Superman Rights Case Flies to 9th Circuit

PASADENA, Calif. (CN) - The 9th Circuit should overturn a court order invalidating termination of copyright notices filed by the family of Superman co-creator Joseph Shuster, an attorney at the center of the dispute told the appeals court.

The families of the late writer Jerome Siegel and artist Joe Shuster are engaged in a long-running battle with Warner Bros. and its DC Comics subsidiary over rights to the Man of Steel.

In a May 2010 complaint, DC Comics claimed Marc Toberoff of Malibu, Calif. convinced the Siegel and Shuster's families to terminate their agreements with DC Comics and file copyright notices.

According to the publisher, the families entered into a joint venture with Toberoff's Pacific Pictures, granting him a controlling stake of their interest in the superhero character.

After Shuster's death, his sister Jean Peavy purportedly signed a 1992 agreement where DC agreed to settle Joe's debts, and pay Peavy and Shuster's brother Frank a payment of $25,000 per year for the rest of Peavy's life.

Granting DC Comic's motion for partial summary judgment last year, Wright ruled that the 20 year old agreement was binding, and superseded any earlier agreements between Shuster and the comic book publisher.

The agreement not only reestablished DC's rights in Superman, it barred Jean, or Shuster's brother Frank, from making future claims to those rights, Wright ruled.

After the Copyright Extension Act of 1998 granted heirs termination rights, Jean's son Mark Warren Peavy served DC Comics in 2003 with a notice of termination.

But Wright ruled that Peavy's deal extinguished the chance to revisit the terms of Shuster's grant of copyright.

Shuster never terminated earlier grants of Superman copyrights before his death, and "by entering into the 1992 Agreement - which increased Frank and Jean's payments - the heirs essentially struck a deal that binds all other heirs," Wright wrote his Oct. 17 order. But on Thursday, Toberoff told the three-judge panel of the 9th Circuit to reverse.

Wright "committed clear error" by ruling that Peavy and DC's one-page pension agreement barred the Shusters from exercising their termination rights, the attorney said.

Frank and Jean had no termination right to exercise, Toberoff reasoned, because Shuster's rights in Superman "had long been assigned in 1938," and DC still owned the copyright when Jean inked the deal.

Before the Copyright Extension Act, termination rights were granted only to an author's spouse, children, or grandchildren, the attorney said.

"Joe Shuster was never married and had no children, so no one held the termination right in 1992," Toberoff said.

Language in the agreement did not revoke Shuster's previous grants of copyright to DC, the attorney added.

"It contains no language of rescission, revocation, cancellation, replacement, or any of its synonyms," Toberoff said. "And given the tremendous value of the Superman franchise, if that was the intent of DC's lawyers who drafted this simple 1992 pension agreement they would have said so in plain English."

Judge Stephen Reinhardt zeroed in on the termination notice Toberoff filed on Mark Peavy's behalf - a question Wright did not reach. The judge asked the attorney why he failed to disclose the joint venture between Toberoff's Pacific Pictures and the Shusters.

"That wasn't an accurate statement of the ownership of the estate's rights was it?" Reinhardt said.

Toberoff countered that the termination notice asked for "very little information," and did not require "disclosure of any collateral agreements."

But DC Comics' Daniel Petrocelli with Los Angeles firm O'Melveny & Myers called Toberoff's failure to disclose the joint venture a "deception" on the copyright office.

Asking the court to affirm, Petrocelli said Mark Peavy's 2003 termination notice was invalid because the Copyright Extension Act only allows heirs to end grants of copyright made before 1978.

Since Jean put pen to paper in 1992, there was no right for Mark to terminate, Petrocelli said.

"Whether or not you have a termination right doesn't depend on anybody's intention - whether you're intending to preserve something, or intending to extinguish something," Petrocelli said. "It depends on the date of the grant, and the legal relationship between the people who are doing this."

But during his reserve time, Toberoff said there was no evidence that DC intended to revoke previous grants of copyright.

"It's counter-intuitive that DC would suddenly want to revoke Joe Shuster's grants which were upheld in two court judgments to give it all rights to Superman, and replace it for some release language from a non-author," the attorney said.

Toberoff said that Peavy did not significantly leverage the Shuster family's termination rights to a "multibillion industry," adding that DC knew it was under no legal obligation to pay her.

"Hence they had no leverage, they had no termination rights; DC knew so," Toberoff said.

But Petrocelli said Peavy was Joe Shuster's sole beneficiary, and "stood in his shoes." As Shuster's legal successor she was permitted to make a new grant of copyright, regardless of whether or not she used a termination right as leverage, the attorney said.

Judge Reinhardt was joined by Judge Sidney Runyan Thomas, and U.S. District Judge John Sedwick, who appeared via a video link-up from Alaska.

Earlier this year, the 9th Circuit ruled that the Siegel family is bound to a 2001 contract granting the copyright of Superman to Warner Bros. and DC Comics. Petrocelli successfully argued that case.

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