USDC S.D. New York, July 28, 2011
- District court grants motion for summary judgment in favor of plaintiffs, comic book publishers, against defendants, the heirs of comic book artist Jack Kirby, finding that the works at issue were works made for hire under the Copyright Act of 1909, and that the plaintiffs owned the copyrights in those works. Therefore, the court held that the Notices of Termination issued by the defendants purporting to revoke Kirby’s assignment of copyrights were ineffective.
Plaintiffs, Marvel Worldwide, Inc., Marvel Characters, Inc. and MVL Rights, LLC, creators and publishers of comic books, brought suit against defendants, the heirs of comic book legend Jack Kirby who died in 1994, seeking a declaration that 45 Termination Notices under Section 304(c) of the Copyright Act sent by the Kirby heirs to defendants purporting to terminate Kirby's assignment of federally protected copyrights in a number of Marvel comic editions published between 1958 and 1963 (the Kirby Works), were a nullity, since Marvel, not Kirby or his heirs, owned the copyrights in the works that were the subject of the Termination Notices. The Kirby Heirs counterclaimed for a declaration that the Termination Notices were effective and that the heirs now controlled the copyrights in these works. On cross-motions for summary judgment, the court granted plaintiffs’ motion and denied defendants’, finding that there were no genuine issues of material fact, and that the Kirby Works were works for hire within the meaning of the Copyright Act of 1909 and, as a result, plaintiffs owned the copyrights in the Kirby Works and the Termination Notices did not convey any copyrights in the Kirby Works to defendants.
Jack Kirby had a long association with Marvel Comics as a freelance artist and played a key role in the creation of a number of iconic characters, including "The Fantastic Four," "The Incredible Hulk," and "The X-Men.” In June 1972, Marvel had Kirby execute an assignment to Marvel Management Company of any and all right, title and interest (specifically including any copyrights, whether statutory and at common law) that Kirby may have or control in any of the works Kirby created for Marvel. The assignment did not state that Kirby owned any copyright in the works, and in fact contained an acknowledgement that Kirby had created the works "as an employee for hire" of the owners of Marvel, the Goodmans. On September 16, 2009, the Kirby Heirs sent plaintiffs 45 Termination Notices purporting to terminate Kirby's assignment of his federally protected copyrights the Kirby Works. Negotiations between the parties were unavailing and plaintiffs brought the declaratory judgment action. On cross-motions for summary judgment, plaintiffs asserted that no disputed issues of material fact exist and that the undisputed material facts establish that the Kirby Works were "works made for hire" under the Copyright Act of 1909, which confers all federal copyright in a "work made for hire" in the employer. Defendants asserted that while disputed issues of material fact barred summary judgment in plaintiffs’ favor, none would prevent the court from concluding, as a matter of law, that the Kirby Works were not "works made for hire."
As a preliminary matter, the court dealt with a number of motions to strike by plaintiffs to disregard evidence offered by the Kirby Heirs intended to rebut the evidence offered by plaintiffs, including the deposition testimony of comic book icon Stan Lee, Marvel's editor during the period 1958-1963, when the Kirby Works were created. As the court noted, plaintiffs’ motion for summary judgment “rose and fell” on Lee’s testimony, although it was supplemented by three other witnesses who worked as artists or writers for Marvel during the same time as Kirby. In rebuttal, the Kirby Heirs offered the testimony of two witnesses who also worked for Marvel during the relevant time frame, as well as the testimony of two “experts.” One was a writer, archivist, and publisher in the comic book industry who was prompted by Jack Kirby's death in 1994 to produce a newsletter about Kirby's life and achievements. The other was a comic book writer, columnist, and historian who Jack Kirby hired as an assistant in 1969 – six years after the relevant period – to conduct research, co-author "letter pages" in Kirby comic books, and to assist Kirby with creating storylines for new comic book projects that Kirby was producing for DC Comics, not Marvel.
The court denied plaintiffs’ motion to strike the declarations and attached documents of defendants’ two nonexpert witness, rejecting their argument that defendants failed to supplement their discovery disclosures and finding that the two witnesses were known to plaintiffs and that the documents plaintiffs sought to have excluded either were made known to plaintiffs during discovery or, in the case of an article and chronology of the comic books that Jack Kirby worked on while with Marvel, not prejudicial to plaintiffs.
