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  1. #1

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    The Lawsuit Between Jack Kirby's heirs and Marvel / Disney Explained

    The New York Times did an article yesterday explaining the legal ramifications of the Kirby estate vs Marvel Disney lawsuit(s), the appeal process which will go on for years, what all parties are included in the lawsuit, and how it could cost Disney in the long run.

    It's a lengthy article, so get comfy:

    A Supersized Custody Battle Over Marvel Superheroes
    By BROOKS BARNES and MICHAEL CIEPLY

    Published: March 19, 2010


    WHEN the Walt Disney Company agreed in August to pay $4 billion to acquire Marvel Entertainment, the comic book publisher and movie studio, it snared a company with a library that includes some of the world’s best-known superheroes, including Spider-Man, the X-Men, the Incredible Hulk and the Fantastic Four.

    The heirs of Jack Kirby, the legendary artist who co-created numerous Marvel mainstays, were also intrigued by the deal. Mr. Kirby’s children had long harbored resentments about Marvel, believing they had been denied a share of the lush profits rolling out of the company’s superheroes franchises.

    They spent years preparing for a lawsuit by enlisting a Los Angeles copyright lawyer, Marc Toberoff, to represent them. When the Marvel deal was struck, Mr. Toberoff — who helped win a court ruling last year returning a share of Superman profits to heirs of one of that character’s creators — sprang into action.

    Pow! Wham! Another high-profile copyright fight broke out in Hollywood, and this one could be the broadest the industry has yet seen.

    Last September in a prelude to a lawsuit, Mr. Toberoff — using a provision in copyright law that, under certain conditions, gives authors or their heirs the right to regain ownership of a product after a given number of years — sent 45 notices of copyright termination to Marvel, Disney and other studios. The notices expressed the family’s intent to regain copyrights to some of Mr. Kirby’s creations as early as 2014. By Mr. Toberoff’s calculation, as much as 88 percent of Marvel’s film earnings have been what he calls “Kirby related.”

    Marvel and Mr. Toberoff entered settlement talks. But on Jan. 8, Marvel surprised the Kirbys with a lawsuit seeking to invalidate the notices — stunning Mr. Toberoff, who figured Disney, having just written a huge check for Marvel, would settle. His foes thought otherwise.

    “We took the initiative because we have a very strong legal position,” said James W. Quinn, a Marvel lawyer. “There is no question that Kirby was a great artist. But that’s not the law.”

    The family has since filed a lawsuit against Marvel and Disney. Aside from seeking dismissal of Marvel’s lawsuit, Mr. Kirby’s children accuse the company of depriving the Kirby estate of credit — and thus profits — from movies like “X-Men Origins: Wolverine,” which took in $373 million at the global box office. Mr. Quinn dismissed this claim as frivolous.

    “The family has nothing to show for all of this,” said Mr. Toberoff, as he sipped hot chocolate in the lounge of the Peninsula Hotel here last month. “They just want what is fair.”

    The dispute is also emblematic of a much larger conflict between intellectual property lawyers and media companies that, in Mr. Toberoff’s view, have made themselves vulnerable by building franchises atop old creations. So-called branded entertainment — anything based on superheroes, comic strips, TV cartoons or classic toys — may be easier to sell to audiences, but the intellectual property may also ultimately belong in full or in part to others.

    “Any young lawyer starting out today could turn what he’s doing into a real profit center,” Paul Goldstein, who teaches intellectual-property law at Stanford’s law school, said of Mr. Toberoff’s specialty.

    Mr. Goldstein said cases like the one involving Marvel are only the tip of an iceberg. A new wave of copyright termination actions is expected to affect the film, music and book industries as more works reach the 56-year threshold for ending older copyrights, or a shorter period for those created under a law that took effect in 1978.

    Mr. Toberoff is tackling what could be one of the most significant rights cases in Hollywood history; it’s certainly the biggest involving a superhero franchise. Unlike his continuing fight with Warner Brothers over Superman, Mr. Toberoff’s rights-reclamation effort against Marvel involves dozens of stories and characters from about 240 comic books.

