Copyrights, Trademarks, and Terminations: How Limiting Comic Book Characters in the Film Industry Reflects on Future Intellectual Property Issues for Character Law

FIU Law Review FIU Law Review

Volume 9 Number 2 Article 15

Spring 2014

Copyrights, Trademarks, and Terminations: How Limiting Comic Copyrights, Trademarks, and Terminations: How Limiting Comic

Book Characters in the Film Industry Re>ects on Future Book Characters in the Film Industry Re>ects on Future

Intellectual Property Issues for Character Law Intellectual Property Issues for Character Law

Joshua Saval

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Recommended Citation

Joshua Saval,

Copyrights, Trademarks, and Terminations: How Limiting Comic Book Characters in the

Film Industry Re>ects on Future Intellectual Property Issues for Character Law

, 9 FIU L. Rev. 405 (2014).

DOI: https://dx.doi.org/10.25148/lawrev.9.2.15

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Copyrights, Trademarks, and Terminations: How

Limiting Comic Book Characters in the Film Industry

Reflects on Future Intellectual Property Issues for

Character Law

Joshua Saval*

NTRODUCTION

On October 9, 2012, Stan Lee Media, Inc. sued Disney for copyright

infringement involving various Marvel characters including Spider-Man,

Iron Man, Thor, Captain America, Hulk, and the X-Men.

This lawsuit is

worth billions of dollars,

and is a good example of why intellectual

property rights are important, especially for the adaptation of comic book

characters in major film franchises.

This article will examine the market power

for comic book characters

in the film industry as an example for how fictional characters can be

locked up from future creative expression. It will be shown that Warner

Bros. Entertainment, Inc. (“WB”) and The Walt Disney Company

(“Disney”) are blocking the use of major comic book characters in the film

industry by having vertical agreements with Detective Comics, Inc. (“DC”)

* This comment was authored by Joshua A. Saval, a third-year law student at the Florida

International University College of Law. Special thanks to Professors Hannibal Travis and Stephen

Carlisle for providing valuable insights to this paper, as well as Joshua L. Simmons of Kirkland & Ellis

LLP and Charlotte Towne of Charlotte Towne, P.A. I also wish to thank the FIU Law Review Editorial

Board for their support and their dedication to furthering the success of FIU Law. I would also like to

give a special thanks to Michael Uslan, the man who influenced me to become a lawyer and follow

entertainment law. I would lastly like to thank my family and friends for putting up with all my talk of

comic book characters.

Complaint for Copyright Infringement, Stan Lee Media, Inc. v. The Walt Disney Co., No.

1:12-cv-02663 (D. Colo. Oct. 9, 2012), available at http://www-deadline-com.vimg.net/wp-

content/uploads/2012/10/Disney-Marvel-Stan-Lee-copyright-infringement-suit__121010000839.pdf.

Dominic Patten, Stan Lee’s Former Company Claims Disney Doesn’t Own Marvel

Superheroes; Wants Billions in Damages, D

EADLINE HOLLYWOOD DAILY (Oct. 9, 2012, 6:47 PM),

http://www.deadline.com/2012/10/stan-lee-media-lawsuit-walt-disney-marvel-superheroes-copyright-

infringement/#more-350808 (worth $5.5 billion).

Market power asks if a company has “foreclosed a sufficiently large, or crucial, part of the

market to effectively block competitors from entering or expanding to compete for new business.”

Sterling Merch., Inc. v. Nestle, S.A., 724 F. Supp. 2d 245, 263 (D. P.R. 2010). Market Share figures are

used “as initial guides for determining if foreclosure rates are facially dubious or presumably harmless,

but a significant share is only a presumptive signal of market power as entry barriers may be low.” Id.

The inference of market power requires a plaintiff to prove that a company “has a dominant share in a

relevant market, and that significant ‘entry barriers’ protect that market.” Id. (citing Broadcom Corp. v.

Qualcomm Inc., 501 F.3d 297, 307 (3d Cir. 2007).

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406 FIU Law Review [Vol. 9:405

and Marvel Entertainment, Inc. (“Marvel”). Due to WB owning DC and

Disney owning Marvel, each film studio owns the comic book publisher’s

library of characters and can refuse to license those characters while

continuing to exploit those characters in their own films.

