DC Comics v. Pacific Pictures Corp.
By Dorothy Du – Edited by Daniella Adler
DC Comics v. Pacific Pictures Corp., No. CV 10-3633 ODW (RZx), (C.D. Cal. Oct. 17, 2012)
The District Court for the Central District of California ruled that the heirs of Joseph Shuster, the first illustrator of Superman, signed away their right to reclaim Superman copyrights in an agreement with DC Comics (“DC”). The court granted plaintiff DC’s motion for partial summary judgment.
The court held that a 1992 agreement between the Shusters and DC barred the Shusters from terminating copyright grants to DC. DC Comics, slip. op. at 7. The court also found that section 304(d) of the Copyright Act of 1976, which provides former copyright owners a termination right, did not apply. Id. at 5.
Ars Technica explains copyright termination doctrine and points out that Pacific Pictures Corporation is a joint venture owned by the defendants and their attorney in the case, Toberoff. The Los Angeles Times highlights the importance of the victory to Warner Bros., DC’s parent company. If DC had lost the case, the studio, which is releasing the movie Man of Steel next June, would have been unable to continue using certain elements of the Superman mythos.
Jerome Siegel and Joseph Shuster, the creators of Superman, assigned DC the exclusive right to use the characters and story in 1938. Id. at 2. After Joseph Shuster’s death in 1992, Jean Peavy, his sister and sole beneficiary, and Frank, his brother (collectively “the Shusters”), entered into an agreement with DC. Id. at 4. DC agreed to cover Joseph Shuster’s debts and pay Jean an annual survivor payment for the rest of her life. Id. at 4. In exchange, Jean and Frank re-granted all of Shuster’s rights over Superman to DC and agreed never to assert claims on those rights. Id. In 1999, Congress passed 17 U.S.C. § 304(d), which gave statutory heirs a right to terminate previous copyright grants only if the grant was made prior to January 1, 1978. Id. In 2003, the Shusters served a notice on DC to terminate the prior grants of Shuster’s Superman copyrights. Id. at 5. DC initiated this action in response.
DC’s first claim was that the Shusters’ termination notice was invalid. To determine whether 17 U.S.C. § 304(d) gave the Shusters a termination right, the court asked whether the 1992 agreement superseded the 1938 contract based on the parties’ intent. Id. at 6. The court stated that under New York law, parties can mutually decide to terminate an agreement “by expressly assenting to its rescission while simultaneously entering into a new agreement dealing with the same subject matter.” Id. at 6. Here, the court could determine the intent of the parties from the four corners of the text because the language of the 1992 agreement was unambiguous. Id. Pointing to specific terms in the contract, the court concluded that the 1992 agreement displayed Jean’s and Frank’s intent to supersede the 1938 agreement. Id. at 13. Therefore, section 304(d) did not apply because the grant was made in 1992, not 1938.
DC pled in the alternative that the agreements made between Pacific Pictures and the Shusters violated section 304(c)(6)(D) of the Copyright Act of 1976 and that therefore Pacific Pictures did not own the copyrights, even if the copyright grant could be terminated under section 304(d). Id. at 16. 17 U.S.C. § 304(c)(6)(D) provides that a subsequent grant of a terminated copyright grant is only valid if made after the effective date of termination. Id. The court found that because the agreements with Pacific Pictures would anticipatorily transfer copyrights recaptured by the Shusters to Pacific Pictures, the agreements were invalid to the extent they violated 17 U.S.C. § 304(c)(6)(D).
While DC Comics at first evokes sympathy for creators’ families, the court here is careful to point out that the heirs knew of the Copyright Act’s termination provisions when they entered into the 1992 agreement and that DC has paid the Siegels and Shusters more than $4 million since 1975. The case is a wise move in favor of increasing business certainty, settling rights, and decreasing unnecessary litigation.
Dorothy Du is a 3L at Harvard Law School.