Intellectual Property

But Who Will Avenge The Avengers? How The Marvel Method Deprived The Visionary Behind Marvel’s Most Famous Characters From Enforcing His Rights

The world is waiting for the next hero (or his or her heirs) to smash this flawed method of analyzing putative works-for-hire in a Hulk-like fashion. 

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With Avengers: Infinity War sucking up over $600,000,000.00 at the worldwide box office over the weekend, now seems like the perfect time to explore the vicious and long-running copyright saga involving Marvel Comics, the rightsholder to the Avengers and the other heroes of the Marvel Cinematic Universe, and the writers and illustrators responsible for creating the characters populating that Universe.

Arguably the most famous of those tussles was the case in which Marvel sued the heirs of Jack Kirby to ensure that his heirs could not enforce Kirby’s copyright transfer termination right under the Copyright Act. Kirby was the visionary responsible for creating almost the entirety of the Avenger squad, including Captain America, the Hulk, Iron Man, and Thor. Unfortunately for Kirby and his heirs, he toiled literally in a basement as a lowly freelancer for Marvel, creating his masterpieces under the watchful eye of the then Marvel-overseer and now master of cinematic cameos, Stan Lee.

The Marvel v. Kirby legal dispute sought to adjudicate who would enjoy the copyrights in 262 original works that Kirby had created or co-created in the 1950s and ’60s, including the big dogs mentioned above. Legally, it revolved around section 304(c) of the Copyright Act, which provides relief for creators like Kirby who, given their bottom-rung position and lack of bargaining power, transferred away all ownership rights to their creative works without much compensation only to later see those works exploited for hundreds of millions of dollars. In such situations, section 304(c) allows for certain copyrights, other than those in works-for-hire, to be recovered by the artist who had earlier transferred them away for relative bupkus. The artist can then negotiate to receive the market value for their work. Notably, the provision allows for “widows and children” to enforce the creators’ rights.

And, when Kirby’s family attempted to do just that, Marvel hammered them with a federal lawsuit that claimed that Kirby’s creations were all works-for-hire that inured to the benefit of Marvel. And that Kirby, and his heirs, were entitled to exactly nothing.

The case was as fiercely fought as Ironman v. Captain America’s battle royale, but in the end (in terms of court decisions), Marvel emerged victorious. Its weapon of choice was the “instance and expense” test, which the Second Circuit found clobbered the Kirby heirs’ puny copyright recovery right.

The court, noting that works-for-hire are specifically excluded under Section 304(c), found that Kirby had created his characters at the “instance” — the request or inducement — of Marvel and that Marvel had borne the “expense” — the costs of tools, pubishing, and overhead — of that creation. Given these two findings, the court concluded that Marvel owned in full all 262 of Kirby’s original creations under the work-for-hire doctrine. Pow!

Per the Marvel Method of comic book creation, the artists were freelancers who shouldered most of the expense of creating their works and had almost complete creative control over what they drew. This allowed Marvel to reject the work it didn’t like and only pay for what it thought would sell. It was a cheap and easy way for Marvel to obtain material for its many titles. It is also relatively well-accepted that under the Marvel Method there was never any notice to the artists that they were giving up all ownership rights in their work.  

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Despite this lack of intent to divest the artists of all ownership rights, the Second Circuit still found divestment proper. While it noted that “actual creative contributions or direction strongly suggest that the work is made at the hiring party’s instance” it then failed to identify any such contributions, finding only that Kirby sometimes collaborated with Marvel’s Lee on the projects. But, even Lee admitted that Kirby had almost unfettered freedom to create whatever his febrile mind conjured. Despite this, the Second Circuit found the first prong satisfied.

And, under the expense prong, the Second Circuit found that Marvel “did not pay for Kirby’s supplies or provide him with office space” but nevertheless still should own the work because it paid Kirby a flat fee for said work.

The murky, wide-ranging nature of the test and the fact that a court could construe it to reach the result it did in Kirby’s case militate in favor of rejecting the test. Indeed, as Kirby later argued, just about every creation that was published after the commencement of an author-publisher relationship would qualify as a work-for-hire under the Second Circuit’s approach.

The Second Circuit’s application of the test also flies in the face of another important section of the Copyright Act. Section 204 of the 1976 Act requires a signed writing by the author in order to divest the author of their ownership rights. It was designed to protect copyright holders from false claims that the author had transferred away their ownership rights, and existed albeit in a less clarified form under the 1909 Act at section 28.

This section was promulgated for the very purpose of avoiding opaque ownership disputes like the one in Kirby. As one court noted, “requiring a writing for enforcement of a copyright assignment enhances predictability and certainty of ownership by preventing litigants from enforcing fictitious agreements through perjury or the testimony of someone with a faulty memory.”  The Circuit acknowledged that Kirby himself had passed away and thus was no longer around to testify as to the specific facts to be scrutinized under the “instance and expense” test. But, it then pieced together enough facts from scattered fragments to divest Kirby’s family of any rights in 262 of Kirby’s original works. A straightforward application of Section 204 or its predecessor would have resulted in the opposite result.

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The Act’s language was written to protect an artist from unknowingly transferring their ownership rights away to more powerful companies, which, of course, is what happened in Kirby’s case. But Kirby’s heirs, like any good superhero, did not take defeat lying down and, when all looked lost, they whipped up a last second deus ex machina in the form of a petition to the Supreme Court. Noting the issues with the Second Circuit’s application of the “instance and expense” test and its improper expansion of the supposedly limited “work-for-hire” doctrine, the Kirbys argued that the highest court in the land should take up the case. A ray of light broke through the low-hanging clouds and spilled down onto the battlefield when the Supreme Court took the petition into conference and made certain indications that it may heed the Kirby’s call.

This led to a relatively happy result for all. Marvel, realizing that the Supreme Court’s overturning of the Second Circuit’s decision would imperil the copyrights in most of its Universe, and endanger literally billions of dollars in realized and potential revenues, called for the parties to lay down their bludgeons and meet at the bargaining table, where they reached an amicable settlement. But it left other creators without any Supreme guidance in connection with their section 304 rights while allowing the abominable “instance and expense” test to survive, bloodied and bruised but still intact. Until the next hero (or his or her heirs) rises to the challenge and in a Hulk-like fashion smashes this flawed method of analyzing putative works-for-hire under the 1909 Act.  

Scott Alan Burroughs, Esq. practices with Doniger / Burroughs, an art law firm based in Venice, California. He represents artists and content creators of all stripes and writes and speaks regularly on copyright issues. He can be reached at scott@copyrightLA.com, and you can follow his law firm on Instagram: @veniceartlaw.

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