Siegel v. National Periodical Publications, Inc., 36

• Decision Date: 05 December 1974
• Docket Number: No. 36,D,36
• Citation: 508 F.2d 909
• Parties: Jerome SIEGEL and Joseph Shuster, Plaintiffs-Appellants, v. NATIONAL PERIODICAL PUBLICATIONS, INC., et al., Defendants-Appellees. ocket 73-2844.
• Court: U.S. Court of Appeals — Second Circuit

Page 909

508 F.2d 909

184 U.S.P.Q. 257

Jerome SIEGEL and Joseph Shuster, Plaintiffs-Appellants, v. NATIONAL PERIODICAL PUBLICATIONS, INC., et al., Defendants-Appellees.

No. 36, Docket 73-2844.

United States Court of Appeals, Second Circuit.

Argued Nov. 7, 1974.

Decided Dec. 5, 1974.

Gordon T. King, New York City (Coudert Brothers, New York City, Carleton G. Eldridge, Jr., New York City, of counsel), for plaintiffs-appellants.

Michael D. Hess, New York City (Weil, Gotshal & Manges, New York City, Edward C. Wallace, Heather G. Florence, New York City, of counsel), for defendants-appellees.

Philip B. Wattenberg, New York City, for Amicus Curiae Music Publishers' Association of the United States, Inc.

Irwin Karp, New York City, for Amicus Curiae Authors League of America, Inc.

Before KAUFMAN, Chief Judge, and ANDERSON and MULLIGAN, Circuit judges.

MULLIGAN, Circuit Judge:

This is an appeal from the granting of summary judgment dismissing the complaint upon the order of the Hon. Morris E. Lasker, filed on October 18, 1973. While the opinion below, 364 F.Supp. 1032 (S.D.N.Y.1973), sets forth the facts in detail, it will be necessary to repeat some of the more salient factual background.

I

The issue presented is who has the copyright renewal rights in the famous 'Superman' cartoon character. In 1933, plaintiff Jerome Siegel conceived the idea of Superman-- a person of unprecedented physical prowess dedicated to acts of derring-do in the public interest. In the same year, together with plaintiff Joseph Shuster, he created a Superman comic strip which consisted of several weeks' worth of material, some of which was completely 'inked in' and ready for publication, and some of which consisted of mere black-and-white pencil drawings. The new strip was not published at this time, although plaintiffs continued to collaborate on other strips that were then in publication.

One of plaintiffs' customers for these other strips was Detective Comics, Inc. (Detective), the predecessor in interest of the present defendant National Periodical Publications, Inc. (National). On December 4, 1937 Detective entered into a written employment contract with plaintiffs, whereby the latter would furnish two other strips exclusively to Detective for a period of two years. The plaintiffs further agreed 'that all of these products and work done by said Employee (plaintiffs) for said Employer (Detective) during said period of employment, shall be and become the sole and exclusive property of the Employer, and the Employer shall be deemed the sole creator thereof, the Employee acting entirely as the Employer's employee.' The agreement also gave Detective the right of first refusal for any new strips the plaintiffs might produce.

In 1938, for the first time, plaintiffs submitted their 1933 Superman materials to Detective to be considered for use in a new magazine, Action Comics. Detective asked plaintiffs to revise and expand the materials into a full-length production suitable for magazine publication, and this was done.

Thereafter, and prior to the first appearance of Superman in Action Comics, Detective prepared a written release, dated 1 March 1938, which was executed by plaintiffs and accepted by Detective. This release sold and transferred to Detective 'such work and strip (Superman), all good will attached thereto and exclusive rights to the use of the characters and story, continuity and title of strip contained therein, to you (Detective) and your assigns to have and hold forever and to be your exclusive property . . .. The intent hereof is to give you exclusive right to use and acknowledge that you own said characters or story and the use thereof exclusively . . ..'

On 19 December 1939, a supplemental employment agreement was entered into. It raised plaintiffs' compensation for the increasingly popular Superman strip, and in addition contained the following language:

That we, Detective Comics, Inc., are the sole and exclusive owners of the comic strip entitled 'Superman' . . . and to all rights of reproduction of all said comic strips and the titles and characters contained therein, and the continuity thereof, including but not limited to fields of magazine or other book publication, newspaper syndication . . . and all other form of reproduction. We have all right of copyright and all rights to secure copyright registration in respect of all such forms of reproduction . . ..