Using these market conditions as an example, this article argues that

easier to implement as these are the only available options to free up these

characters from the film industry. Some companies argue for copyright

extension because of fear of the public domain, but these arguments fail

because characters can still be protected after entering the public domain.

Termination rights should be made easier for authors who try to retrieve the

rights to the characters that they created, because companies have available

exceptions to termination rights that allow them to continue to exploit

certain uses of the character.

Part I of this Comment will provide a brief outline of copyright and

trademark protection for characters in different media. Part I will also

describe changes in copyright law through the Copyright Act of 1976,

which added termination rights for authors, and the Supreme Court decision

in Eldred v. Ashcroft,

which approved the twenty-year extension in

Part II will analyze the market share for comic book characters in the

film industry and reveal how the most popular comic book characters are

being blocked from the market for other film studios besides WB and

Disney. This will affect the film industry by forcing studios who are not

allowed to use the most popular comic book characters to either use

independent comic book characters or create new ones, neither of which

have the mass appeal and financial potential as the famous characters.

Part III will argue that extending copyright protection is unnecessary,

because characters can still be protected after entering the public domain;

because an extension will not promote independent creation, public domain

works will not be overused or underused, and new uses of a public domain

work will not negatively affect the original work’s worth. Part III will also

argue that the termination right should be made easier to exercise because it

provides an incentive to authors to disseminate their work, and companies

can continue to exploit certain uses of the character for the full copyright

This article does not argue for legislative copyright reform in these areas of the law, but rather

argues for authors and companies to engage in more cohesive deal-making as well as more clear

judgments by courts on separating trademark and copyright law for characters. For an inclusive analysis

of possible copyright reforms, read W

ILLIAM PATRY, HOW TO FIX COPYRIGHT (2011), and JASON

MAZZONE, COPYFRAUD AND OTHER ABUSES OF INTELLECTUAL PROPERTY LAW (2011). See generally

Pamela Samuelson, Book Review: Is Copyright Reform Possible, 126 H

ARV. L. REV. 740, 740 (2013).

537 U.S. 186 (2003).

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2014] Comic Book Characters in the Film Industry 407

period.

Part IV will discuss the future of characters and how they can be

protected after they enter the public domain, or are returned to the author

after a successful termination. Characters that have additional original

expression added in derivative works can still be in the public domain or

terminated, but those increments of expression added to the characters

cannot be used if still under copyright protection. And when a character is

no longer protected by copyright law, the main source of protection for a

comic book character is trademark law. Use of trademark law to protect

public-domain or terminated characters needs to be limited to commercial

uses of the character where a company can show secondary meaning,

because using trademark law to prevent expressive uses of a character is

like granting a form of unlimited copyright.

ART I: OVERVIEW OF COPYRIGHT AND TRADEMARK PROTECTION FOR

COMIC BOOK CHARACTERS

Comic books are closer to the audiovisual medium than literary works

because of their pictorial elements. All a comic book needs to become a

film is movement and sound.

Comic book characters have graced the

silver screen in serials aired before movies and have also appeared on

television in cartoons and television shows.

It was not until 1978 that a

feature-length movie based on a comic book character was made.

Comic

book films are now one of the most popular genres with more than forty

films based on comic book characters made within the last twenty years

and another dozen planned for the next decade.

Marvel and DC are two of the oldest comic book publishers and

In fact, there has been a trend in creating motion comics, which combines the element of print

comics with animation and sound to create a film using the actual comic book art. See Chris Albrecht,

The Rise of Motion Comics Online,

GIGAOM (July 30, 2008, 12:56 PM),

http://gigaom.com/2008/07/30/the-rise-of-motion-comics-online/.

A nonexhaustive list featuring only several serials, shows, and cartoons of comic book

characters from before or around 1978: Batman serial from 1943, Batman 1960s TV series, Wonder

Woman 1970s TV series, Incredible Hulk 1970s-1980s TV series, Spider-Man 1960s cartoon, Captain

America 1940s serial, Captain Marvel 1940s serial. See IHC’s Ultimate Live-Action Comic Book Movie

and TV Database, IH

EARTCHAOS, http://www.iheartchaos.com/comic-book-movies (last visited May 7,

2014).

And with complete success. “Superman” the movie made more than $300 million worldwide.

