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DC Comics wins crucial victory in Superman legal battle

From Action Comics #1

Handing a major victory to DC Comics, a California federal judge has ruled the heirs of Superman co-creator Joe Shuster surrendered the ability to reclaim their 50-percent interest in the property in a 1992 agreement with the publisher.

While the decision likely will be appealed, for now it means DC and parent company Warner Bros. can use the Man of Steel any way they wish beyond Oct. 26, 2013, when the Shuster estate would have recaptured its copyright to the first Superman story in 1938′s Action Comics #1. However, the companies must account for any profits earned from the property with the family of co-creator Jerry Siegel, which reclaimed its share in 2008 through a provision of the U.S. Copyright Act (the scope of that decision is on appeal). Had the Shuster estate succeeded, DC and Warner Bros. eventually would have been unable to use many of the character’s defining aspects, including his secret identity, his origin, certain elements of his costume and powers (super-strength and super-speed), and Lois Lane — barring a new agreement with the families of the two creators, naturally.

On Wednesday, U.S. District Judge Otis D. Wright granted DC’s motion for partial summary judgment on the issue of whether the Shuster estate’s 2003 copyright-termination notice was invalidated by a 20-year-old agreement with the late artist’s sister Jean Peavy. The publisher had argued the family relinquished all claims to the Man of Steel in 1992 in exchange for “more than $600,000 and other benefits,” including payment of Shuster’s debts following his death earlier that year and a $25,000 annual pension for Peavy.

Although Wright appeared somewhat swayed by the argument made last month by Shuster attorney Marc Toberoff that DC never intended the “ambiguous” document to transfer ownership of copyright to “a billion-dollar property,” the judge ultimately found “that the 1992 agreement, which represented the Shuster heirs’ opportunity to renegotiate the prior grants of Joe Shuster’s copyrights, superseded and replaced all prior grants of the Superman copyrights.”

Indeed, Wright noted that when DC increased survivor benefits from $5,000 to $25,000 a year, Peavy said she understood and agreed to the admonition from then-Executive Vice President Paul Levitz that, “this agreement would represent the author/heir’s last and final deal with DC, and would fully resolve any past, present, or future claims against DC.” The judge also pointed out that under a 1975 agreement with Siegel and Shuster, DC provided each of the two creators with lump sums (in today’s dollars) of $75,000 and lifetime annual payments of $80,000, survivor benefits and insurance — “as well as ‘credits’ on new Superman works” — amounting to more than $4 million (not counting medical benefits and “bonuses”).

In a statement to The Hollywood Reporter, Toberoff, who also represents the Siegel family, said, “We respectfully disagree with its factual and legal conclusions, and it is surprising given that the judge appeared to emphatically agree with our position at the summary judgment hearing.”

The trade paper suggests, however, that Toberoff may find cause for appeal in Wright’s comment that, “The broad and all-encompassing language of the 1992 agreement unmistakably operates to supersede all prior grants.”

Still ahead is a Nov. 5 hearing before the 9th Circuit Court of Appeals in which DC will argue the 2008 ruling that found the Siegel family had reclaimed its stake in Superman should be overturned. Toberoff will also seek to define precisely what elements of the characters are covered by the decision.

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25 Comments

I don’t understand why they wouldn’t be able to use certain powers. It’s not like there aren’t a hundred other comic book characters with Super Strength and/or Super Speed. You want to take origins and names away I understand that but I didn’t think you could own the rights to those power sets.

no doubt an appeal will be filed even though sadly another judge will rule that the agreement shusters sister made for a pension and they give up any legal claims. at least siegels estate managed to claim their share and dc and warners has to work with them on supes. for this ruling is just one battle in the no end in sight war on superman.

That’s certainly a glass half-full way of looking at things…

I’m hoping that a failure to retrieve the Shuster half of the rights will force Toberoff to come to some settlement with DC that will get compensation to Siegel’s daughter soon rather than later. If he and DC had their way, this would be tangled up for years. She doesn’t have that long.

This is utterly shameful. DC (and Marvel/Disney with regard to the Kirby heirs) ought to do the right thing for the Siegel and Schuster families… for a fraction of what it probably costs them in legal fees.

