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Superman Court Case

July 13, 2009: Your Questions About Superman Court Ruling

In light of the recent court ruling in the ongoing legal battle between Jerry Siegel's family and DC Comics, fans were asking a myriad of different questions and speculating what it all means. I contacted Jeff Trexler, Wilson Professor of Social Entrepreneurship at Pace University, and posed a series of questions based on those fans themselves were asking in the comments section of the Superman Homepage news page.

Steve: I was wondering if you'd be able to answer a few questions for the fans in laymen's terms regarding what all this means? I know it's complicated and far from over, but there's a lot of rumor and speculation amongst the fan base that I would like to address.

Jeff: I cover a lot of this material in my Blog@Newsarama posts - just click back to my first post there to begin the series.

Steve: What's the current situation in regards to the rights to Superman? Who owns what? Does DC Comics own 50% and the Siegel's own 50%?

Jeff: It's 50/50 re: the Superman material in Action Comics #1. What that means relative to the current Superman material has yet to be determined. It's a central question of the next phase. I discuss the issue at length in my early Newsarama posts.

Steve: Are the Siegel's greedy? Why should they get the rights to Superman? Didn't Jerry and Joe sell Superman to DC fair and square back in the late 1930s?

Jeff: Yes, Jerry and Joe did, but U.S. law created a way for creators & the heirs to terminate copyright licenses that last a significant amount of time. The basic idea is that the sale price likely did not reflect this longevity & the purchasor should not be able to reap the windfall. The issue also took on greater significance when Congress lengthened the term of copyright - it seemed unjust to give the licensees (often big corporations) this unforeseen benefit.

I talk about the policy here:

http://blog.newsarama.com/2008/04/03/how-creators-get-their-copyright-back/
http://blog.newsarama.com/2008/04/04/copyrights-time-bomb/
http://blog.newsarama.com/2008/04/24/how-siegel-and-shuster-created-our-world/#more-7954

    Division of labor: The creator did not merely work for himself. I use the masculine pronoun deliberately, because back then the general assumption was that men made money while women managed the home. Accordingly, a creator had a responsibility to earn enough to support his wife and children both while he was alive and after he had passed away.

    Given these cultural factors, Siegel and Shuster's decision to sell all rights to Superman in exchange for their page rate made a certain degree of sense. Joe and Jerry understood that they weren't just getting paid for 13 pages; they were getting the opportunity to create a shop inside Detective Comics that would produce Superman material for as long as it continued to sell.

    However, just as Superman defied the laws of nature, their character also broke all the rules of comics publishing. He didn't just star in a single comic book - he became a multimedia franchise. He leapt from Action to toys to radio to film and TV; he spawned spinoff comics and reprints; he was knocked off by other companies. Indeed, we would not be exaggerating to say that Superman sparked the rise of an entire industry.

    Siegel and Shuster shared relatively little of the profit, and they were far from alone. Music, movies, books - new technologies of mass production were generating profits from copyrighted material far beyond what anyone expected, with properties capable of staying on the market even longer than the lives of their creators - and in the case of Siegel and Shuster, their jobs.

    In the 1950s, Congress began a series of inquiries that lasted literally for decades, and in 1976, lawmakers ultimately agreed to extend the term of copyright. However, that raised the question of who should benefit from the extension. The easiest choice would have been to leave it in the hands of the current copyright owner, but in many instances that would benefit wealthy commercial publishers. To give rich corporations this windfall seemed unfair, if not undemocratic; depriving creators' families of support made it seem downright immoral.

    Termination rights offered a solution to this dilemma. From the perspective of the time, enabling creators and their heirs to regain copyright was a way to affirm the American dream. Just as the early Superman fought for the weak against the strong, the new copyright law - at least in theory - privileged the creative individual and his family over entrenched corporate wealth.

Steve: Some fans can understand Jerry and Joe being able to claim the rights back with the law change if they were alive, but they don't get why their family and heirs should get the same rights? Why should they be entitled to the same claim as the creators themselves?

Jeff: My Newsarama posts talk about this a bit. The cultural presumption embedded in the law is that the family has a breadwinner (typically the father) who is working not just for himself but his family. Enabling the father - who typically died first - to keep providing for the family was fundamental to social justice & the social order.

Steve: What exactly happens in 2013? Does DC lose all rights to the character and the Siegels and Shuster Estate each own 50% of the character's rights?

Jeff: If the Shuster estate succeeds in termininating DC's license of the remaining 50% interest in the Superman material Action Comics #1 - and as the judge said Wednesday, that's a big if - then Siegels & the Shuster Estate will each own 50% interest in the Superman material Action Comics #1. What that means has yet to be determined.

