in an attempt to do what the two- term system had not—protect the author from being permanently in- jured by bad agreements caused by disproportionate bargaining pow-

16. Rochelle Cooper Dreyfuss & Roberta Rosenthal Kwall, Intellectual Property 212 (2nd ed., Foundation Press 2004). The Statute of Anne was an act passed by the Parliament of Great Britain in 1710, marking the government's first foray into regu- lating intellectual property rights rather than leaving the enforcement of those rights to private parties. See 8 Anne c. 19, 1709 (repealed 1842). 17. 35 Stat. 1075 (Mar.4, 1909, repealed Jan.1, 1978). See also Dreyfuss & Kwall, Intellectual Property at 213. 18. Id. 19. H.R. REP No. 2222, 60th Cong. 2d Sess. 14 (1909). 20. Id. 21. Fred Fisher Music Co. v. M. Witmark & Sons, 318 U.S. 643, 656-59 (1943). 22. Pub. L. No 94-553 (1976) (codified at 17 U.S.C. § 101). 23. 17 U.S.C. § 302(a). The copyright term was subsequently extended again in 1998, under the Sonny Bono Amendment which added 20 years, granting an author the rights in his work for life plus 70 years. 234 Duquesne Business Law Journal Vol. 14:2 er.24 The termination of transfer provisions also allowed authors to renegotiate the rights to their creations after they had the opportunity to realize their full value. The 1976 Act expressly designated the termination provision as one which could not be contracted away and thus, in theory, preserved the rights of the author as it worked to resolve the tension between those rights and those of the publisher.25 Section 304(c) retroactively granted authors who had assigned their rights prior to the Act's effective date the ability to terminate the transfer 56 years after the original grant.26 The Act established a 5-year window beginning at the end of that 56-year period, during which authors could file for a termination of transfer.27 Congress was, of course, also sensitive to the rights of the publisher and incorporated several provisions which were also designed to protect the publishers from the unilateral effect of the termination provisions. Chief among these was the work-for-hire exception, which made any work created under a legal employment relationship the work of the employer and not the employee.28 Thus, the employee, presumably the real author, had no right to termination when the work or character was created as a work-for-hire. Beyond the work-for-hire exception, the 1976 Act also includes provisions allowing for the protection of derivative works.29 The Act defines a derivative work as one "based upon one or more pre-existing works" and explains, "a work consisting of editorial revisions, annota- tions, elaborations, or other modifications which, as a whole, represent an original work of authorship, is a 'derivative work[.]'"30 The derivative works exception is intended to protect original works that use elements of existing copyrighted works to create something new.31 The derivative works exception most often applies to adaptations, satires, and fictionalizations but can also apply to sequels and other interpretations of existing works. In order to qualify as deriva-

24. 17 U.S.C. § 304(c). See Mills Music, Inc. v. Snyder, 469 U.S. 153, 172 (1985) (discussing the termination provision and its effect). 25. 17 U.S.C. § 302(c)(5). 26. 17 U.S.C. § 302(c)(3). 27. Id. 28. 17 U.S.C. § 304(a)(B)(ii). 29. 17 U.S.C. § 106(2). 30. 17 U.S.C. § 101. 31. Dreyfuss & Kwall, Intellectual Property at 348. 2012 Copyright and Kryptonite 235 tive, a work need only be sufficiently original with elements of new creative expression able to qualify for copyright protection.32 As discussed below, serialized narratives (like comic books and comic strips) are particularly susceptible to the application of the derivative works exception. Similarly, graphic narratives must contend with the tangential realm of trademark protection, an area separate from but ineluctably linked to copyright law. Trademark protection under the Lanham Act is afforded to words, symbols, designs or other distinctive elements that represent a brand and indicate a source of goods and/or services.33 Usually, a trademark is a visual indicator like a crest or a slogan, although courts have extended trademark protec- tions to a variety of other types of indicators.34 Typically, trademark and copyright protection apply to two different types of intellectual property, but in the case of graphic narratives and characters, the two overlap in a rather unique way. While copyright law protects the graphic representation of the character, trademark law protects the association that the character suggests.35 Most comic book publishers have trademarked the images of their characters so as to protect their stream of commerce and prevent dilution of the image's potency through unauthorized use. Furthermore, many characters, like Super- man, have their own emblems and crests which are used to symbolize their association with the publisher and are easily recognized along- side the publisher’s own logo. Thus, serialized graphic characters hold a unique position in the world of intellectual property law—one which the current legal framework has not yet been able to account for as seen by the potential implications of the Superman dispute.

