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Oct 18 2012

Warner Bros. Beats Out Creators’ Heirs Over Rights to Superman

Warner Bros., which now owns publisher DC Comics, won a major legal victory on Wednesday against the heirs of Joe Shuster and Jerry Siegel, the co-creators of Superman. The family of the creators of the Man of Steel had sought to enforce their rights under a 1976, “termination rights law” that went into effect in US copyright law. This allowed creators to terminate a copyright grant given prior to 1978 so that they could renegotiate terms of contracts. As I have written about in this blog, many songwriters like Bruce Springsteen and Don Henley from The Eagles stand to make a lot of money from the return of rights they gave over to record companies long ago.

This belongs to Warner Brothers

In a 1975 agreement, DC provided Siegel and Shuster each with a lump sums of the equivalent of $17,500, lifetime annual payments of $80,000 each per year, survivor payments to their heirs, and insurance coverage, as well as “credits” on new Superman works. Siegel and Shuster acknowledged in the agreement that DC owned all Superman-related copyrights. There was then a lot of back and forth requests for more money from the heirs and the parties executed an agreement on October 2, 1992 under which DC would cover Frank Shuster’s debts of about $50,000 and pay Jean and additional $25,000 a year for the rest of her life. In exchange, Jean and Frank Shuster re-granted all of Shuster’s rights to DC and vowed never to assert a claim to such rights.In 1993, 1994, 1995, 1996, 1998, 1999, 2000, and 2001, DC provided additional bonuses to Jean, ranging from $10,000 to $25,00 while always adding in writing that it had no obligation to do so and was doing so essentially as a “gift.” Jean always wrote back and thanked DC for the “bonus” as she called it.

U.S. District Court Judge Otis D. Wright found that this agreement meant that the family could not terminate the copyright agreement with Warner Bros. and DC. Because of the language in the 1992 agreement, Wright found that the Shuster heirs could not end DC’s copyright to the character which now was permanent and never-ending. Basically, the court said you cannot eat your cake and have it too. The court said that because the 1992 agreement represented a full renegotiation of the rights to iconic superhero, it was a “post-1978” grant of rights and overrode the “pre-1978” grant of rights. A major mistake made by the heirs in 1992 obviously. Superman is perennial moneymaker that generated $500 million in revenue for Warner Bros.’ first five films with the character. The studio is currently working on Zack Snyder’s “Man of Steel.” That film will be out next summer and will likely be a blockbuster as well.

Record companies and other media moguls could now be searching through their files to see if these artists who have long been awaiting the return of their rights could have forfeited them by renegotiating for greater licensing fees along the way.

I just want to add a practice note to this. In the BBC, the Shuster’s family attorney was quoted as saying: We respectfully disagree with [the court’s] factual and legal conclusions, and it is surprising given that the judge appeared to emphatically agree with our position at the summary judgment hearing.” This is a common situation among litigators. They draft their papers and then go into oral argument. At oral argument, they say some brilliant things that may or may not be in their briefs. Either way, at the court session, it all looks to be going their way and then they are profoundly disappointed when the exact opposite happens. Here’s often why – the judge may take some notes (often it is their law clerks who do so as they sit by the side of the courtroom to hear the arguments). But at the end of the day, especially if there is no official transcript produced of the oral argument, the court relies almost exclusively on the written briefs and may have completely forgotten what was said at the argument weeks (and maybe months earlier). The court may also just be less persuaded after the passage of time and after re-reading the briefs. That is why it is essential that lawyers NOT rely at all on oral argument and make certain that their written briefs clearly and completely make their point. Otherwise they may find that their clients legal rights will have sailed “up up an away.” (Couldn’t resist).

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