Since the 1930s, Marvel Comics has been developing its host of characters, including Spider-Man, Iron Man, Captain America, Black Widow, Doctor Strange, Hulk, Daredevil, Wolverine, Black Panther and Captain Marvel. While the comics creators transferred ownership of their copyrights in these characters to Marvel decades ago, U.S. copyright law allows these creators to terminate the transfer of copyright under certain circumstances. Artists and their heirs are currently attempting to terminate these transfers, and if successful, would receive a share of the substantial revenue generated by the characters today. However, Disney, the current owner of Marvel Entertainment, is fighting to maintain its rights to these beloved characters.
What is the right of termination?
The right of termination under U.S. copyright law allows creators or their heirs to regain ownership of rights transferred to another party after a certain period. The eligibility requirements for copyright termination depend on when the transfer was made, who executed it, and when copyright was originally secured for the work. The right to terminate typically begins 35 years after execution of the transfer, and the right must be exercised within a five-year period. The creator must give at least two years’ notice of termination and record the notice with the U.S. Copyright Office.
However, works made for hire are not subject to termination rights. The work-for-hire doctrine states that the creator does not own the copyright to a work if the creator prepares the work as an employee within the scope of employment, or if it is specially ordered or commissioned and the parties expressly agree in a signed, written document that the work is considered a work made for hire. In the case of a work made for hire, the copyright in that work is owned by the employer, and not the creator. Case law around works made for hire has become quite complicated when the creator is an independent contractor, rather than an employee.
What is at stake with the Marvel litigation?
In 2021, five writers and artists who created many Marvel characters, including Doctor Strange, Black Widow, Hawkeye, Iron Man, and Spider-Man, among others, served Disney with notices of copyright termination. Lawrence Lieber (Stan Lee’s younger brother), Steve Ditko, Don Heck, heirs of Don Rico, and heirs of Gene Colan claim that these characters were not works for hire, because the writers and artists were freelancers (i.e., were not formally employed by Marvel), and therefore the copyright transfers may be terminated in 2023. On the other hand, Disney claims that the writers and artists should be treated as employees due to Marvel’s level of control over these artists and the nature of their employment. Thus, Disney filed several lawsuits seeking to invalidate copyright-termination notices.
The case will likely be a long battle, as Disney is known to zealously defend its copyrights. Further, there is significant revenue at stake. If the copyrights to those characters are terminated, the writers and artists will receive a share of the profits from new works based on their copyrighted material, including movies, television shows, merchandise and other uses of those characters.
Conclusion
Regardless of what happens in the case, business owners and creators should understand work-for-hire rules and consult an experienced attorney to ensure their rights are protected.