32. 17 U.S.C. § 103(b). See also Durham Indus., Inc. v. Tomy Corp., 630 F.2d 905, 910 (2d Cir. 1980) (discussing the necessary elements of a derivative work sufficient to sustain copyright protection). 33. 15 U.S.C. § 1125(1946). 34. See e.g. Qualitex Co. v. Jacobson Prods. Co., 115 S.Ct. 1300 (1995) (recognizing a single color as a valid trademark); In re General Electric Broadcasting Co., 199 USPQ 560, 563 (T.T.A.B. 1978) (recognizing a distinctive sound as a valid trademark); In re Clarke, 17 USPQ2d 1238 (T.T.A.B. 1990) (recognizing scent as a potential valid trademark). 35. Dreyfuss & Kwall, Intellectual Property at 6-9. 236 Duquesne Business Law Journal Vol. 14:2

III. It’s a Bird! It’s a Plane! It’s a Lawsuit!: History of the Litigation The tension between Siegel and Shuster and Detective Comics first came to a head in 1947.36 The Creators brought an action in the New York Supreme Court of Westchester County seeking to annul and res- cind their previous agreements with Detective Comics and recover their ownership rights in Superman.37 They claimed that their original agreement was void for lack of mutuality and consideration.38 The court held that the assignment of the copyright was valid and that De- tective Comics owned the rights to Superman.39 However, Detective Comics agreed to pay the Creators the sum of $94,000 in exchange for a signed stipulation reasserting Detective’s rights to the character.40 The official referee from the Westchester proceedings then vacated his earlier findings, allowing the parties to be bound by the stipulation.41 Under the 1909 Act, the initial assignment of rights expired in 1966, prompting new litigation. The Creators filed suit in federal district court in New York seeking a declaration that they were the owners of the renewal rights to the Superman character.42 The court held that Siegel and Shuster had assigned all of their rights in the original agreement, and that they had reiterated those terms in the stipulation signed subsequent to the first bout of litigation. The court granted summary judgment against the Creators because the Creators had assigned not only the initial copyright term but also the renewal rights.43 After the court made its decision, the New York Times published a story describing the Creators’ “destitute” living conditions, causing a public outcry which eventually prompted Warner Communications Inc., the new owner of DC Comics (formerly Detective Comics) to

36. Siegel I, 542 F. Supp. 2d at 1107. 37. Id. at 1112.; See also Siegel v. National Periodical Publications, Inc., 508 F.2d 909 (2nd Cir. 1974) [hereinafter National II] (analyzing the referee’s decision in detail). 38. Id. at 1112. 39. Id. 40. Siegel I, 542 F. Supp. 2d at 1112. 41. Id. 42. Siegel v. National Periodical Publications, Inc., 364 F. Supp. 1032 (S.D.N.Y. 1973), aff’d by, 508 F.2d 909 (2nd Cir. 1974) [hereinafter National I]. 43. Id. at 1038. See supra. The court held that the renewal rights could be assigned before they vested in accordance with Supreme Court precedent established in Fred Fisher Music Co. v. M. Witmark & Sons, 318 U.S. at 656-659. 2012 Copyright and Kryptonite 237 offer the Creators annual payments and benefits for the remainder of their lives and to credit them as the creators of Superman.44 Warner was careful to note that this agreement was voluntary and borne out of a moral obligation and not a legal one.45 When the 1976 Act passed and the termination of transfers provision became law, it provided a new avenue for the Creators and their heirs to regain the rights to the Superman character. In 1997, Joanne Siegel and Laura Siegel Larson sought to terminate the original 1938 transfer by serving Warner Bros. with seven notices of termination pursuant to §304(c) of the 1976 Act.46 The termination notices were intended to apply to the original 1938 agreement, the stipulation signed after the Westchester litigation and the 1975 agreement regarding benefits and insurance.47 According to these notices, the termination would have been effective on April 16, 1999, but by offering additional benefits to Joanne Siegel, Warner convinced the heirs to continue negotiating for a settlement.48 The parties subsequently signed a tolling agreement in furtherance of that goal.49 The parties exchanged several documents containing various forms of a settlement agreement, which addressed not only the Superman character, but other related characters to which Siegel and Shuster believed they had a legal claim.50 The back and forth between the two parties, however, ceased in May 2002, when Joanne Siegel wrote a letter to Time Warner's Chief Operating Officer alleging that the most recent version of the agreement had been drafted to include several provisions and demands which the parties had not discussed.51 Sub-