“DC provided each of the two creators with lump sums (in today’s dollars) of $75,000 and lifetime annual payments of $80,000, survivor benefits and insurance — “as well as ‘credits’ on new Superman works” — amounting to more than $4 million (not counting medical benefits and “bonuses”).”

I don’t understand, how was this not a good deal? They could have ended up with nothing which is what a lot of comic creators had.

Anyon read Marvel The Untold Story yet? It’s a fascinating and surprisingly unflattering picture of the House of Ideas. It seems like many of the early guys got bum deals.

Chancius-
It was a case of too little too late. they did that just before the Christopher Reeves movie to avoid the bad press and quell the increasingly riotous voices of the comics creators talking about it to anyone that would listen. Joe was already in serious debt and in a nursing home by the time he got any money from DC.

Ahhhh…. Thanks for the insight!

Among other things, this is another reminder that it was kind of a blessing that my father died broke. There was no incentive for anyone to start arguments or call lawyers, at all.

Facts are that Joe Shuster signed away their rights in 1992, basically doing the same thing he did and had they not made any new deals with Dc comics, they would probably be sitting pretty right now as the rights to Superman would be coming back to them.Life’s not fair, as Joe Simon so learned, after first taking Marvel comics to court over the rights to Captain America, then when the company offered him a giant out of court deal, he signed away his rights and took the money.

Funny thing is, several years later Joe Simon would take Marvel to court again, only to be told by the judge that in the deal he made with Marvel comics awhile back, he gave up his rights and signed it all away.Joe Simon was shocked and cried foul but a deal was a deal.Same situation here.Joe Shuster heirs signed away their rights to Superman, instead of waiting for the law to change in their favor to get him back.They took the money and signed the legal documents.

I’d be on their side right now, if I had not gotten all of the facts.I feel sorry for them for being naive enough to sign away their half of the Superman copyright.If I was in their shoes, there is no way I’d sign a new deal with Dc comics and give up my piece of the pie to the most iconic comic book super hero in the world. I’m a comic book artist who have been blessed to have created so many awesome characters and all of this legal copyright drama is a good learning thing for every other artist out there.Be smart and never sign away all of your rights to your characters to any company, unless you want to and created it specifically for that said company.

Good for DC! I am sick of hearing about these stupid court cases. Shuster and Siegel created one of the best comic creations ever. They did it for money, which they were paid. To say their families should get paid for work they didn’t do is really ridiculous.

I want today to be Nov 4 2013.Come on, already.let’s hear the judgement.

I mean Nov 5, 2012. Ooops..

What difference will it make after December 2012 when the world ends, I ask you?

So Batman made 3 billions dollars for Warner, and Superman could make an amount similar to it if the new movie succeeds. Not to mention all the money they’ve made throught out the decades.
How come that people think that a 600.000 dollards agreement with people who are in no position to negotiate something better is a fair amount?

Federal law: “If the creators of the work are deceased, any legally adopted heirs, or legal blood heirs are seen AS THE LEGAL CREATORS OF THE WORK. this goes for legal wives, as well as nieces, nephews, and great, great grand children.” From both the trademark website, and the copyright dept website.–they had every legal right to file a simple termination of copyright.

this was a bought and paid for judge. who sided with a company run by idiots who weren’t even in diapers yet when superman turned twenty years old. NO ONE CURRENTLY AT DC comics, or Warner was even a gleam in anyone’s eyes, at the time superman was created, or sold. they have zero rights to something they did not create, and that clearly was not work for hire. as the character was created in 1932, and sold to DC in 1938. –the siegal family won their termination of copyright in 2008, which goes into effect next year/2013. –DC does not fully own superman. they own shusters portion. we don’t need a superman who can fly…i would much rather a superman who can leap, and who has a values system again.

Brian from Canada

October 18, 2012 at 2:44 pm

Defiance: based on the article, the judge interpreted that federal law as pertaining to all works who have not had further agreement on ownership beyond the original purchase agreement. In music, for example (which is what that extension HAD been written for), the legal creators may refuse any negative use of their work but have no say as to who gets to use their work because that right belongs to the new owner.

