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Intellectual Property

Stan Lee East Coast Update: There Isn’t One

April 3, 2009
Comic Books, Copyright, Stan Lee
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The case of Abadin et al v. Marvel Characters, Inc. et al. was filed almost two months ago. After the initial flurry of filings and press releases, there have been very few developments in this case, which pits Marvel Comics creator Stan Lee against shareholders in Stan Lee Media, Inc. (SLMI). The last filing of any consequence was a consent order for substitution of counsel (Martin Garbus, who is the lawyer for the plaintiffs, joined the Eaton and Van Winkle as a partner) on March 31, 2009. At this pace, this litigation will drag on for a very long time.

A Note on Fair Use

March 23, 2009
Copyright, Fair Use
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“Fair use” is a phrase that often arises in conversations about copyright and the arts. Some of the mainstream use of the term, which leans towards a philosophical or political stance, indicates that there is a bit of confusion about what “fair use” means in practical terms. In the world of copyright law, “fair use” denotes a statutorily defined legal standard. See 17 U.S.C. § 107. “Fair use” is an affirmative defense. In other words, it is the defense an alleged copyright infringer presents after a lawsuit has been filed against them. A court decides whether a particular use is “fair” by weighing 4 factors, which are defined in the previously mentioned statute. 

Thus, those integrating elements of copyrighted works into their own artwork, recordings or films should be aware that any reliance on “fair use” arguments does nothing to prevent them from having to spend money in order to defend a copyright infringement suit. As the saying goes, “tell it to the judge.”

Heroes Versus Astropia: Copying, Infringement or None of the Above?

March 20, 2009
Copyright, Movies
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Gunnar B. Gudmundsson’s Astropia has only screened twice in the United States but this Icelandic film set box office receipts in its home country. The film’s plot revolves around a pampered young woman whose main source of money (her crooked boyfriend) dries up, thus forcing her to take a job in a comic book store. The only reason she gets the job is because of her looks; she knows nothing about comics or role-playing games. She slowly acclimates to the job and makes new, nerdy friends.


So, when a clip from the popular NBC television show Heroes appeared online that looked very similar to those featured in Astropia, the creators of the film were rather alarmed. This sense of dismay was heightened by the fact that the creative team is currently negotiating for a U.S. remake. This scenario provides a convenient excuse to examine the applicable doctrine for determining copyright infringement in film scripts, books or plays. A legal breakdown will occur in the next post but for now, compare the the clips from Heroes and Astropia shown below. Keep in mind that the analysis goes beyond surface comparisons.

1. Clip from Heroes


2. Scene from Astropia


2008 in Review: Documentary Lawsuit Provides Reminder That Historical Facts Cannot be Copyrighted

February 16, 2009
Copyright, Documentaries, Movies
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In Novak, et. al. v. Warner Bros. Pictures LLC, et. al., two documentarians who produced a film about the Marshall University football program claimed that Warner Brothers produced and released a motion picture, “We Are Marshall,” that infringed on their copyrights in the documentary.

On October 20, 2008, the court granted Warner Brother’s Motion for Summary Judgment. According to the Hon. Gary Allen Feess, who also presided over the Watchmen copyright lawsuit, the plaintiffs (the documentarians) had the burden to prove that the two films were “substantially similar” under current US copyright doctrine. Warner Brothers successfully argued that that the works are similar only in that they both deal with events surrounding a November 14, 1970 airplane crash, and that those events are historical facts in which no one can claim a copyright interest.

2008 in Review: Zombie Video Game Did Not Infringe on Dawn of the Dead Rights

February 13, 2009
Copyright, Intellectual Property, Trademark, Video Games
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In February 2008, Capcom, the creator of the video game Dead Rising filed a complaint against MKR Group, who own the copyrights in George Romero’s film Dawn of the Dead. Capcom’s complaint sought a declaratory judgment that it did not infringe any copyright, trademark, or other intellectual property rights of MKR in creating the video game. MKR later filed a third party complaint against Capcom, along with numerous counterclaims, including copyright infringement and violations of the Lanham Act. The case was docketed as Capcom Co., Ltd. v. MKR Group, Inc.