    Complicating matters are licensing agreements Marvel has made over the years with rival studios for characters Mr. Kirby helped to create. Sony holds long-term movie rights to Spider-Man; 20th Century Fox has the equivalent for the X-Men and Fantastic Four. Universal Studios holds theme park rights to Spider-Man and the Incredible Hulk. And more films stemming from Mr. Kirby’s work are coming: Marvel is spending hundreds of millions to bring Thor and the Avengers to theaters.

    If the Kirbys succeed in their reclamation effort — and that’s still an enormous if — they would be entitled to a share of profits from new works based on any of the copyrighted material.

    And the four Kirby heirs (Lisa, Neal, Barbara and Susan) could acquire a nonexclusive right to initiate new projects based on characters partially created by their father, as long as they accounted to Marvel for its share in any of them.

    “This is like the Superman case times five,” said Mr. Toberoff, who predicts a three- to five-year court battle, including appeals, if the case proceeds.

    MR. TOBEROFF, 54, could be a movie character himself. Alternately described by lawyers who have worked with him as a brilliant crusader for the little guy and a Svengali who asserts a high degree of control over clients, he has evolved from his early years as a producer of low-budget films into his job as a high-stakes litigator with multiple wins.

    With the Kirbys, Mr. Toberoff will square off against a squadron of corporate lawyers that includes Mr. Quinn, whose most recent claim to fame was quashing Dan Rather’s $70 million breach-of-contract suit against CBS. Disney is no stranger to intellectual property fights, having spent 18 years battling a rights-infringement case involving Winnie the Pooh and ultimately winning. The company pushed so hard for an extension of copyright terms in 1998 that the resulting law was derisively nicknamed the Mickey Mouse Protection Act.

    There is nothing corporate about Mr. Toberoff. A graduate of Columbia’s law school, he practiced briefly in New York before ditching the law profession to become what he describes as “a glorified go-fer” for the director Robert Altman. Mr. Toberoff got a quick education in Hollywood’s rough-and-tumble ways in 1987 with “Zombie High,” a horror picture he made on a minuscule budget with student labor.

    “I’ll cut your throat!” Mr. Toberoff recalls Aziz Ghazal, a partner on the project, screaming in one disagreement. Mr. Ghazal later became infamous, Mr. Toberoff noted, as the suspected killer of his own wife and daughter before he was found shot to death in an apparent suicide.

    In 1994, Mr. Toberoff met an heir to the writer-producer Robert Pirosh. After looking through old papers with his new friend, he discovered that the Pirosh estate owned hitherto undetected movie rights to the TV series “Combat!” It was the first of about 10 old shows, including “Fantasy Island” and “My Favorite Martian,” that Mr. Toberoff helped to recycle as movie projects.

    A short leap later and he was back in legal practice, handling film rights cases. One included a suit in which he won an injunction blocking Warner from releasing a big-screen version of “The Dukes of Hazzard.” A judge ruled in 2005 that Warner had failed to secure rights to an earlier movie, “Moonrunners,” on which the new film was partly based. Warner settled for a reported $17.5 million.

    Three years later, Mr. Toberoff won a ruling that allowed the heirs to Jerome Siegel, a co-creator of Superman, to reclaim their copyright from Warner and its DC Comics unit, though complex accounting issues in the case have yet to be resolved and the studio recently hired a new legal team. The heirs still haven’t seen any money.

    Mr. Toberoff’s aggressive style has been controversial at times. Edmée Reit, the widow of Seymour Reit, a co-creator of the character Casper the Friendly Ghost, said Mr. Toberoff called her soon after her husband died to propose a rights lawsuit.

    “Seymour was literally not even buried yet when this man started calling,” Mrs. Reit said in an interview. “I just felt this man was really an exploiter.”
    Mr. Toberoff sharply disagreed with Mrs. Reit’s version of events. He said he contacted her at a time when she was expected to be a witness in a court case involving Casper and told her that a rights waiver her husband had signed before his death ran counter to the law.

    “I thought this was wrong and informed Mrs. Reit of her rights in the process of investigating this situation in defense of my clients,” Mr. Toberoff wrote in an e-mail message last week.

    Lisa Kirby said Mr. Toberoff began representing her after they were introduced by a mutual friend some years ago. She says that she is braced for a long fight, and that she believes that her father, who died in 1994, would have wanted the copyrights terminated.

    “In the end, my father became consumed with the fact that he was not properly compensated or recognized for his tremendous contributions to Marvel, and sadly, he died without either,” Ms. Kirby wrote.

