Jack Kirby Marvel Characters Were Works Made for Hire: Second Circuit

Practical Law Legal Update 6-537-3826 (Approx. 4 pages)

Jack Kirby Marvel Characters Were Works Made for Hire: Second Circuit

by Practical Law Intellectual Property & Technology

Background

Jack Kirby was a comic book artist whose career spanned over 50 years. At issue in this case are approximately 262 drawings Kirby produced for Marvel Comics from 1958 to 1963. In September 2009, 15 years after Kirby's death, his four children (the Kirby heirs) served Marvel with notices seeking to exercise their statutory termination rights under Section 304(c)(2) of the Copyright Act for the 262 works. In January 2010, Marvel filed suit in the US District Court for the Southern District of New York seeking a declaration that the Kirby heirs have no termination rights under Section 304(c)(2) because the works were made for hire.

The Kirby heirs filed a motion to dismiss, arguing that:

Courts in New York State lacked personal jurisdiction over two of the Kirby heirs, Lisa and Neal, who are both California residents.
Lisa and Neal were indispensable parties to the action and, therefore, the entire action must be dismissed.

The district court denied the motion, finding that it had personal jurisdiction over Lisa and Neal Kirby under the New York long-arm statute and that this jurisdiction accorded with constitutional due process. Because the district court had determined it had personal jurisdiction over all of the Kirbys, it did not consider the Kirbys' assertion that Lisa and Neal were indispensable parties.

Both parties filed various motions for summary judgment. Among its rulings, the district court granted Marvel's motion for summary judgment that the works were made for hire at Marvel's instance and expense and therefore the Kirby heirs had no termination rights under section 304(c)(2).

Outcome

On appeal, the Second Circuit:

Affirmed the district court's grant of summary judgment in favor of Marvel as against the in-state heirs.
Vacated the judgment as against Lisa and Neal with instructions to dismiss the action for lack of personal jurisdiction.

The court concluded that:

The New York long-arm statute did not confer personal jurisdiction over Lisa and Neal.
Lisa and Neal were not indispensable parties.
Kirby created the works for Marvel as works made for hire.

Personal Jurisdiction

The court found that the only acts that potentially gave rise to long-arm jurisdiction over Lisa and Neal were the notices sent under Section 304(c) of the Copyright Act, and concluded that to be an insufficient basis for personal jurisdiction. The factors weighing in Lisa and Neal Kirby's favor were:

Lisa and Neal Kirby were not present, physically or otherwise, in New York in connection with the underlying dispute.
The Termination Notices sent by the Kirbys were not part of, or in contemplation of, a course of business dealings with Marvel. Instead, the Notices gave no indication that the Kirbys were interested in negotiating with Marvel.
The Termination Notices sought to assert legal rights under federal law, rather than a benefit or privilege conferred by New York law.
The Kirbys were required to send the Termination Notices to Marvel under federal copyright law.

The Second Circuit rejected Marvel's argument that the notices should be treated differently from other types of communications (for example, cease-and-desist letters) because they are self-executing. The court noted that while the notices are necessary to effectuate termination, termination is consummated by filing the notices with the Copyright Offices. Further, the court was not persuaded that the notices are any more a transaction of business than other communications.

Indispensable Parties

Having determined that Lisa and Neal were not subject to personal jurisdiction in New York, the Second Circuit then turned to the issue of whether they were indispensable parties to the action and concluded that they were not. In reaching this conclusion, the Second Circuit considered:

The potential prejudice to Lisa and Neal arising from their absence.
Whether Marvel would have an adequate remedy if the action were dismissed for non-joinder.

Section 304(c) of the Copyright Act provides a right that, where an author is deceased, may be exercised by persons entitled to exercise more than one-half of the author's termination interest. The parties interpreted to mean that at least three of the four Kirby heirs must exercise the right for any to receive its benefit. Lisa and Neal Kirby argued, therefore, that they are indispensable parties because all four Kirbys would be affected by an adverse judgment against two of them. The court found, however, that Lisa and Neal would not be prejudiced, because their interests are identical to the interests of the remaining two Kirby children, who are represented by competent and vigorous counsel.

The court further found that finding that Lisa and Neal indispensable parties and dismissing the action for non-joinder would leave Marvel without an adequate remedy because the record does not show that the New York Kirbys are amenable to jurisdiction in California. As a result, the Kirbys could defeat Marvel's declaratory judgment suit just by refusing to submit to jurisdiction in any venue and Marvel would be unable to pursue its claims.

The court therefore concluded that the only permissible outcome was that Lisa and Neal Kirby were not indispensable parties to the action and it was appropriate for the action to continue with only the New York Kirbys as defendants.

Works Made for Hire

The court affirmed the district court's grant of summary judgment, finding that the works at issue were works made for hire. Section 304(c)(2) of the Copyright Act provides no termination right in works made for hire. The court applied the straightforward analysis under the "instance and expense" standard applicable to pre-1978 works. Facts supporting the Second Circuit's determination that the works were made at Marvel's instance and expense included that:

Although Kirby was a freelancer, he had a close and continuous working relationship with Marvel and most of his works were published by Marvel during the relevant period.
Kirby created the works with Marvel in mind or as assigned by Marvel.
Marvel had a creative role in the works, including power to reject Kirby's works or require him to redo or alter them. Further, evidence showed that Kirby did not work on "spec" and that he collaborated with Marvel.
Marvel paid Kirby a flat rate per page for the work it accepted.
Kirby's drawings were not free-standing artworks, but built on pre-existing themes and titles that Marvel had established.

Having concluded that the works were created at Marvel's instance and expense, the Second Circuirt considered and rejected as insufficient evidence of a contemporaneous agreement that suggests the works were not made for hire. Therefore, the court found that the works were made for hire and affirmed the SDNY's grant of summary judgment for Marvel as against Barbara and Susan Kirby.

Practical Implications

Senders and recipients of statutory termination notices under the Copyright Act should take note of the jurisdictional considerations raised and addressed by the Second Circuit in this case. In particular, while long-arm statutes vary among states, a company seeking to have a termination notice declared invalid should determine whether out-of-state senders have other contacts with the state to establish jurisdiction and, if not, consider the appropriate state to bring the action. Note, too, that the work-made-for-hire analysis applied by the Second Circuit is applicable to works created before 1978, and the requirements differ for later works. However, the court's analysis remains relevant for companies evaluating copyright portfolios relating to pre-1978 works, including when conducting due diligence.

Court Documents

Marvel Characters, Inc. v. Kirby, No. 11-333-cv, (2d. Cir. Aug. 8, 2013).

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