In an October 10, 2008 opinion, the court dismissed MKR Group’s copyright counterclaim. Using the objective “extrinsic test,” the court found that, as a matter of law, there was no substantial similarity between the Dead Rising video game and the Dawn of the Dead film. The court also dismissed MKR’s Lanham Act counterclaim. Although MKR sufficiently pled “source identifying elements,” the court found that a matter of law, those elements did not violate the Lanham Act. MKR’s remaining counterclaims were dismissed as preempted by the Copyright Act and the Lanham Act.

2008 in Review: Presence of Pinball Machine in Mel Gibson Movie Was Not Infringement

February 12, 2009
Copyright, Intellectual Property
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Gottlieb Development LLC distributes and sells the “Silver Slugger” pinball machine, which features copyrighted designs. The pinball machine appears in the background of a short scene in the 2000 Mel Gibson film What Women Want.

In response to portrayal of the machine in the film, Gottlieb filed various claims against the film’s distributor (Paramount), including copyright infringement. On Dec. 29, 2008, an opinion was issued in the case, which was docketed as Gottlieb Development LLC v. Paramount Pictures Corp. The court found that Paramount’s use of Gottlieb’s “Silver Slugger” pinball machine in the background of the scene in What Women Want was de minimis and that Gottlieb’s copyright claim was not actionable.

Stan Lee Media Versus Stan Lee and a Lot of Other People

January 31, 2009
Comic Books, Copyright, Marvel Comics, Stan Lee, Trademark
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As previously noted, Stan Lee is the target of a new comic book related lawsuit filed in New York on January 20, 2009. Stan Lee, however, is just one of many names in the lawsuit, which is docketed with the Southern District of New York as Abadin et al v. Marvel Characters, Inc. et al.

As this is a “derivative” suit, the plaintiffs are shareholders in Stan Lee Media, Inc. (SLMI), a Colorado corporation that ultimately went into bankruptcy. Besides Stan Lee, the parties on the defendant’s side of the “v.” are Marvel Entertainment, Inc., Marvel Enterprises, Inc., Marvel Characters, Joan Lee (Stan Lee’s wife), Joan C. Lee (Stan Lee’s daughter), Isaac Perlmutter (Marvel executive), Avi Arad (Marvel executive) and Arthur M. Lieberman (Marvel executive).

The complaint presents a mix of 13 federal and state claims ranging from copyright and trademark infringement to right of publicity violations. The plaintiffs are seeking $750 million dollars or more in damages (!), based on a supposed ownership interest in numerous comic book characters. The factual basis for the complaint is summarized below.

The suit arises from Lee’s involvement in Stan Lee Entertainment (SLE). SLE was eventually dissolved in a convoluted series of transactions; and SLMI succeeded to all SLE interests. As part of an employment agreement with SLE, Lee transferred the rights to a number of characters, trademarks and domain names to the company. Numerous assets were explicitly transferred in the original assignment agreement, including rights to such undeveloped comic book characters as The Accuser, Stan’s Evil Clone (Evil Clone), and The Drifter. SLMI shareholders are claiming that by terms of an assignment clause in Lee’s employment agreement, rights in prime Marvel comic book characters such Spiderman and The Incredible Hulk were also transferred to the company.

SLMI’s argument is interesting because as readers of this site may know, these suits are all about contracts and copyrights. SLMI claims that Lee created characters such as Spiderman outside of his scope of employment with Marvel (i.e., not as a work for hire). It is claimed that Lee had an interest as co-creator in these comic book characters at the time of contract formation with SLME, which was subsequently transferred to SLMI.

Certainly, if Lee retained an interest in the Marvel comic book characters as claimed (plaintiffs have to prove it), the assignment clause in the employment agreement cited in their complaint could be interpreted as giving them some rights in those characters (plaintiffs have to prove it). It is also interesting to note that in the related California case of QED LLC v. Nesfield, et. al, which involves a similar fight over SLMI assets, plaintiffs made no claims to Marvel assets. They only claimed an interest in materials explicitly outlined in their asset purchase agreement with Stan Lee; no claim was made to rights obtained via the employment agreement.