44. Mary Breasted, Superman’s Creators, Nearly Destitute, Invoke His Spirit, N.Y. Times, Nov. 22, 1975, at 62. 45. Siegel I, 542 F. Supp. 2d at 1113. The agreement provided for various benefits including medical insurance for Siegel and Shuster. It, furthermore, contained provisions for Siegel’s wife Joanne including surviving spouse benefits should Sie- gel die before December 31, 1985. The agreement was amended multiple times to increase the amount paid to the Creators and to extend the surviving spouse benefits indefinitely for Joanne. Furthermore, the pair was paid special bonuses on several occasions. Id. 46. Id. at 1114. Both Siegel and Shuster died during the 1990s, giving their heirs claim to any potential rights. 47. Id. 48. Id. 49. Siegel I, 542 F. Supp. 2d at 1115 50. Id. The parties also disputed the rights regarding the characters known as the Spectre and Superboy. Id. 51. Id. 238 Duquesne Business Law Journal Vol. 14:2 sequently, Time Warner redrafted the agreement; the redraft was similarly rejected and the Siegel heirs fired their current attorneys and sent a letter to DC Comics ending all negotiations.52 The Siegel heirs subsequently filed suit in the United States District Court for the Central District of California, seeking a declaratory judgment that they had successfully terminated the original grant of ownership and recaptured half of that copyright.53 The parties cross- moved for partial summary judgment.54 The court first addressed the validity and enforceability of the termination notices themselves, noting that "[i]t is difficult to overstate the intricacies of these [termination] provisions, the result of which is that they are barely used, no doubt the result desired by lobbyists for assignees."55 The first issue before the court was whether the promotional announcements preceding the publication of Action Comics #1 were a part of the termination notices, because the publication of the promotions were a few days outside of the five year termination window.56 The court found that the key in deciding the timeliness of the termination notices was when the copyright in the work was secured, not when the work was created.57 Based on that finding, the court held that the copyright in the promotional announcements depended on when the publisher provided notice as required under Section 19 of the 1909 Act; thus, the copyright was secured on the date when the publications containing the promotions were released.58 Despite the heirs' numerous arguments to the contrary, the court held that "the five-year time window is an unbendable rule with an inescapable effect."59 Accordingly, the copyright to the cover of Action Comics #1

52. Id. at 1116. 53. Siegel v. Warner Bros. Entm't Inc., 542 F. Supp. 2d at 1116. The remaining half of the copyright would still belong to Time Warner/ DC Comics, although it was highly likely that if the Siegel heirs were successful, the Shuster heirs may be the next to terminate the original transfer. 54. Id. 55. Id. at 1117, quoting William Patry, Choice of Law and International Copy- right, 48 AM. J. COMP.L. 383, 447 (2000). For another Court's considerations of the intricacies of the termination of transfer provisions, See Burroughs v. Metro- Goldwyn-Mayer, Inc., 683 F.2d 610 (2nd Cir. 1982). 56. Siegel I, 542 F. Supp. 2d at 1116. 57. Id at 1117. 58. Id. 59. Id. at 1121. The Siegel heirs argued, among other things, that the initial copyright registration was questionable because Detective Comics' successor had not registered it until 28 years after its publication. They also argued that there was no

2012 Copyright and Kryptonite 239 first gained copyright protection when it was published in the announcements, notably outside of the scope of the termination notices, and not when the cover was actually printed.60 The court then ana- lyzed what material actually appeared within the promotions and remained the copyright-protected property of the publishers. The court found that based on what was included in that promotion, the publishers may continue to exploit "the image of a person with extraordinary strength who wears a black and white leotard and cape[;]" any other material contained in Action #1 was still potentially subject to the termination.61 The next issue before the court was how the work-for-hire exceptions would apply to the case considering the changes made to the original creation for publication.62 Time Warner argued that some parts of Action Comics #1 were unaffected by the termination notice because they were to be considered works for hire and had been added either at Detective's insistence or by other Detective employees.63 The court rejected this argument based on the fact that the Second Circuit had already decided the issue in earlier proceedings, and found that all of the Superman material was created before the employment relationship began and was, therefore, not a work-for-hire.64 Third, the court questioned whether the fact that the termination notices failed to address the 1948 consent judgment was fatal to the aims of the terminations themselves. The court found, first, that the consent judgment did not transfer any rights and, second, that even if it had, its omission was a harmless error and did not affect the potential

