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Marvel Worldwide, Inc. v. Kirby, USCA Second Circuit, August 8, 2013
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Second Circuit affirms grant of summary judgment in favor of plaintiffs, comic book publishers, and against defendants, heirs of renowned comic book artist Jack Kirby, concluding that drawings were “works made for hire” under the Copyright Act of 1909, where the works were made at Marvel’s instance and expense, and defendant heirs could demonstrate no agreement to the contrary.
Plaintiffs, Marvel Worldwide, Inc., Marvel Characters, Inc., and MVL Rights, LLC, creators and publishers of comic books (collectively, Marvel), brought suit against defendants, the heirs of comic book legend Jack Kirby, seeking a declaration holding that 45 Termination Notices sent by the Kirby heirs to Marvel purporting to terminate Kirby’s alleged assignment of rights in a number of Marvel comic editions published between 1958 and 1963 (collectively, the Kirby Works) were a nullity. According to Marvel, it owned the copyrights in the works, as works made for hire, that were the subject of the Termination Notices, and neither Kirby nor his heirs held any rights in the works. The Kirby heirs counterclaimed for a declaration that the heirs now controlled the copyrights in these works and that the Termination Notices were effective. On cross-motions for summary judgment, the district court granted Marvel’s motion, finding that the Kirby Works were works made for hire within the meaning of the Copyright Act of 1909 and, as a result, Marvel owned the copyrights in the Kirby Works and the Termination Notices were ineffective. (Read our summary of the district court’s decision here.)
On appeal, the Ninth Circuit panel began by considering whether the district court had valid personal jurisdiction over defendants Lisa and Neal Kirby, California residents. The court concluded that the only acts that could potentially give rise to jurisdiction over Lisa and Neal—sending termination notices to Marvel in New York—were insufficient to support an exercise of personal jurisdiction under New York’s long-arm statute. Most important, noted the court, what the Kirby siblings sought to vindicate were purported termination rights under Section 304(c) of the federal copyright laws; they sought no privilege or benefit conferred by New York state law. Therefore, the court concluded that Lisa and Neal Kirby did not purposefully avail themselves of the benefits and protections of New York’s laws.
The court, however, rejected defendants’ contention that the absence of personal jurisdiction over Lisa and Neal required vacatur of the judgment as against the other Kirby siblings, Barbara and Susan. Although the district court had not had occasion to consider the joinder issue, the appeals court applied the governing standards of Rule 19(b) of the Federal Rules of Civil Procedure and concluded that Lisa and Neal were not indispensable parties. Because Lisa’s and Neal’s interests were identical to those of the remaining defendants and all siblings had the same lawyer, who would be “no less vigorous in his advocacy” given that he now represented two siblings instead of four, the court concluded that there was no practical prejudice to Lisa and Neal as a result of adjudicating the case in their absence.
After dispensing with the procedural issues in the case, the court turned to the merits of Marvel’s summary judgment motion. Section 304(c)(2)(B), stated the court, protects the property rights of widows and children of authors by granting them the power to undo earlier transfers of copyrights and to enjoy the remainder of the copyright term. The court noted, however, that termination rights under Section 304(c) do not exist with respect to “works made for hire.” Where a work is made for hire, copyright law deems the employer to be the author for purposes of copyright ownership.
To determine whether the drawings of Jack Kirby were works made for hire within the meaning of Section 304(c), the court applied case law interpreting that term as used under the 1909 Copyright Act, the law in effect when the works were created. Applying the “instance and expense” test, when an employer induces the creation of a work and has the right to direct and supervise the manner in which the work is carried out, the employer is presumed to be the author of the work. The independent contractor can overcome the presumption only by evidence of an agreement to the contrary.
In considering the instance requirement, the court acknowledged that, even if not exercised, the right to direct and supervise the manner in which the work is carried out is in some circumstances sufficient. For example, where the hiring party makes a particularly strong showing that the work was made at its expense, or where prior dealings between the parties on similar assignments, as part of an ongoing arrangement, have rendered fine-grained supervision unnecessary, the right to direct and supervise may be sufficient. With respect to the expense component, the court noted that the degree of resources the hiring party invests in the creation of the work is relevant but not dispositive. In some cases, payment of a sum certain suggests a work-for-hire arrangement, but where the creator of a work receives royalties as payment, the method of payment generally weighs against finding a work-for-hire relationship.
Applying these principles to the facts in the record, the court concluded that the works were created at Marvel’s instance and expense and that defendants had not adduced evidence of an agreement to the contrary contemporaneous with the creation of the works. Construing the evidence in favor of the defendants, the court found beyond dispute that although Jack Kirby was a freelancer, his working relationship with Marvel during the period in question was close and continuous. The court noted further that it was without question that Marvel published the great majority of Kirby’s work during these years – 1958 through 1963. Understood as products of this overarching relationship, the court reasoned, Kirby’s works during this period were not self-directed projects in which he hoped Marvel, as one of several potential publishers, might have an interest; rather Kirby created the relevant works pursuant to Marvel’s assignment or with Marvel specifically in mind. Finally, the court noted that Marvel had the power to reject Kirby’s pages and require him to redo them or alter them. Examining the dynamic of Kirby’s work for Marvel, the court concluded that the disputed works were created at Marvel’s instance.