  1. Stan Lee Media, Inc. complaint

Stan Lee Ridiculed From the Sidelines

January 30, 2009
Comic Books, Copyright, Stan Lee, Trademark
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Rarely does a plaintiff issue a press release that comments on a defendant’s lack of success in a case to which they are not a party. This is exactly what happened on January 27, 2009 when a press release noting an unfavorable ruling in a lawsuit involving Marvel Comics founder Stan Lee hit the wires. The ruling in question, which was actually filed on January 20, 2009, is from the case of QED Production, LLC v. Nesfield, et al. The order can be accessed at the link provided at the bottom of this post. The press release, however, was not sent out by anyone involved in that case; it was sent out on behalf of plaintiffs in an entirely different case that was filed this week. This is revealed in the following excerpt:

Stan Lee, Arthur Lieberman and Marvel enterprises are being sued for looting the Estate of Stan Lee Media, Inc. in Chapter 11 Bankruptcy protection from 2001-2006. Martin Garbus, Esq., on behalf of shareholders of SLMI filed a Shareholder Derivative action on January 26, 2009 in Manhattan federal court claiming 50% percent ownership in such mega-popular Super Hero entertainment franchises as Spider Man, Iron Man and the X-Men.

An upcoming post will dig deeper into the case of QED Production, LLC v. Nesfield. Readers can expect posts about this new shareholder derivative suit as well.

  1. QED v. Nesfield Order Denying Plaintiff’s Motion for Partial Summary Judgment As to Standing


Superman Copyright Trial Raises Corporate Alter-Ego Questions

January 22, 2009
Comic Books, Copyright, DC Comics, Marvel Comics, Superman
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As exemplified by movies like The Dark Knight and Iron Man, having a comic book publisher and a film distribution company under a single corporate umbrella creates some powerful synergies. Marvel Comics has film licensing deals with Fox (X-Men) and Sony (Spiderman) but they began producing movies in 2006. In the process, Marvel subsidiaries like Marvel Characters, Inc. became content farms for Marvel Studios by supplying film rights for various characters. A slightly different example is provided by Warner Brothers, who bought DC Comics in 1969. Since the original Superman films, DC Comics has almost exclusively sold film rights to its titles to Warner Brothers. In fact, the Watchmen movie represents one of the rare instances where DC sold film rights to a company besides Warner Brothers. As Warner Brothers is now learning in Siegel v. Time Warner, vertical integration may lead to some problems in copyright litigation.

Among the remaining claims to be resolved in Siegel v. Time Warner is an accounting for profits derived from Superman copyrights. Specifically, both sides are battling over whether profits obtained from a Superman license that DC Comics sold to Warner Bros. Entertainment Inc (WBEI). In 1992, DC Comics sold an exclusive license in the Superman copyright to WBEI to for the remainder of its extended renewal term in movies, television, and home video. One year later, DC entered a separate exclusive license with WBEI’s television division.

Time Warner claims that the Siegels are entitled to an accounting of the profits made by DC Comics (in the form of the licensing fees it has collected), but are not entitled to an accounting of the profits WBEI made as a licensee. This is because licensees owe no duty of accounting to the non-licensor co-owner of a copyright.

The Siegels (through their lawyer Marc Toberoff), on the other hand, argue that WBEI took over DC Comics position as copyright holder when it bought the licenses. If this is the case, WBEI will be viewed as a co-owner of the Superman copyrights who owes an accounting to the Siegels. The argument does not work under general legal principles but it might apply in one situation: where the subsidiary is serving as “alter ego” of the parent corporation in order to avoid having to share fees with lawful co-owners. This issue will be addressed at the February 3, 2009 trial and the outcome might have interesting effects on the way some entertainment companies do business (with themselves).

Foreseeable Problems in Superman’s Future

January 12, 2009
Comic Books, Copyright, DC Comics, Marvel Comics, Superman
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The conclusion of the Siegel’s Superman lawsuit in the next few months is unlikely to signal the end of Superman copyright disputes. Jerome Siegel’s decedents own a one-half interest in the copyrights but the other half rests in the estate of Superman illustrator Joseph Shuster. On November 10, 1993, Mark Warren Peary (Shuster’s nephew and the court-appointed representative of his estate) filed notice with the US Copyright Office of intent to terminate the 1938 grant of the Superman copyright to Detective Comics and its successors (i.e., Time Warner) effective on October 26, 2013. As the date of termination approaches, this issue will undoubtedly heat up.