way to authenticate the date of publication and that the copyrightable material within the promotional materials was limited. They argued that the promotional material was merely a reprinting of a separate copyrighted work (the cover of Action #1), and that due to its derivative status, Detective had no separate claim to the material. Id. 60. Id. at 1125. 61. Id. The court specifically noted that all of the most important elements of the Superman character would fall under the scope of the termination notices, specifically, the entire storyline from Action Comics, Superman's leotard and signature "S" symbol, the color scheme of his costume and all of his abilities. Id. 62. Id. At 1126. 63. Siegel I, 542 F. Supp 2d at 1127. The Defendants claimed that the color choices (specifically that of Superman's distinctive symbol), the actual cover art- work and anything that Siegel and Shuster had added to the comic themselves to amend it for publication belonged exclusively to Detective Comics. Id. 64. Id. at 1130. 240 Duquesne Business Law Journal Vol. 14:2 transfer.65 The court further held that Joanne Siegel's continued ac- ceptance of benefits did not render termination notices ineffective.66 Next, addressing the statute of limitations, the court found that it began running once the claim had accrued and that, in cases seeking co-ownership, the claim accrues when there is a "plain and express repudiation of co-ownership."67 According to the court, that repudiation did not take place until April 16, 1999, the effective date of the termination; based on that calculation, the court found that the action was timely.68 Similarly, the court was then asked to interpret Califor- nia law and how it would apply to the purported settlement agreements, which the Defendants claimed had already resolved many of the issues before the court.69 The court held that the settlement negotiations did not result in an enforceable agreement that would preclude litigation.70 Finally, the court considered the effect of the terminations themselves, noting that the Siegels could recover some, but not all, of the rights to the character.71 The court noted that the termination right was intended to give authors "a second bite at the apple" and an opportunity to keep the extended renewal term in their work so that they could re-bargain for the rights once the true value of the character was known; however, the court found that this did not give the authors claim to all of the rights bound up in the work.72 Specifically, the court held that should the termination be successful, the heirs would have no right to the foreign profits of Superman, nor to the profits obtained through the use of the Superman trademark that are attributable to only the trademark rights.73 Finally, the court held that the heirs

65. Id. at 1139. See also Siegel v. Warner Bros Entm't Inc., 690 F. Supp. 2d 1048 (C.D. Cal. 2009) [hereinafter Siegel III] (denying Defendant's Motion to Reconsid- er). 66. Siegel I, 542 F. Supp 2d at 1134. 67. Id., quoting Zuill v. Shanahan, 80 F.3d 1366, 1369 (9th Cir. 1996). 68. Siegel I, 542 F. Supp. 2d at 1136. 69. Id. at 1137. The parties quibbled over when or if the contract was formed due to the differing terms in the many drafts of the agreement. Id. 70. Id. at 1139. 71. See Siegel v. Warner Bros. Entm't Inc., No. CV 04-08400-SGL, 2009 WL 2014164 (C.D. Cal. July 8, 2009) (establishing exactly what rights could and could not be recovered by the heirs). 72. Siegel I, 542 F. Supp 2d. . at 1140. 73. Id. at 1141-43. 2012 Copyright and Kryptonite 241 would have no claim to the profits obtained from the publisher's use of unaltered, pre-termination derivative works.74 Ultimately, the court held that Siegel's heirs had regained the copyright in the material published in Action Comics #1, subject to a trial on the proper apportionment of profits. As things currently stand, come 2013, DC Comics will lose the exclusive rights to a significant portion of Superman's history while maintaining the rights to a majori- ty of his most popular stories and the trademark rights; the Creators' heirs will regain the rights to those story elements present in Action Comics #1, #4, the first two weeks of serialized comic strips, and certain pages of Superman #1.75

ANALYSIS

I. The Man of Tomorrow: The Future of Superman? The inadequacy of American copyright law and its fumbling at- tempts to deal with graphic narratives are indisputably obvious when one looks at the presumably unintended but nonetheless absurd results of the Superman litigation. As things currently stand, should the Shuster heirs exercise their right to terminate the transfer of the second half of the copyright, the Superman character in all of its forms would be virtually worthless, a result clearly not in line with the spirit of intellectual property law.76