See B

OX OFFICE MOJO, http://www.boxofficemojo.com/movies/?id=superman.htm (last visited March

7, 2014).

See Splash Page Team, Marvel vs. DC: Who’s Winning At The Box Office, MTV SPLASH PAGE

(Oct. 1, 2012, 10:25 AM), http://splashpage.mtv.com/2012/10/01/marvel-dc-box-office/ (list of Marvel

and DC films).

Disney is planning a slew of Marvel movies over the next several years. See Andrew Dyce,

Kevin Feige Talks Thanos and the Buildup to Marvel ‘Phase Three’, S

CREEN RANT (Sept. 21, 2012,

12:28 PM), http://screenrant.com/marvel-movies-thanos-rumors-phase-two-three/.

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408 FIU Law Review [Vol. 9:405

represent the majority of published comic books in America.

Marvel was

founded in 1933.

Marvel is home to almost 8,000 characters, including

the popular Iron Man, Spider-Man, Hulk and X-Men.

Marvel originally

licensed

the film rights to many of its characters before forming its own

movie studio in 2005.

DC was formed in 1934 as National Periodical

Publications, but later officially changed its name to DC in 1977.

houses thousands of popular characters, including Batman, Superman,

Wonder Woman, and Green Lantern.

Disney was formed in the 1920s and has grown to a very significant

size by now, owning a motion picture company, a publishing company,

amusement parks, and retail stores.

On August 31, 2009, Disney and

Marvel entered into a merger agreement, in which Disney would acquire

See Publisher Market Shares: 2012, DIAMOND COMIC DISTRIB.,

http://www.diamondcomics.com/Home/1/1/3/237?articleID=129876 (last visited Mar. 7, 2014) (Marvel

and DC represented more than 65% of comic book retail market share in 2012 and more than 73% of

comic book unit market share in 2012); see also Rich Johnston, Marvel Takes 2013 Comics Marketshare

Prize—But Not By Much, B

LEEDING COOL (Jan. 8, 2014),

http://www.bleedingcool.com/2014/01/08/marvel-takes-2013-comics-marketshare-prize-but-not-by-

much/ (For 2013, the two companies represented more than sixty-three percent of revenue raised and

more than seventy percent of comics sold).

Frederic Deraiche, Marvel and Disney: A Merger with Character, 2009:1 ILL. BUS. L.J. 15,

15-16, available at http://www.law.illinois.edu/bljournal/post/2009/09/20/Marvel-and-Disney-A-

Merger-with-Character.aspx.

Nicole J. Sudhindra, Marvel’s Superhero Licensing, WORLD INTELL. PROP. ORG. MAG., June

2012, at 22, 24, available at http://www.wipo.int/wipo_magazine/en/2012/03/article_0005.html.

A license is when a copyright owner allows another to use the property in a way that would

violate the owner’s right in the property without receiving any interest in the title, usually by paying a

contractual fee to the copyright owner. See Christopher M. Newman, A License is Not a “License Not to

Sue”: Disentangling Property and Contract in the Law of Copyright Licenses, 98 I

OWA L. REV. 1101,

1114-15 (2013). A big part of a character owner’s profits come from licensing agreements where other

companies use the character outside the original context, such as including the character in movies or

toys. Joshua L. Simmons, Catwoman or the Kingpin: Potential Reasons Comic Book Publishers Do Not

Enforce Their Copyrights Against Comic Book Infringers, 33 C

OLUM. J.L. & ARTS 267, 288-90 (2010).

Comic book publishers are not even in the business of selling comic books, but rather are used as a form

of advertising to broaden the appeal of the characters for licensing deals. Id. at 292-93. Films and

licensing represented 85.4% of Marvel’s gross profits in 2010. Id. at 303. Licensing of Disney

characters alone generates nearly twenty billion dollars per year in retail sales. Andrea K. Walker, The

Allure of SpongeBob, B

ALTIMORE SUN, Jan. 29, 2006, at 1D, available at LEXIS News Library,

BALSUN File.

Sudhindra, supra note 13, at 25. Marvel originally licensed out many heroes, including

Spider-Man, the X-Men, Thor, Iron Man, Hulk, Punisher, Blade, and Ghost Rider. All of these

characters have reverted back to Marvel except for Spider-Man (Sony), Fantastic Four (20th Century

Fox), and the X-Men (20th Century Fox).