In the case of Siegel & Shuster, a second agreement was made in 1975 to make up for past royalties and set a market-acceptable agreement for future royalties. Technically speaking, they received the fair compensation they were owed then.

But Shuster went back to the well in 1992 — four years before the law was changed — and signed an agreement that gave DC perpetual rights to the character in exchange for compensation. And the judge took this to mean that, by this point, Shuster understood that the character had a certain commercial value from which the compensation was decided on.

In other words, you can’t charge me $600,000 a year for the use of your character and then, five years later, take it back and let the lawyer demand $1,000,000 because the law allows you to: it’s bad business practice and unfair to WB/DC, who made the deal on the idea that the character was worth x at the time and the best royalty was y.

The law was well intended but ill written. But I don’t blame the judge on this. Nor do I blame them for going the way they did with Joe Simon either. It’s one thing to sign an original agreement and be screwed on it; it’s another to sign an original agreement, make further agreements, and then say the law now allows you to withdraw the last one for something better because you decide it to be.

Brian from Canada

October 18, 2012 at 2:50 pm

Steve:

I guess that’s not been made clear. The copyright is for the story in ACTION COMICS #1 — and *ALL* aspects of the story within.

This means the owners get the name Superman, the name Clark Kent, the love interest Lois Lane, the super strength, speed and ability to leap tall buildings in a single bound, as well as the reporter angle.

This means the owners do not get The Daily Planet, Perry White, Jimmy Olsen, Lex Luthor, Metropolis (the city), Krypton, kryptonite, Krypto or any of the other aspects introduced later.

In order for DC to use what’s owned, they will need to license it. In order to use what came later, it’s already theirs.

But the dilemma over ownership now surrounds derivative characters. Toberoff has already filed for ownership of Superboy (as a derivative version of the same), Supergirl, etc. because they all reference the original concept clearly without confusion.

It’s for that reason that Legion Of Super-Heroes (the animated series) used “Superman” instead of “Superboy”: they knew how much to pay for Superman, but they might have to pay a different royalty by agreement for Superboy.

Can’t believe I’m breaking my own code of “no-swearing” on these comments, but–DAMMIT, I WANTED THEM TO WORK OUT A CO-OWNERSHIP DEAL!!! THAT WOULD’VE ENDED THIS STUPID FIGHT WITHOUT ONE SIDE OR THE OTHER BEING THE LOSER!!!

First of all. Superman wouldn’t change. It would just mean dc would have had to negotiate a deal for the heirs. Secondly, this horse crap went on for 50 + years. No one figured the laws would change. It wasn’t till recent that the superhero film’s were more than a rare novelty. They had old men who didn’t make any money in nursing homes and funeral costs and had to pay for all this. 600,000 was likely the best you were gonna get. And they needed the money. The companies, instead of doing something honorable like a pension a decade earlier for these creators, low balled the families. That’s why no one should take a photo with Stan the scam Lee. He should have come out and said, decades ago “no one expected this industry to do what it’s done, let’s tally with those creative talents” instead he used people and set up vague sweet deal contracts for himself.

I still suspect the Siegel suit will end in the manner of the Spawn Gaiman / Mcfarlane suit. In short Siegels will own anything they can prove existed before S&S sold Superman to DC. But – that will be the 1930′s version of Superman, ie the later versions that can fly & has heat vision, will be seen as a distinct character.
Lois Lane love interest reporter will be Siegels, but Lois Lane not love interest tv reporter will be DC’s. Seigel’s will own the suit with the simple S red trunks and yellow belt. Whereas New 52 look Superman is a new character for the purposed of argument.

Money hungry family is all this sounds like to me. Sorry, but all I see is them trying to take away something that they haven’t the right to do so.

Tim

you’re confusing the family with DC.

@Brian from Canada
One correction: Action comics #1 does not have a “Lois Lane” It has a “Lois”. I’m honestly not sure If Larson gave them “Lois Lane” or just “a Lois”, but I’m certain this will be clarified post appeal (Siegels). I’m not confident that many of Larson’s rulings will stick (superman 1 and the 12 comic strips). This Battle will come back down to AC #1, the promo ads and most likely AC #4.

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