74. Siegel I at 1153. The court also addressed, but failed to rule on, whether profits from DC Comics affiliates would be assignable to the heirs after successful termination. Id. at 1142. 75. Order Resolving Additional Issues, 658 F. Supp. 2d 1036, 1095 (C.D. Cal. 2009) [hereinafter Siegel II]. 2013 is when the Shuster heirs will first be able to exercise their termination rights, potentially reclaiming the final half of the Super- man copyright from Warner Bros., a fact which has motivated many of Warner's recent business decisions including the rushed greenlighting of a new Superman movie and, some argue, radical changes to the character as part of a line-wide reboot of the comic book universe. See Keith A. Howell, J.D., Thoughts on DC Reboot Intelligent Designs, http://www.profchallenger.com/2011/06/thoughts-on-dc-reboot- part-3-of-3-every.html (last accessed August 3, 2011). 76. "Intellectual property law is aimed at encouraging the development and dis- semination of new ideas..." Dreyfuss & Kwall, Intellectual Property, at 4. See also U.S. v. Paramount Pictures, Inc., 334 U.S. 131, 158 (1948) (stating that intellectual property laws "[serve] to induce release to the public of [the author's] creative ge- nius"). 242 Duquesne Business Law Journal Vol. 14:2 Based on Judge Larson's various decisions, unless the two parties come to some sort of an agreement, the Superman character will effectively be split in two. The heirs will control the original Superman and all of the story elements present in those initial strips, while DC will control the current Superman and all of the derivative material created between 1938 and 1999. Although there is recent precedent providing for the simultaneous existence of two characters springing out of one, splitting the Superman character up into bits and pieces based on what did and did not appear in his initial publication is not only counterintuitive, but leaves neither side with sufficient material to publish a recognizable version of the character.77 DC would maintain the rights to a character that lacked the defining origin and alter-ego of Superman. DC's current Superman would no longer be able to claim the alien refugee status that has motivated so many stories; he wouldn't be Clark Kent, nor would he have any claim to his seminal love interest Lois Lane. Similarly, Siegel and Shuster's heirs would have the right to publish new stories featuring original Superman, but would lose crucial elements like Smallville, Metropo- lis, Kryptonite, Lex Luthor, many of Superman's powers and the 70 years worth of stories which have defined the character. Perhaps even worse, because DC would still maintain the copyright on the character, the original Superman would not be able to resemble the current Superman, nor utilize his logo or any other aspect of the character trademarked by Warner Bros. In essence, the character will have been gutted into two completely non-recognizable characters of little use to either party, and the world will lose one of the most popular fictional characters of all time. This result is clearly one not properly contemplated by the drafters of the Copyright Act who didn't foresee the effects of the interplay between the various exceptions to the termination provision and the other facets of intellectual property law. Indeed, Judge Larson himself noted that the Superman copyright exists as a "conglomerate"

77. See Gaiman v. McFarlane, 360 F.3d 644. 671 (7th Cir. 2004) (permitting a separate copyright for a medieval version of the Spawn character based upon the derivative works exception. The court found that once the character had been drawn, named and given speech that was sufficiently distinctive from the original character, it could be copyrightable as a derivative work). See also In re Marvel, 254 B.R. 817, 820 (Del. D.C. 2000) (finding that certain characters were sufficiently different from their original incarnation so as to justify separate copyrights for the purposes of movie adaptations). 2012 Copyright and Kryptonite 243 representing a story told over seventy years, and that "but for the results of this litigation itself, [those elements] are considered and mar- keted [as] part of an aggregate whole, not as tiny individual copyrightable bits (a red cape here, a particular villain there, x-ray vision and the ability to fly over here, an alter ego personality to peruse around the corner, or a far away doomed planet on the horizon.)"78 By trying to protect creators from bad bargains, the termination of transfers provision may have finally done what Lex Luthor and Brainiac never could; they may have destroyed Superman!