Re 2013, these paragraphs from p.23 are worth noting in particular:

    Although it is true that, should the Shuster estate be successful in terminating the grant to the copyright in Action Comics No. 1, then at that point in time plaintiffs and the Shuster estate, not DC Comics, would hold the entirety of the copyright published in that comic book and would sit, assuming common representation, in much the same position Warner Bros. was said to have sat at the beginning of the negotiations over the Superman film agreement - they would hold a very valuable, and perhaps, indispensable portion of the Superman copyright, rendering any effort to exploit the remainder of the television and film rights difficult, if not impossible, without their assent. At that point, the equities which plaintiffs have so desperately sought the Court to take into consideration in viewing and valuing the agreement entered into by DC and Warner could suddenly reverse themselves - plaintiffs would be a position to dictate terms for future exploitation of the Superman property in all forms of media, including television, film, and animation.

    The problem with this line of reasoning, however, lies in its speculative nature. Although the Court recognizes that there are competing cross-currents of leverage over the near term that could render the likelihood or potential for future exploitation and development of Superman film much more fluid and much more beneficial from a monetary point of view, the demands presently required by equity cannot be left unaddressed due to the possibilities of the future, especially a possibility keyed to successfully navigating the formalistic and complex termination provisions in the 1976 Copyright Act. It is by no means a foregone conclusion that the Shuster estate will be successful in terminating the grant to the Superman material published in Action Comics No. 1.

Steve: If this does happen, does that mean that from 2013 DC and the WB would have to lease the rights from the Siegels and Shuster Estate (S&SE)?

Jeff: Possibly, at least in regard to certain aspects of the Superman property. One thing to remember in this regard is that the S&SE would not have to cooperate in any sale. As co-owners, each one could sell separately, provided that it made a financial accounting to the other co-owners. Thus, if one family wanted to hold out against DC but the other decided it wanted the money, the latter could sell the property regardless of the other estate's objection.

Steve: Could S&SE lease the rights to other companies, like Marvel?

Jeff: Technically yes, but trademark would continue to pose a problem. That's also in issue that's been raised for the next phase. More here:

http://blog.newsarama.com/2008/04/09/can-the-siegels-sell-superman-to-marvel/
http://blog.newsarama.com/2008/04/10/will-dc-lose-superman/

Steve: Is it correct that Warner Bros. is inclined to start production on a new Superman film by 2011? Is there a deadline for when they have to have it in theatres by? I'm guessing they'd want to have it out in cinemas before 2013 so as to earn their share of profits from the film before the Shuster Estate can claim their ownership rights?

Jeff: 2013 could complicate matters for a future film depending on how things work out re: the Shuster estate, but again, it's not a lock that the Shuster estate will win - and even if it does, trademark and other incentives provide a substantial incentive for the Siegel & Shuster estates to license their interest.

Many accounts garble the issue re: the latest ruling & reversion rights. WB technically has a movie option through 2023, but the agreement lacked a standard reversion provision. If WB fails to make a film by the time a standard reversion provision would vest, the judge notes, the Siegels could sue for damages resulting from the failure of the license to include the provision.

However, whether & what the Siegels would win is undetermined. The judge indicates that the value of Siegels' share of the Superman property vis the movie license has the potential to be relatively small, a result of both the "challenged" state of the Superman property & the fact that the Siegels' rights as co-owners are nonexclusive, which means that an arms' length competition to license the property would likely lead each side to bid down the property to make the sale.

As a result, the notion that the WB *must* make a movie to avoid the Siegels' lawsuit is a bit of an overstatement. If WB doesn't make the film and the Siegels' sue, sure, they might face the cost of trial + potential - but by no means certain - damages upwards up a few million dollars. But is there a substantial incentive to spend upwards of 50-100 million dollars on a movie to save yourself, likely at worst, 6 or 7 million but possibly much less?

In fact, the potential 2013 Shuster termination possibly works against the Siegels' here. In a trial re: damages from the missing reversion provision, WB could argue that the rights situation is so complex that it made making another Superman film too risky, even potentially unprofitable, thereby substantially lowering the value of the option & any damages the Siegels might receive in a subsequent lawsuit.

Steve: Is the Superboy rights a separate matter?

Jeff: I address this here: http://blog.newsarama.com/2008/04/16/superman-and-superboy/

Steve: One thing is for sure. This is far from over, and the fans are unlikely to understand or comprehend even a small portion of what is going on. Trademarks, Copyrights... It's a very complicated matter. However I think most fans are making the same error I made, and that is, assuming that what is at stake is the complete rights to the character of Superman. In fact, what is being fought over is the rights to the contents of "Action Comics #1". What this will mean and how much of the mythos is encased within that comic book is anyone's guess at this point in time.

The Superman Homepage would like to thank Jeff Trexler for taking time to answer our questions. Look for more Superman Homepage articles and discussions on the ongoing court case as we continue to delve into the matter to try and make sense of it all in laymen's terms.


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