The court granted plaintiffs’ motion to strike the declarations of defendants’ expert witnesses for multiple reasons, any one of which alone would be sufficient, according to the court. The court found that the purported "expert" reports were merely factual narratives based on the expert’s review of secondary sources and interviews that attempted to reconstruct events about which neither man had first-hand knowledge. An expert may rely on hearsay in reaching his own opinion, but a party cannot call an expert to act simply as a conduit for introducing hearsay, under the guise that the expert used the hearsay as the basis of his testimony. The court also found that nothing either of the purported experts had to say concerned technical or scientific matters that lay jurors would need help to understand and their proffered testimony therefore was inadmissible as it related to matters that the trier of fact would be capable of understanding and deciding without the expert's help. Both experts also offered their "opinions" about the intent or motivations of Marvel and individuals that worked at Marvel – inferences that are outside the bounds of expert testimony. One of the experts also opined on the credibility of Stan Lee's testimony, concluding that it is more logical to believe that certain comic book characters were conceived by Kirby rather than by Lee and stating that he disagreed with the accounts Lee had given of the creation of “The Fantastic Four” in which Lee solely created the concept and characters and Kirby's role was limited to simply drawing up Lee's creation. The court fund that the “expert” had developed this opinion even though he was not present during discussions or plotting conferences between Kirby and Lee, and had no firsthand knowledge of how the Kirby Works were created. The opinion, without factual basis and based on speculation or conjecture, was therefore inappropriate material for consideration on a motion for summary judgment. The court also noted that by opining on the credibility of Stan Lee's testimony, the expert had improperly usurped the role of the jury and was therefore inadmissible.
After dispensing with plaintiffs’ motions to strike, the court set out the undisputed facts, including facts relating to the history of Stan Lee’s relationship with the Goodmans, the owners of Marvel Comics, as editor and art director. Lee was responsible for the creative editorial aspects of the comic books published by Marvel. As editor, he developed the ideas and stories for all of Marvel's comic books and all of Marvel's artists and writers reported to him. He assigned artists to work on comic books, edited or changed their work, set deadlines for the submission of work, and even gave artists direction and guidance about the stories they were assigned to draw. During the period 1958-1963, when the Kirby Works were created, Lee supervised the creation and publication of Marvel's comic books from beginning to end, and nothing was published without his approval. He reviewed every artist's work before publication and, because Goodman had final approval over everything Marvel published, Lee implemented Goodman’s requests for changes.
Lee also developed what become known as the “Marvel Method” for creating comic books, sometime in the 1950s. Under the Marvel Method, Lee did not write a detailed script for a story before assigning an artist to draw it, but rather gave the artist the general contours of the story he had in mind at a "plotting conference" or in a "plot outline." Lee gave the artist an outline of the plot, a description of the hero, and suggestions for how the story should look and the artist would draw the story along the lines of the main theme. After an artist completed the pencil drawings, Lee edited his work and added dialogue and captions. The court noted that while the Marvel Method gave an artist greater opportunity for input into the process of creating the characters and the stories, artists did not create work "on spec," but only began to draw "pages" when they received an assignment and plot synopsis from Lee. The artists were constrained by Lee's plot outlines and he retained the right to edit or alter their work, or to reject the pages altogether and not publish them if he did not like them.
Between 1958 and 1963, Kirby worked on numerous comic book stories for Marvel. He received his assignments from Lee and did not draw art for Marvel without first receiving an assignment. Like other artists who worked for Marvel at the time, Kirby created his artwork based on plot outlines or scripts provided by Lee. At plotting conferences, Lee had the final say as to what was included in the comic book and he had to approve Kirby's artwork before publication, had the authority to require changes or edits to Kirby’s work, and would occasionally ask Kirby to make changes, which Kirby always did. The court also noted that between 1958 and 1963, all of Marvel's freelance artists and writers, including Kirby, were paid flat per-page rates for artwork and scripts they produced, and Kirby never received royalties for his work. No evidence established any contemporaneous written contract between Marvel and Kirby relating to any of the Kirby Works and from Lee's testimony, the court found that Kirby was a freelancer who was retained to create comic book artwork at Lee's instance and was paid an agreed-upon fee for doing so.
In the spring of 1972, Marvel and Kirby executed a written agreement that assigned to Magazine Management Company (a Marvel predecessor) "any and all right, title and interest [Kirby] may have or control" in all the work that Kirby created for Marvel. Specifically, Kirby assigned to Magazine Management Company:
- Any and all MATERIALS, including any and all ideas, names, characters, symbols, designs, likenesses, visual representations, stories, episodes, literary property, etc., which have been in whole or in part acquired, published, merchandised, advertised and/or licensed in any form, field, or media by the Goodmans, their affiliates, and/or their predecessors or successors in interest . . . .