II. This Looks Like a Job for Superman!: Copyright Law as Kryptonite Considering the results of its application in this case, one can't help but question the efficacy of the termination provision. Perhaps more accurately, one can't help but question its efficacy in the face of three inconsistent principles of law that drastically undercut its restorative abilities. The first of these is the work-for-hire exception. Though ultimately not an issue in the Superman case, the work-for-hire exception has already reared its head in similar litigation involving the Marvel Com- ics character, Captain America.79 In that case, Joe Simon claimed that he had created the Captain America character on a freelance basis and sought to terminate the transfer of the copyright to Timely Comics, Inc. (now Marvel Comics, Inc.).80 The District Court rejected Simon's claims finding that the works had been a work-for-hire and thus the remedies provided by the termination provisions were unavailable.81 The decision was later reversed and remanded by Second Circuit Court of Appeals, decision pending.82 The future effect of the work-for-hire exception may depend very heavily on the outcome of Simon's case and the other cases from early comic book creators taking their lead from Siegel and Shuster. Pub- lishers will be less and less likely to look for independent material if they know that it could lead to legal battles down the road, a prospect

78. Siegel III, 690 F. Supp. 2d at 1068. 79. See Marvel Characters, Inc. v. Simon, 310 F.3d 280 (2nd Cir. 2002). 80. Id. at 281-2. 81. Marvel Characters Inc. v. Simon, 2002 WL 313865 (S.D.N.Y. Nov. 7, 2002), at *9, rev'd by, 310 F.3d 280 (2nd Cir. 2002). 82. Marvel Characters, 310 F.3d 280, at 293. 244 Duquesne Business Law Journal Vol. 14:2 that looks increasingly likely. Without independent creators, the mar- ket will quickly become stagnant and the quality of the work being produced will suffer dramatically.83 Ultimately, it is both the creative and the commercial atmosphere which is hindered by an overly- expansive application of the work-for-hire exception. Unless the courts fashion some way of reconciling the work-for-hire doctrine with the benefits of a freelance system, the comic book industry may quickly become monopolized by those few companies with a sufficient number of contracted artists and writers to keep publishing without the burden of future litigation. If that happens, then the intellectual property laws will have utterly failed in their mission to promote the distribution of creative works by becoming a barrier to their release. The second exception which operates directly counter to the termination provision is the derivative works exception. While it is un- doubtedly an important protection for certain types of artists, it fails to accommodate for serialized storytelling, where the creators change frequently. In the comic book world, the writers and artists often change on a month to month basis. In theory, based on the derivative works exception, a publisher could argue that a new derivative work is created every month when a new issue of the series is published because there are at least minor changes in style from one creator to the next. Though courts have required a certain degree of variation before permitting such an argument, exactly what degree is required remains undefined.84 If a publisher is able to meet that fuzzy standard with each month's publication, it will essentially hold an interminable copyright which is renewed with each publication. This too is clearly contrary to the goals of intellectual property law. Furthermore, beyond the obvious changes that are necessary to keep readers, comic books are notorious for reinventing and repackaging characters. Superman himself has seen multiple iterations, including a backwards version, a cyborg version, an electrical version, a teenage

83. See Lopes, Paul Douglas, Demanding Respect: The Evolution of the Ameri- can Comic Book, 100-03 (Temple University Press 2009) (briefly discussing the rise of independent comic book publishers and its effects on the industry). 84. See e.g. L. Batlin & Sons, Inc. V. Snyder, 536 F.2d 486, 491 (2nd Cir. 1976) (holding that there must be a "substantial variation" for a derivative work to be protected), but See Hearn v. Meyer, 664 F. Supp. 832 (S.D.N.Y. 1987) (quoting Batlin and emphasizing that the Second Circuit requires "true artistic skill" before it will grant copyright protection). 2012 Copyright and Kryptonite 245 version, and most recently a younger version of himself as part of a rebooted universe with changes to his back-story and origin.85 In fact, within the continuity of his own series, the original Superman was killed several years ago and the pre-reboot Superman that starred in both his self-titled book and Action Comics was a version from an alternate reality.86 Radical changes like this could give Warner Bros the right to claim that the Superman published today is only indirectly linked to the one that appeared in Action Comics #1. He has, after all, had 70 years to evolve. The application of the derivative works exception is similarly bur- dened by the creation of spin-off characters. One of the key characte- ristics of the DC Comics universe is the idea of a multi-verse, a fictional universe that contains an unlimited number of parallel and derivative realities. Thus, creators have the freedom to explore alternate versions of characters that couldn't exist within the established continuity of the main DC universe. Understandably, this has led to an unlimited number of characters who are, by their very definition, derivative of the original. The appeal of these characters, however, arguably lies in their similarity or dissimilarity to the original and thus they are not entirely separable from the original creation. Based on the plain meaning of the derivative works exception, each of these derivative characters is potentially eligible for separate copyrights. However, there is currently no consideration given to the fact that without the appeal of comparisons with the original, these characters are essentially useless. The most striking example of this principle at work is the case of Superboy, another character whose ownership is disputed by the Sie- gel heirs and DC Comics. The character was originally conceived as a teenage version of Superman, although his identity and origin have been repeatedly modified, much like Superman's.87 Jerry Siegel had disputed the rights to Superboy since his first appearance in 1938, and

