This article first appeared in Entertainment Law Matters, a Frankfurt Kurnit legal blog.
Marvel Worldwide, Inc. v. Kirby, No. 10 Civ. 141 (CM) (KNF), 2011 WL 3207793 (S.D.N.Y. July 28, 2011).
On July 28, 2011, Judge McMahon of the Southern District of New York granted summary judgment in favor of Marvel and against the children of famed comic book creator Jack Kirby, who passed away in 1994. As reported in our earlier blog post, Marvel filed the action for declaratory judgment against the Kirby kids after they issued 45 notices to Marvel purporting to terminate, pursuant to Section 304(c) of the U.S. Copyright Act, their father's assignment of his copyrights in several prized comic books published by Marvel between 1958 and 1963, featuring the adventures of Spiderman, The Fantastic Four, Thor, The Incredible Hulk and The X-Men, among others.
In her recent decision, Judge McMahon held that the termination notices were void and without effect because the comics created by Jack Kirby were "works made for hire" under the 1909 Copyright Act, which governed the comics at issue. The Kirbys had claimed that their father had transferred his copyrights in the comics to Marvel when, in 1972, he executed an assignment to Marvel of all copyrights that he "may have or control." The Court, however, found that Kirby had no ownership rights to transfer to Marvel in the first place.
Most of the Court's decision focused on applying the so-called "instance and expense" test to determine whether the comics qualified as works-for-hire. Under this test, which applies to works published under the 1909 Copyright Act,1 the court first asks whether the work was made at the hiring party's "instance," meaning whether the hiring party – in this case Marvel – "had the power to accept, reject, modify, or otherwise control the creation of the work."
Relying heavily on deposition testimony by Stan Lee – the iconic, 87 year-old godfather of comic books who served as Marvel's editor during the relevant time period, as well as the testimony of other Marvel artists who appeared on behalf of the Kirbys, the Court found that "between 1958 and 1963 Lee had complete editorial and stylistic control over all work that Marvel published." Among other facts, the Court found that no comics were drawn until the stories, most of which were created by Lee, had been approved by Lee or Marvel's head publisher. Comics were not created "on spec" – that is, writers did not come up with their own ideas, draw the books and then present them to Marvel for sale. Rather, Lee assigned writers and artists to work on books, the ideas for which usually originated in Lee's imagination, Lee reviewed the works before they were published, and Lee had the authority to revise the works before publication and without further input from the artists.
It was also clear to the Court that the comics were created at Marvel's expense. Even though Kirby paid for his own equipment and supplies, set his own hours and paid his own taxes and benefits, these factors merely went to Kirby's status as an independent contractor (as opposed to an employee) – they had no bearing on whether Kirby was working at Marvel's expense under the work-for-hire test. The court held that "the 'expense' prong is satisfied 'where a hiring party simply pays an independent contractor a sum certain for his or her work.'" Given the undisputed fact that Kirby received a fixed fee per page and was never awarded royalties on comic book sales, there was no question that the comics were created at Marvel's expense.
So, at least for now, the superheroes will remain with Marvel.
Whether the Second Circuit will agree with Judge McMahon is a different story. According to a New York Times article, the Kirbys "respectfully disagree with the court's ruling and intend to appeal the matter to the Second Circuit."
Footnote
1. In Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989), the Supreme Court held that the "instance and expense" test does not apply to works created after the 1976 Copyright Act went into effect. Instead, under the current Act, courts must first determine whether, in light of agency law principles, the work was created by an "employee" or an "independent contractor." If the work was created by an employee, the work is generally considered a work made for hire. If, on the other hand, the work was created by an independent contractor, the work is considered to have been made for hire only if (i) the work falls within one of nine categories of works listed in the Act, and (ii) there is a written agreement between the parties specifying that the work is a work made for hire. Under the 1976 Act, it is likely that the Kirby comics would not have been considered works made for hire because Kirby was acting as an independent contractor and there was no written agreement between Kirby and Marvel specifying the comics as works made for hire.
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