DC Comics v. Pacific Pictures Corp., --- Fed. Appx. ----, No. 12-57245, 2013 WL 6098416, C.A.9 (Cal.), Nov. 21, 2013 (NO. 12-57245)

In the most recent of a long line of comic-book copyright cases, the Ninth Circuit held that the heirs of Superman co-creator Joseph Shuster signed away their right to reclaim any Superman copyrights.

Shuster, along with co-creator Jerome Siegel, initially granted the copyright in Superman to DC in 1938. Following that grant, Congress passed the Copyright Act of 1976, pursuant to which an author and his surviving widow or children can recapture ownership and control of copyrights by terminating past assignments or licenses following a statutorily specified duration of time. The Act provides that authors and their successors may terminate a grant of rights “notwithstanding any agreement to the contrary.”

When Shuster died in 1992, he left no widow or surviving children—only his siblings, who made an agreement with DC whereby DC would pay Shuster’s debts and life-long pensions to his brother and sister in exchange for a grant of Shuster’s rights to DC.

Six years later in 1998, Congress amended the Copyright Act to allow heirs to terminate past assignments. In 2003, after learning that Siegel’s heirs had filed a notice of termination of Siegel’s rights in Superman, Shuster’s estate likewise filed a notice pursuant to the 1976 Copyright Act. DC filed a declaratory judgment action seeking a declaration that the termination notice was invalid.

According to § 304(c) under which the estate filed the termination notice, it could only terminate rights in a pre-1978 grant. The district court held that under New York law, the 1992 agreement superseded the original 1938 grant. Further, the court applied Milne v. Stephen Slesinger, Inc., 430 F.3d 1036, 1048 (9th Cir. 2005) (copyright-termination case involving the heirs of Winnie-the-Pooh creator A.A. Milne), and Penguin Group (USA) Inc. v. Steinbeck, 537 F.3d 193 (2d Cir. 2008) (termination filed by writer John Steinbeck’s heirs), to reject the defendants’ argument that the 1992 agreement constituted an invalid “agreement to the contrary.” Because there was no pre-1978 grant to terminate, the estate’s 2003 termination notice was invalid, and the court therefore granted summary judgment to DC.

In a relatively short opinion, the Ninth Circuit affirmed, holding that the 1992 agreement created a new assignment of rights, which was unaffected by the 2003 notice of termination. Relying on its reasoning in Milne, the plain text of the statute, and the legislative history of the Act, the court also held that the 1992 agreement could not constitute an “agreement to the contrary” because Congress did not intend for authors to be unable to extinguish a prior grant and replace it with a new one.

Circuit Judge Thomas dissented, pointing out that at the time the siblings executed the grant of rights, they had no power to terminate because the 1998 amendment had not yet been passed, i.e., prior to 1998 only widows and children—not heirs—had a termination right. Reasoning that the siblings’ agreement with DC did not constitute a novation, Judge Thomas concluded that the statutory right of termination in fact became part of Shuster’s estate and accordingly was not invalid.