85. See Dougall, Allistair, ed., The DC Comics Encyclopedia: The Definitive Guide to the Characters of the DC Universe (DK Publishing 2008) (providing in- formation on the many different iterations of DC Comics characters, including Su- perman). 86. Wolfman, Marv & Perez, George, Crisis on Infinite Earths, DC Comics (col- lected and reprinted 2001). 87. See Dougall, Allistair, ed., The DC Comics Encyclopedia: The Definitive Guide to the Characters of the DC Universe (DK Publishing 2008) (providing in- formation on the many different iterations of DC Comics characters, including Su- perman). 246 Duquesne Business Law Journal Vol. 14:2 his claims to the character had been discussed significantly in the original 1947 litigation.88 Most notably, the referee found that Siegel had proposed the Superboy character to the publisher and had been rejected. However, the publisher later published the story based on Sie- gel's idea, plan, and conception, but without his permission and well outside of the six week first-look option.89 The referee found in favor of Siegel.90 Speaking rather strongly against Detective Comics, the referee stated that it was "quite clear" to him that Detective Comics had acted illegally, and that the Superboy character was separate and distinct from Superman.91 Those findings were subsequently vacated as part of the agreement reached between the parties in 1948,92 and the fate of Superman and Superboy remained linked until 2002. In November, 2002, the Siegel heirs filed notices of termination exclusively directed at Superboy; District Court Judge Ronald S.W. Lew then held that the factual findings of the 1947 litigation were binding and that, in accordance with those findings, the termination was valid and that Joanne and Laura Siegel had successfully recaptured the Su- perboy copyright.93 Lew also noted that, in his opinion, the WB television series, Smallville, infringed that copyright although that issue was not before him.94 Subsequently, the court granted a motion for reconsideration and Judge Larson vacated that decision.95

88. See Siegel v. Time Warner Inc., 496 F. Supp.2d 1111, 1116 (C.D. Cal 2007) [hereinafter Siegel IV] (concisely outlining the findings of fact relevant to the Su- perboy character). 89. Id. at 1116-17. 90. Id. at 1116. 91. Id. 92. See Siegel I, 542 F. Supp. 2d at 1112. 93. Siegel IV, 496 F.Supp.2d at 1120. 94. Id. Smallville ran from 2001-2011 on the WB network, which later merged to become the CW network. The series depicted the adventures of a young Clark Kent, beginning with his high school years and proceeding through his early career. The series introduced numerous characters central to the Superman mythology including Lex Luthor, Lana Lang, Lois Lane, and many of Superman's most notable villains. Id. 95. Siegel IV, 496 F.Supp.2d at 1155. Of particular note is the fact that Larson did not decide the issue but merely established the opportunity for DC to establish that the differences between Superman and Superboy were merely trivial and not sufficient to have created a separate copyrightable character. Currently, the character is in limbo until this issue has been decided, although recent creative decisions, namely a line-wide reboot could conceivably allow DC to avoid the issue altogether by revising the character's origin, name, etc. 2012 Copyright and Kryptonite 247 The Superboy litigation is important because it illustrates the wide reach of the derivative works exception in this type of dispute. If the courts find that Superboy is sufficiently different from Superman to constitute derivative status, then DC stands to lose a valuable piece of the Superman mythology. Furthermore, adaptations, such as the Smallville series, become significant infringements on the copyright, rather than lucrative business prospects. Most troubling though is the precedential effect that such a decision would have; DC could infringe on this copyright merely by trying to publish any story about Super- man's early adventures as the various iterations of Superboy have left the character difficult to define as more than a teenage version of Su- perman. Furthermore, because DC has trademarked the character, such a decision would leave Superboy in much the same position as Superman, with two parties holding different rights which preclude publication by either party. Some courts have held that a character itself can be copyrighted, a fact which may help to prevent publishers from thwarting the normal copyright terms by perpetuating the copyright through derivative works and alternate versions of beloved characters.96 However, publishers are still likely to claim that the current versions of their characters are new characters altogether that share only a name or a likeness with the copyrighted character in question. Courts have fashioned tests to prevent against these problems, but none have yet addressed the particular prevalence with which works can become derivative in serialized narratives. Until they do, there is nothing to prevent publishers from building a fan base, replacing the creators, and then con- tinuing to reap the goodwill of the fans without deference to the original creation.97 Finally, the termination of transfers provision is particularly incom- patible with graphic narratives because of the simultaneous trademark protection often afforded to the images. While the copyright transfer can be terminated, the trademark associations cannot. This could, and