The court acknowledged that whether the works were created at Marvel’s expense presented a more difficult question. Here, stated the court, Marvel paid Kirby a flat rate per page for the pages it accepted, paid Kirby no royalties, and did not pay for Kirby’s supplies or provide him with office space. However, Marvel was free to reject Kirby’s pages and pay him nothing for them. In the absence of any evidence that Kirby undertook to create the works independent of Marvel, the court held that Marvel’s payment of a flat rate and its contribution of both creative and production value, in light of the parties’ relationship as a whole, were enough to satisfy the expense requirement.
Having satisfied the instance and expense test, Marvel was entitled to a presumption that the works were made for hire. The court determined that defendants had not presented evidence of an agreement to the contrary that would overcome that presumption. The appeals court therefore affirmed the district court’s determination that the works were works made for hire and upheld the grant of summary judgment against defendants Barbara and Susan.
Seltzer v. Green Day, Inc., USCA, Ninth Circuit, August 7, 2013
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Ninth Circuit panel affirms district court’s grant of summary judgment in favor of defendant rock band, holding that use of plaintiff’s artwork in video backdrop during concerts was transformative and entitled to fair use defense but reverses award of attorneys’ fees, finding that plaintiff’s suit was not objectively unreasonable.
Plaintiff, an artist and illustrator, created Scream Icon, a drawing of a screaming, contorted face, which he later reproduced for sale in poster form. The posters have been widely disseminated and have been plastered on walls as street art in Los Angeles and elsewhere. At various times, plaintiff has used Scream Icon to identify himself by placing the image on advertisements for his gallery appearances. In connection with its 2009-2010 concert tour, the band Green Day commissioned defendant, video designer Roger Staub, to create individual videos for each song on the band’s set list. Staub modified and used a photo he took of a Scream Icon poster in a Los Angeles alley for the video of the song “East Jesus Nowhere,” which addresses themes of religious hypocrisy. Staub’s video features graffiti, including at least three images of Jesus Christ that are defaced over the course of the video, and the center of the frame is dominated by an image of Scream Icon. In addition, Staub emblazoned a red cross across the Scream Icon face and modified the color and contrasts of the image in the four-minute video, which the band used during its tour. Plaintiff sued the band, its members, Staub, and various related entities for copyright infringement, trademark infringement, and assorted state law claims. The district court concluded that the video was fair use, granted summary judgment in favor of defendants on all counts, and awarded attorneys’ fees to the defendants. On appeal, the Ninth Circuit affirmed the fair use finding but reversed the lower court’s award of attorneys’ fees.
The court of appeals panel conducted its own review of the four statutory fair use factors and found that the most important factor, transformative use, was satisfied, emphasizing the religious themes in the video, which were absent from the poster, and noting that “although Scream Icon is prominent, it remains only a component of what is essentially a street-art-focused music video about religion and especially about Christianity.” The court also found that while Green Day’s concert tour was undoubtedly commercial, the band had never used the image in its CD art or merchandising and had not exploited the image for commercial use.
Considering the nature of the copyrighted work, the second fair use factor, the court acknowledged that the underlying work was a creative work subject to strong protection but found that the factor was mitigated by the fact that plaintiff had previously published the work, controlling its first publication, and that Scream Icon had been widely disseminated on the Internet and on the streets of Los Angeles prior to the band’s use. With respect to the third factor, the video made use of plaintiff’s image in its entirety. In the court’s view, however, the image was not divisible and this factor “will not weigh against an alleged infringer, even when he copies the whole work, if he takes no more than is necessary for his intended use.” Finally, as to the alleged infringement’s effect on the market or value of the copyrighted work, the court found the factor weighing in favor of defendants, particularly in light of plaintiff’s own testimony that the video had not had any economic impact on his work. Green Day had not used the image in any of its merchandising, and there was no evidence to support a conclusion that its video had affected the potential market (such as through licensing) of plaintiff’s work. The court also found no error with the district court’s grant of summary judgment on plaintiff’s Lanham Act claims, given the absence of evidence that use of the mark was “sufficiently public to identify or distinguish the marked goods in an appropriate segment of the public mind.”
On the issue of attorneys’ fees, however, the court disagreed with the district court and vacated the award in defendants’ favor. The district court relied on three facts in concluding that plaintiff’s claim was “objectively unreasonable” in awarding attorneys’ fees: 1) that Seltzer lost on summary judgment; 2) that three of the four fair use factors were in Green Day’s favor; and 3) that Seltzer’s deposition testimony “effectively conceded that the use was transformative.” The court of appeals emphasized that the Copyright Act does not create a “loser pays” system and that succeeding on summary judgment does not alone entitle a party to attorneys’ fees. In addition, in the court’s view, the determination of transformative use was a relatively close call. Even if plaintiff acknowledged the thematic differences between his work and the video, the court noted, his testimony was personal and not a legal concession and could not establish the objective unreasonableness of his legal claims.
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