In September 2009, the heirs of comic book artist Jack Kirby filed termination notices with the US Copyright Office for 45 Marvel characters and stories. The notices were sent under a law that allows authors and their heirs to terminate copyright deals even after a long delay. They were filed in an effort to end all transfers or licenses for the renewal copyrights, thus reverting those rights to Kirby’s heirs beginning in 2014. Some of the affected characters include the Incredible Hulk, Spider-Man, the Fantastic Four, and the X-Men.

Earlier this year, Marvel Characters Inc. (“Marvel”) filed a suit against Kirby’s heirs seeking a declaratory judgment that the termination notices were invalid. Marvel characterized the works as works-for-hire within the meaning of the Copyright Act because Kirby completed the work for Marvel as assignments from its editors and was compensated by Marvel for the work. As a result, Marvel claimed to be the sole owner of the copyrights in Kirby’s work.

At issue before the court is the identity of the copyright owner of Kirby’s works. If the court finds that Kirby was acting as an independent contractor when he created the works, then ownership would have vested in Kirby and the transfers to Marvel would be voidable by his heirs. On the other hand, if the court determines that the stories and characters were works-for-hire, Marvel would be the owner of Kirby’s works and Kirby’s heirs would be unable to seek termination of the copyright transfers.

Last month, Kirby’s heirs filed a motion to dismiss Marvel’s suit, claiming that the U.S. District Court for the Southern District of New York, does not have jurisdiction over all of the defendants. Marvel Worldwide Inc. v. Lisa R. Kirby, Case No. 1:2010cv00141 (S.D.N.Y Mar. 9, 2010). Marvel’s decision to file suit in New York was based on the fact that Kirby’s characters were created in New York and the termination notices were sent to Marvel’s New York offices. The heirs, however, argued that two of the four heirs are not subject to the jurisdiction of the court because they are not residents of New York and have no business contact, property, or other assets in the state. The motion further states that these two heirs are indispensable to the litigation, such that the case could not continue without them. The heirs filed their own declaratory relief action in the U.S. District Court for the Central District of California, which they claimed to be a more appropriate venue. Thus, the heirs further argued that a judgment by the New York court would create the risk of duplicative lawsuits and inconsistent verdicts.

A compelling reason to keep an eye on this case is its potential to clarify the circumstances under which a copyright owner’s heirs can recapture those rights subject to third party transfer or license agreements.