Company Overview of DC Comics, Inc., BUSINESSWEEK,

http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=7621531 (last visited

May 8, 2014).

DC Comics, CHACHA, http://www.chacha.com/topic/dc-comics (last visited Mar. 2, 2014).

Deraiche, supra note 12, at 15.

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2014] Comic Book Characters in the Film Industry 409

Marvel for $4.24 billion.

Disney not only acquired the large cast of

Marvel characters,

but also the right to continue making movies based on

those characters.

WB is a major movie studio founded in 1923.

It has grown to

include an animation studio, a video game studio, and also owns DC as a

subsidiary of DC Entertainment.

Both DC and WB are owned by Time

Warner.

Nearly every major DC character film has been made by WB.

beginning with print and eventually providing protection for characters in

other media, including film.

See id.; see also Disney Completes Acquisition of Marvel Entertainment for $4.24 Billion,

ISNEY DREAMING (Dec. 31, 2009), http://www.disneydreaming.com/2009/12/31/disney-completes-

acquisition-of-marvel-entertainment-for-4-24-billion/.

All the ones that are not currently licensed out, which include Spider-Man, X-Men, and the

Fantastic Four. See Graeme McMillan, Kevin Feige on Multi-Studio Crossover: ‘Never Say Never’, T

HOLLYWOOD REPORTER HEAT VISION (Nov. 4, 2013, 2:24 PM),

http://www.hollywoodreporter.com/heat-vision/kevin-feige-multi-studio-marvel-653116. Disney also

had to make a deal with Paramount because the original deal with Marvel was that Paramount would

distribute the company’s films. Kim Masters, Disney to Distribute Marvel’s ‘The Avengers,’ ‘Iron Man

3’, T

HE HOLLYWOOD REPORTER (Oct. 18, 2010, 12:13 PM),

http://www.hollywoodreporter.com/news/disney-distribute-marvels-avengers-iron-31061. Disney

dominated the young girls market with its Disney princess line, but now it finally had a chance to enter

the young boys demographic with superheroes. See Jim Hill, Looking Back/Looking Ahead at Marvel

Entertainment’s Merger with The Walt Disney Company, J

IM HILL MEDIA (Apr. 9, 2012, 10:52 PM),

http://jimhillmedia.com/editor_in_chief1/b/jim_hill/archive/2012/04/09/looking-back-looking-ahead-at-

marvel-entertainment-s-merger-with-the-walt-disney-company.aspx#.UHjNT1H-iSo (“[Disney] really

did lack a property with strong young boy and teenage male affinity. [So by acquiring Marvel

Entertainment, Inc.], we’ve now filled that [distribution].”).

Disney oversees production, distributing, and marketing for Marvel. See Brent Lang & Lucas

Shaw, Disney Chooses Alan Horn as New Studio Chief, T

HE WRAP (May 31, 2012, 12:20 PM),

http://www.thewrap.com/movies/article/disney-chooses-alan-horn-new-studio-chief-42241. Marvel,

like Pixar, is a powerful unit under Disney that runs nearly autonomously. Ronald Grover, Disney

Names Hollywood Veteran Horn as Studio Boss, C

HI. TRIB. (May 31, 2012),

http://articles.chicagotribune.com/2012-05-31/entertainment/sns-rt-us-disney-studio-

alanhornbre84u17v-20120531_1_dick-cook-rich-ross-pixar-s-john-lasseter.

Company History, WARNER BROS, http://www.warnerbros.com/studio/about/company-

history.html (last visited Mar. 25, 2014).

Id.

Id.; see Siegel v. Warner Bros. Ent., 542 F. Supp. 2d 1098, 1144 (C.D. Cal. 2008) (“The

evidence before the Court reveals that the relevant entities are all closely related entities—parent

corporations, wholly and partially-owned subsidiaries, partners, sibling business entities (owned directly

or indirectly by the same parent)—although it is not entirely clear to the Court exactly what those

relationships have been at all relevant times. This fact alone raises a specter of a ‘sweetheart deal’

entered into by related entities in order to pay a less than market value fee for licensing valuable

copyrights.”).

DC films made by WB include Superman, Batman, Green Lantern, and Jonah Hex. See

Franchises: DC Comics, B

OX OFFICE MOJO,

http://boxofficemojo.com/franchises/chart/?id=dccomics.htm (last visited Mar. 25, 2014).