- Any and all RIGHTS, including any all copyrights, trademarks, statutory rights, common law rights, goodwill, and any other rights whatsoever relating to the Materials in any and all media and/or fields including any and all rights to renewal or extension of copyright, to recover for past infringement and to make application or institute suit therefore, and including by way of example and without limitation Kirby's claim to renewal copyright in Volume 2, Nos. 1-10 of the work entitled "Captain America Comics," these being evidenced by Registration Nos. R429502, R446534, R446535, R446536, R446537, R446538, R446539, R446540, R446541, and R448324 in the United States Copyright Office.
While Kirby assigned whatever right, title or interest (including copyrights) he may have, the agreement contained no representation that he, in fact, had any right, title or interest to convey and contained explicit language intended to negate any suggestion that Kirby actually owned any federally protected copyright in his artwork: “Kirby acknowledges and agrees that all his work on the MATERIALS, and all his work which created or related to the RIGHTS, was done as an employee for hire of the Goodmans.”
Considering the cross-motions for summary judgment, the court began by noting that the Copyright Act of 1976 gives authors or their heirs a nonwaivable right to terminate a prior assignment of copyright at any time during (1) a five-year period that begins on January 1, 1978, or (2) fifty-six years after the date the statutory copyright was originally secured, whichever is later. The defendants, the Kirby Heirs, purported to exercise this right by sending Marvel the 45 Termination Notices relating to the Kirby Works. They asserted that that Marvel acquired the federal copyright in the Kirby Works through the 1972 assignment. The court found the fact of the assignment “not conclusive,” however, noting specifically that the assignment was couched in language assigning whatever rights (including copyrights) Kirby may have, without making any definitive statement about what rights he actually did have. The assignment also describes all of Kirby's work for Marvel, including the Kirby Works, as work done by Kirby as "an employee for hire of the Goodmans," the owners of Marvel – a situation which, if true, would mean that Marvel, not Kirby, owned the federal copyright all along.
According to the court, then, the question was whether under well-settled Second Circuit precedent, the Kirby Works were works made for hire. If they were, the Termination Notices were ineffective – works made for hire are statutorily exempt from termination because the holder of the copyright, the employer, is the statutory author of the work. The burden of raising the presumption that the Kirby Works were works made for hire rested with plaintiffs, and if they raised the presumption, they would be deemed the author unless the Kirby Heirs rebutted the presumption, which they could only do so if they proved, by a preponderance of the evidence, that Kirby and Marvel had a contrary agreement, either written or oral. If defendants failed to raise a genuine issue of material fact on this score, plaintiffs were entitled to summary judgment.
Because the Kirby Works were published between 1958 and 1963, the Copyright Act of 1909 controlled whether they were works made for hire. Under the 1909 Act, the term "author" included "an employer in the case of works made for hire.” An employer who hired another to create a copyrightable work is the author of the work for purposes of the statute, unless an agreement to the contrary exists. While the terms "employer" and "works made for hire" were not defined in the 1909 Act, for commissioned works, courts generally presumed that the commissioned party had impliedly agreed to convey the copyright, along with the work itself, to the hiring party. Courts also explicitly extended the work-for-hire doctrine to works commissioned from independent contractors, rather than created by employees, as well as expanding the definition of employer to include a hiring party who had the right to control or supervise the artist's work.
The Second Circuit adopted the "instance and expense" test – a two-pronged test to determine if a "work is made for hire" under the 1909 Act. The copyright belonged to the person at whose instance and expense the work was created, and an independent contractor is treated as an employee under the statute if the work is made at the hiring party's instance and expense. A work is deemed made at the hiring party's instance and expense when the employer induces the creation of the work and has the right to direct and supervise the manner in which the work is carried out. The hallmark of an employment for hire is whether the employer could have exercised the requisite power to control or supervise the creator's work, even if it never exercised that power. According to the court, the Second Circuit's jurisprudence created an almost irrebuttable presumption that any person who paid another to create a copyrightable work was the statutory author under the work for hire doctrine.
The court concluded that the undisputed facts established that the Kirby Works were created at the instance and expense of Marvel and, therefore, Marvel is presumed to be their author and holder of the statutory copyright as a matter of law.
With respect to the “instance” prong of the test, under Second Circuit precedent, when the motivating factor in producing the work was the employer who induced the creation, then the work is made at the hiring party's "instance." The test is not a 'but for' test – that but for the artist's employment the work would not have been created – but rather a more narrow inquiry focused on the nature and scope of the parties' business relationship, and the courts focus on the degree to which the hiring party had the right to control or supervise the artist's work. Whether the hiring party had the power to accept, reject, modify, or otherwise control the creation of the work is relevant to whether the work was created at the "instance" of the hiring party. Complete control over the creator's work is not necessary; the greater the degree of supervisory power and control over an independent contractor, the more likely it is that the work was created at the commissioning party's instance.