No further written agreements between the parties were ever executed, although plaintiffs were paid compensation at ever-increasing rates. By 1947, plaintiffs' total compensation for the strip exceeded $400,000.

In that year plaintiffs instituted an action against defendant National in the New York State Supreme Court, Westchester County, to annul the contracts between the parties for various reasons. The March 1938 agreement was specifically attacked as void for lack of mutuality and consideration. In addition, plaintiffs asked for a declaration of the rights of the parties in the Superman character.

Referee J. Addison Young, in an opinion dated 21 November 1947, concluded that the March 1938 agreement was valid and that it transferred to Detective 'all of plaintiffs' rights to Superman.' Shortly thereafter, on 12 April 1948, the referee signed findings of fact and conclusions of law. The first such conclusion stated:

1. By virtue of the instrument of March 1, 1938, plaintiffs transferred to Detective Comics, Inc. all of their rights in and to the comic strip Superman including the title, names, characters and concept . . . and by virtue of said instrument Detective Comics, Inc. became the absolute owner of the comic strip Superman . . ..

On 19 May 1948 the parties signed a stipulation which called for the payment of certain moneys by National to plaintiffs. In addition the stipulation repeated the above-quoted conclusion of law, and also stated that:

Defendant National Comics Publications, Inc. is the sole and exclusive owner of and has the sole and exclusive right to the use of the title Superman and to the conception, idea, continuity, pictorial representation and formula of the cartoon feature Superman as heretofore portrayed and published . . . and such sole and exclusive ownership includes, but is not limited to, the fields of book and magazine publications, (etc.) and all other forms of reproduction and presentation, whether now in existence or that may hereafter be created, together with the absolute right to license, sell, transfer or otherwise dispose of said rights.

The final consent judgment filed by the referee on 21 May 1948 incorporated the above stipulation and further

Declared and Adjudged that by virtue of the instrument of March 1, 1938, plaintiffs validly transferred to Detective Comics, Inc. . . . all of their rights in and to the comic strip Superman . . . and that by virtue of said instrument, said Detective Comics, Inc. became the absolute owner of the comic strip Superman . . . and it is further

Declared and Adjudged that defendant National Comics Publications, Inc. is the sole and exclusive owner of and has the sole and exclusive right to the use of the title . . . and . . . cartoon feature Superman . . . and it is further

Ordered and Adjudged that plaintiffs . . . be and they hereby are enjoined and restrained from creating, publishing, selling or distributing . . . any material of the nature heretofore created, produced or published under the title Superman . .

Plaintiffs now seek a declaration that they, and not defendant National, own the copyright renewal rights to the Superman strip. National counterclaims for a similar declaration in its favor. It is stipulated that both parties made timely renewal filings with the Register of Copyright.

The court below granted defendants summary judgment dismissing the complaint, primarily for three reasons:

1) The 1947 Westchester action bars relitigation of questions concerning the rights of the parties in Superman, because of res judicata;

2) Superman was a 'work for hire' within the meaning of the Copyright Act, 17 U.S.C. 26 (Supp.1974), and therefore the renewal rights are in the employer;

3) the various agreements between the parties consistently manifested an intention to give to Detective all of plaintiffs' rights in Superman, including the right of renewal of copyright, though it was never mentioned expressly in any of the agreements.

II

We are persuaded here that the court below properly decided that the state court judgment of May 21st, 1948 effectively estopped the plaintiffs from relitigating the issue of the ownership of the renewal copyright. ¹ In the state action the present plaintiffs sought, inter alia, a declaratory judgment with respect to the rights of the parties in Superman. After a trial the official referee rendered an opinion as well as detailed findings of fact and conclusions of law. An interlocutory judgment was entered on April 12, 1948 and notices of appeal were filed by both parties. Settlement negotiations then ensued which resulted in a stipulation of settlement and the entry of a final...