Recovering your intellectual property: Joe Simon v. Marvel Comics
For the creator of intellectual property, be it music, a play or comic book, the issue of ownership is critical. In a later piece I will address “work for hire.” Here, we will discuss intellectual property originally owned by the creator.
In many instances, a creator does not have the resources to self-publish or produce and must relay upon others. Looking at comic books, the creator generally must play ball with a comic book publisher. (The great Billy Tucci showed how to successfully self-publish with his ground breaking character Shi, but that is a story for another day).
The comic book publisher generally want to gain control over the new comic and will require some type of licensing agreement or transfer of ownership. Under the Copyright law a creator can license some or all of his/her rights to a third party or even transfer all of their rights. But, that creator also has the right to terminate that license or transfer, called a “grant.”. When the creator can terminate that license or transfer depends on whether the agreement was signed before or after 1976.
To make this easy to understand, let's look at the case of Joe Simon versus Marvel Comics (Marvel Characters v. Simon 310 F.3rd 280 [2002]). Back in 1940's Joe Simon was a towering figure in the comic book industry when Stan Lee was just learning his trade. Among the many influential characters he created, Joe Simon conceived and wrote Captain America.
He created Captain America as an independent project and later sold it to Timely Comics, the predecessor to Marvel Comics for a fixed page rate plus a twenty-five percent share of the profits of the comic books. Simon created the second through tenth issues of Captain America Comics on a freelance basis, and orally assigned his interest in Captain America Comics and the Captain America.
Under the Copyright Act of 1976, the creator can terminate the license or transfer of rights. If the license/transfer was made after January 1978 then: “[t]ermination of the grant may be effected at any time during a period of five years beginning at the end of thirty-five years from the date of execution of the grant; or, if the grant covers the right of publication of the work, the period begins at the end of thirty-five years from the date of publication of the work under the grant or at the end of forty years from the date of execution of the grant, whichever term ends earlier.”
If the agreement was before January 1, 1978, then “[t]ermination of the grant may be effected at any time during a period of five years beginning at the end of fifty-six years from the date copyright was originally secured, or beginning on January 1, 1978, whichever is later.”
In 1966, and prior to the Copyright Act of 1976, Simon sued Marvel, and after much litigation, they reached a settlement. In the agreement, he agreed that Captain American was created as a “work for hire” and therefore it was completely owned by Marvel.
Fast forward to 1999. Simon decided to terminate the grant to Marvel, this time under the Copyright Act of 1976. But, wait, didn't Simon sign an agreement admitting that he created Captain American as a “work for hire?” If so, then didn't he give up all his rights as a creator?
Not so. There was a major addition to the Copyright Act of 1976 which changed the landscape. The statue states that “[t]ermination of the grant may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant.”
The Second Circuit Court of Appeals found “an agreement made subsequent to a work's creation which retroactively deems it a 'work for hire' constitutes an 'agreement to the contrary'. Therefore, Simon is not bound by the statement in the Settlement Agreement that he created the Works as an employee for hire.”
In other words, Simon's 1969 agreement stating that he created Captain American as a “work for hire” would not prevent him from terminating the grant.
The reason for this law, according to Congress is “because of the unequal bargaining position of authors, resulting in part from the impossibility of determining a work's value until it has been exploited.” Or put another way, the comic publisher, movies producer or music producer has the upper hand in any contract with the creator. This important provision allows a creator a second bit at the apple. The take away is that if a creator granted away his/her rights, they can still be recovered.
The reason for this law, according to Congress is “because of the unequal bargaining position of authors, resulting in part from the impossibility of determining a work's value until it has been exploited.” Or put another way, the comic publisher, movies producer or music producer has the upper hand in any contract with the creator. This important provision allows a creator a second bit at the apple. The take away is that if a creator granted away his/her rights, they can still be recovered.