The court reasoned that the record allowed for only one conclusion: Kirby did not create the Kirby Works unless Stan Lee assigned him to do so. As the court noted, not only did Lee so testify, but Kirby's son Neal had also testified that his father didn't do work on speculation, but rather got paid by the page. Although Neal Kirby testified that his father did pitch ideas to Marvel, he did not draw a comic book story until he had received approval for that story or was assigned to that story by Lee or Goodman. Kirby's refusal to work "on spec," was consistent with how other Marvel freelance artists operated at the time. Goodman and Lee were responsible for hiring artists to create work that Marvel could publish. Plaintiffs’ other witnesses also testified that artists did not work on comic book pages before receiving an assignment, that assignments to write scripts came from Lee, and that Lee was responsible for deciding which writer was assigned to a particular comic book script. Lee also testified that Marvel did not purchase work created "on spec." The declarations of defendants witnesses, three other freelance artists who were contemporaries of Kirby, didn’t create an issue of fact the “instance” element, because all three stated that payment for their work was contingent on approval of the work by Lee, and none stated that he worked on spec.
The court found it undisputed that at all times between 1958 and 1963 Lee had complete editorial and stylistic control over all work that Marvel published. He supervised the creation of Marvel's comic books from conception to publication. He had authority to ask artists to revise or edit their work before publication – which he frequently exercised – and if Lee did not approve of the artist's work, it was not published. Kirby was no exception; Lee edited Kirby's work and reviewed and approved all of his work prior to publication. Lee's testimony was consistent with the recollection of Kirby's daughter, Susan Kirby, who testified that Lee asked her father to redo pages. Lee also generated the plot or synopsis from which an artist created the pencil drawing for each assignment and he assigned an artist to draw a comic book after he had either described the premise in a plot outline or plotting conference, or provided the artist with a detailed script. He created the plot and dialogue for the characters after the pencil drawing was completed and often ignored any margin notes submitted by the artist with suggestions as to the plot or dialogue in the story. The court also noted that Lee's testimony was corroborated by both documentary evidence and testimony from other artists and writers who worked for Marvel during the 1950s and 1960s. Plaintiff produced a plot outline for the first issue of "The Fantastic Four" comic book, which gave the artist a detailed narrative of the story to be drawn, including the number of pages the artwork should consume. Kirby produced the pencil drawing for that issue.
Defendants argued that Kirby did not have a contractual relationship with Marvel – no written contract setting forth the terms of their arrangement existed – and therefore Marvel lacked the legal right to control Kirby's work. The court found the argument “entirely unpersuasive.” That no written contract existed did not, as a matter of law, mean there was no contractual relationship – an agreement to draw a picture in exchange for payment creates a contract, whether the agreement is reduced to writing or not – and no written contract is needed to satisfy the "instance" prong of the instance and expense test. Courts focus on the actual relationship between the parties and whether the hiring party could have controlled or supervised the creator's work, and the hiring party's ability to supervise and edit an artist's work does not need to be based on terms set out in a written contract. The undisputed facts illustrated that, Marvel, through Lee, gave artists assignments, reviewed their work, and made changes when necessary – Marvel controlled and supervised all work that it published between 1958 and 1963.
To qualify as a work made for hire under the 1909 Act, the Kirby Works must also have been created at the expense of the hiring party – Marvel. While the parties do not dispute that Kirby provided his own tools, worked his own hours, paid his own taxes and benefits, and used his own art supplies, the court found that these facts – and the declarations of the other three artists in which they state that as freelance artists they worked from home and paid for their own supplies –were relevant only to the issue of whether an artist worked as an employee and not an independent contractor, and had no bearing on whether the work was made at the hiring party's expense. Under Second Circuit precedent, the "expense" requirement is satisfied where the hiring party simply pays an independent contractor a certain sum for his work. The focus is on who bore the risk of profitability in the work. Where the creator of a work receives royalties as payment, that method of payment generally weighs against finding a work-for-hire relationship. The court found it undisputed that Kirby was paid a fixed per-page fee for all work that Marvel published—including the Kirby Works – and that the works were created at Marvel's expense.