    IN many ways, the Marvel case is simple. It turns on whether Mr. Kirby was working as a hired hand or whether he was producing material on his own that he then sold to publishers. The Copyright Revision Act of 1976, which opened the door to termination attempts, bans termination for people who delivered work at the “instance and expense” of an employer.

    Mr. Toberoff and Marvel disagree on the circumstances under which Mr. Kirby created or co-created the trove of characters.

    Pressed by Mr. Toberoff for a settlement, Marvel got fed up and sent the first volley with its January filing against the Kirby children in Federal District Court in Manhattan, seeking to end their efforts to regain long-term rights to the various characters. “Any contributions made by Kirby to the works at issue,” the complaint reads, “were works made for hire.”

    Case closed, as far as Marvel’s lawyers were concerned.

    The Kirbys fired back on March 9, filing a lawsuit with the Federal District Court in Los Angeles that argues the opposite. From 1958 to 1963, the period of Mr. Kirby’s prolific career that is under scrutiny, “Kirby worked solely on a freelance basis out of his own home, with his own instruments and materials, and thereby bore the financial risk of creating his copyrighted materials,” according to the lawsuit.

    Mr. Toberoff is poised to argue that Mr. Kirby — and, by extension, others like him — were selling their work on a freelance basis, rather than serving as hired hands.

    THE Kirby case is virtually certain to reopen the much-chewed-over history of Marvel to an examination even more intense than it has received from comic book fans. Many fans believe that Marvel and Stan Lee — who once wore varied professional hats, including editor in chief and publisher at Marvel — assigned too little credit to the contribution of an artist they like to call “King Kirby.” Mr. Kirby has drawn lavish praise from such luminaries as the novelist Michael Chabon, who has described him as “the Shakespeare or Cervantes of comic books.”

    Mark Evanier, who worked as an assistant to Mr. Kirby and wrote the book “Kirby: King of Comics,” said he expected to be called as a witness in the case and declined to comment. Mr. Evanier testified in support of the Jerome Siegel heirs in their suit against Warner.

    Mr. Lee, now 87, will surely have his own version of past events and is almost certain to become a witness in the case if it goes to court. Mr. Lee — who notably fought and won a profit-participation lawsuit with Marvel a decade ago — declined to be interviewed for this article.

    If Mr. Lee is called to testify about Mr. Kirby, his testimony could be complicated by an expanded business relationship with Disney. On Dec. 31, Disney announced that it had paid $2.5 million to increase an already existing stake in POW Entertainment (for Purveyors of Wonder), a company in which Mr. Lee is now a principal and the chief creative officer.

    POW develops new characters and stories for use in comic books, films, digital media and elsewhere. At the time, Disney said the investment was meant to obtain Mr. Lee’s help in mining the Marvel library.

    If Mr. Toberoff has his way, the picture painted in court will be one of chaos. He says that during Marvel’s early days — when Mr. Kirby was creating his superheroes — the company was a shoestring operation that was barely afloat.

    “There was no bullpen; there was a one-man office,” he said, contending that an industrywide decency code put so much pressure on Marvel that few at the company were worrying about contractual niceties with artists like Mr. Kirby that would have tidied up all of the legal issues surrounding work arrangements. “It’s easy to imagine that nobody at the time was thinking about work for hire.”
    I wonder if Disney realized just what a mess they were getting into before they bought Marvel.

  2. #2

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    Re: The Lawsuit Between Jack Kirby's heirs and Marvel / Disney Explained

    You are right, OB

    This will indeed become one BIG mess for Disney...



    Timekeeper

  3. #3

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    Re: The Lawsuit Between Jack Kirby's heirs and Marvel / Disney Explained

    Quote Originally Posted by Timekeeper View Post
    You are right, OB

    This will indeed become one BIG mess for Disney...



    Timekeeper
    Good.

    I don't like the current admin at all. If this Marvel purchase turns out to be a big blunder, then maybe we'll get new management, and hopefully it'll be good management.

  4. #4

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    Re: The Lawsuit Between Jack Kirby's heirs and Marvel / Disney Explained

    The Walt Disney Company has been able to change the laws of the United States to its own benefit, so I highly expect the same thing to happen here.


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