96. See e.g. Burroughs, 683 F.2d at 610 (recognizing Tarzan as a copyrightable character); Walt Disney Productions v. Air Pirates, 581 F.2d 751 (9th Cir. 1978) (recognizing Disney's animated characters as copyrightable). 97. Also worth noting in this situation is the potentially preclusive effect of a "Created by..." byline. As part of the original 1948 agreement, all Superman stories have credited Siegel and Shuster as the creators of Superman, a fact on which a court could rely heavily in determining whether alterations made to a character are merely natural steps in the character's evolution or sufficient to create a delineated, derivative work. 248 Duquesne Business Law Journal Vol. 14:2 has in the Superman litigation, led to one party owning the copyright to certain aspects (like the Superman shield) while the other party maintains the trademark rights in the same symbol. Thus, it is useless to both parties. The creator can't publish a story with the character's image and the publisher can’t publish anything but the image. Again, it is an absurd result which further illuminates the inadequacy of current intellectual property laws and the ill-fitting application of those laws to serialized graphic narratives. The incompatibility of trademark and copyright protection in regards to graphic characters is particularly evident in the case of Cap- tain Marvel, who, despite being published by DC Comics, bears the name of DC's biggest competitor, Marvel Comics. In 1952, National Comics (DC's predecessor) acquired the rights to Captain Marvel from Fawcett Publications.98 However, DC has been unable to nur- ture Captain Marvel to the level of success and notoriety he enjoyed when published by Fawcett due to DC's inability to use his name in advertising or promotion of the character because it infringes on Mar- vel Comic's trademark.99

CONCLUSION The termination of transfers provision, which is supposed to put authors in a better position than before, when applied concurrently with other provisions of intellectual property law can in fact put both the creator and the publisher in a worse situation. Characters that have been carefully coddled and nurtured into valuable properties could instantly lose all value if they are permitted to be hack-sawed into pieces of copyrightable material doled out to whoever happened to fill out the right paperwork. Once-potent trademarks, like the Superman shield and catchphrases, could be relegated to mere notations in the history of pop culture. Whether the law can adapt to account for ra- pidly multiplying forms of intellectual property like comic books and graphic novels remains to be seen, but what can be clearly seen from the state of the Superman litigation is that the present laws are irre-

98. Nat'l Comics Pub. v. Fawcett Pub., 191 F.2d 594 (2d Cir. 1951). After the judgment, the parties opted to settle the matter out of court. 99. The character is usually published under some variation of the title Shazam!, which is the magic word which allows Captain Marvel's alter-ego Billy Batson to transform into the costumed superhero. It is also the name of the wizard that gives him his powers. See Dougall, Allistair, ed., The DC Comics Encyclopedia: The De- finitive Guide to the Characters of the DC Universe (DK Publishing 2008). 2012 Copyright and Kryptonite 249 concilably at odds with each other when applied to graphic mediums and could threaten some of the most enduring characters in American pop culture. Contrary to their stated intent to promote the development and distribution of creative works, our current laws, at least in this context, can instead eviscerate those works and prevent them from ever being enjoyed by society. Furthermore, the litigation suborned by these conflicting principles of law has had an entirely impermissible effect on the creative decisions of comic book creators. Despite its repeated denials, it is clear that many of DC's creative choices have been motivated, at least in part, by a desire to avoid or limit the effects of litigation. Comic book creators have been tasked with changing character's origins, names, identities, and even the world from which they originate in order to delineate modern characters from their predecessors. Rather than being a beneficent force which encourages creativity and the cultivation of new ideas, copyright law has established a stranglehold on creators, mandating stories and ideas designed solely for the purpose of evading litigation. Clearly, this is in direct contra- vention of the principles of copyright law and should encourage heavy scrutiny into the effectiveness of those laws, particularly in regards to serialized graphic narratives.