The court rejected the Kirby Heirs argument that Kirby bore the risk of his work's profitability because Marvel was not legally obligated to purchase all the work that Kirby submitted, and on occasion rejected Kirby's work, or asked him to revise it, and that he was not paid any "turn down fee" or any extra amount if he was required to revise a drawing. Existing precedent disfavored defendants’ argument and favored plaintiffs’ rebuttal – that the relevant question was which party bore the risk of the profitability of entire project, that is, the risk that the published comic book would not sell. According to plaintiffs, Marvel bore that risk. It hired the team of artists who created the comic book and paid them a flat fee before publication, as well as bore the cost of printing the comic book, irrespective of whether the comic book made a profit. The court concluded that while Kirby’s contribution to creating the comic books at issue was plainly critical, Kirby took on none of the risks of the success of the many comic books he helped produce, and Marvel bore the risk of its failure.
The court also found that defendants failed to rebut the work-for-hire presumption. The Kirby Works were created at Marvel's instance and expense and Marvel is presumed to be the "author" of the Kirby Works and the original owner of the copyright in those works. While the presumption can be overcome by evidence of a contrary agreement, either written or oral, the Kirby Heirs did not meet their burden to demonstrate by a preponderance of the evidence that a contrary agreement existed – the Kirby Heirs adduced no admissible evidence justifying a finding or raising a genuine issue of fact that Kirby and Marvel agreed that the Kirby Works would not be "works made for hire."
The defendants’ argued that three documents constitutes the necessary evidence to the contrary sufficient to justify the conclusion that Kirby and Marvel did not intend a work-for-hire relationship: (1) the 1972 assignment agreement between Kirby and Marvel, (2) checks issued between 1973 and 1974 by Marvel to freelance artists other than Kirby, and (3) a 1975 employment agreement between Kirby and Marvel. The court rejected the Kirby Heirs argument that these documents demonstrated an understanding that Kirby, not Marvel, originally owned the federal statutory copyright in the Kirby Works, and that Marvel acquired those copyrights through the revoked assignment from Kirby, finding instead that the documents on which the Kirby Heirs rely were not evidence to the contrary of the presumption, but proved conclusively that the Kirby Works were works for hire.
With respect to the 1972 assignment, the court found that defendants’ argument – that the agreement necessarily showed that Marvel knew Kirby owned the copyrights in his works prior to the document's execution, otherwise it would be superfluous – had been repeatedly rejected by the courts. The fact that the 1972 agreement assigned to Marvel whatever right, title and interest Kirby had at that time in the copyrights to the Kirby Works did not mean that the works were not created as "works for hire" within the meaning of the 1909 Act. The agreement only purports to assign whatever right, title and interest Kirby may have in the Kirby Works, but did not contain any language acknowledging that Kirby actually had retained any federally protected copyright in those works at the time he created them. The 1972 agreement did contain Kirby's admission that he created the works as an employee for hire of Marvel's owners—definitive language that, according to the court, “completely eviscerates the Kirby Heirs' claim that the agreement constitutes evidence of an understanding that the Kirby Works were not works for hire.”
The court also found unpersuasive defendants’ argument that the language of the 1975 employment agreement indicated that, as late as 1975, Marvel believed its relationship with its freelance artists was premised on the purchase of work and the assignment of copyright, and not on the work-for-hire doctrine. The employment agreement – executed literally on the eve of passage of the 1976 Copyright Act under which Kirby's future work would not have qualified as work for hire in the absence of such an agreement — was not evidence that Kirby and Marvel intended for Kirby to retain any federal copyright in his work at the time he created it. The 1975 Agreement could not be an agreement to the contrary because it related to work that was going to be produced between May 1975 and May 1978, not to the Kirby Works, created between 1958 and 1963.
Finally, the court found that while there was no real need to consider the other evidence presented by the Kirby Heirs, the other documents – checks for payment from 1973 and 1974 – added nothing of substance to their contentions. Not only were no checks from the relevant time period produced, but the checks that defendants did produce all bore legends that did not contradict the fact that the work created by freelancers was work for hire. The court declined to infer whether – and what – legend checks from the relevant time period might have included, and found that the language in the legend on the checks from 1973 and 1974, which assigns to Marvel the copyright in the work, was not dispositive of whether a work-for-hire relationship existed under the 1909 Act.
As the court concluded, none of defendants’ evidence made “so much as a dent” in the "almost irrebutable" presumption that the Kirby Works were works for hire. The Kirby Heirs were not entitled to summary judgment nor had they have not raised any genuine issue of fact. The 45 Termination Notices had no effect, because Marvel owned the federal statutory copyright in the Kirby Works by virtue of its status as their "author" under the work-for-hire doctrine.