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410 FIU Law Review [Vol. 9:405

A. Copyright Law Protects Original and Creative Expression

Article I Section 8 of the Constitution, known as the Copyright Clause,

empowers Congress to “promote the Progress of Science and useful Arts”

while limiting the means Congress may adopt in exercising the enumerated

power.

Congress is limited to granting rights to authors for “limited

Times.”

The purpose of the power is the promotion of progress,

and

Congress makes use of the power by granting copyright to expressive

works.

The rationale for granting an author a copyright in his or her work

for a limited time is a trade-off between the costs of limiting access to a

work against the benefits of providing incentives to create the work in the

first place.

The 1976 Copyright Act provides authors with exclusive rights to

reproduce their works, to produce derivative works,

and to publicly

perform or display their works.

Works subject to copyright protection are

defined by the 1976 Act to include literary works, dramatic works, pictorial

and graphic works, motion pictures, and other audiovisual works.

However, copyright protection does not extend to an idea.

Only the

expression of an idea will be protected once it has been put into a tangible

medium.

This is known as the idea/expression dichotomy.

Congress has always been concerned with an original author’s right to

U.S. CONST. art. 1 § 8.

Id.

See Graham v. John Deere Co., 383 U.S. 1, 5 (1966) (holding that the “qualified authority”

that the Copyright Clause grants “is limited to the promotion of advances in [science and] the ‘useful

arts’”). Although this case was about patent law, Congress gets both the patent power and the copyright

power from the same clause, so both are only meant for “limited times.”

See Chris Sprigman, The Mouse that Ate the Public Domain: Disney, The Copyright Term

Extension Act, and Eldred v. Ashcroft, F

INDLAW (Mar. 5, 2002),

http://writ.news.findlaw.com/commentary/20020305_sprigman.html.

Michael Todd Helfand, When Mickey Mouse Is as Strong as Superman: The Convergence of

Intellectual Property Law to Protect Literary and Pictorial Characters, 44 S

TAN. L. REV. 623, 641

n.101 (1992).

A derivative work is a work based upon one or more preexisting works, such as a translation,

musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art

reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed,

or adapted. 17 U.S.C. § 101 (2011).

17 U.S.C. § 106 (2011).

17 U.S.C. § 102(a) (2011).

17 U.S.C. § 102(b) (2011).

17 U.S.C. § 106 (2011).

See Sid & Marty Krofft Television Prods, Inc. v. McDonalds Corp., 562 F.2d 1157, 1170 (9th

Cir. 1977) (“[T]he idea-expression dichotomy already serves to accommodate the competing interests of

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2014] Comic Book Characters in the Film Industry 411

use his or her own work, even when granting that right to a third party.

Under the 1909 Copyright Act, if an author granted a third party all of the

rights in a work during the first term of copyright protection, the copyright

would revert back to the author at the beginning of the renewal term.

But

this operation of law quickly faded away because it became standard for

authors to assign both the original term and the renewal term in their works

after the Supreme Court approved of this practice.

In the 1976 Act, Congress provided authors (or heirs) a means by

which they could terminate prior grants of copyrighted works in order to

renegotiate agreements that did not provide the author adequate

compensation for the value of the work.

The termination right is

“intended to relieve authors of the consequences of ill-advised and

unremunerative grants that had been made before the author had a fair

opportunity to appreciate the true value of his work product.”

The

termination right cannot be transferred to a third party by the author or the

author’s heirs because the termination right is inalienable.

Thus, even if a

contract states an author assigns or waives his right to terminate the grant of

has passed.

Congress had two rationales for the termination provisions.

The first

was to protect young authors who might assign their copyrights for little

compensation.

The second was to allow authors the right to recapture a

prior grant so they could exploit their works as if they had entered the

Edward E. Weiman et al., Copyright Termination for Noncopyright Majors: An Overview of

Termination Rights and Procedures, 24 N

O. 8 INTELL. PROP. & TECH. L.J. 3, 4 (2012).

See Copyright Act of 1909, ch. 320 § 23, 35 Stat. 1075, 1080 (1909). This reversion of the

renewal right would allow authors to renegotiate better deals depending on the new value of the work.

Michael J. Bales, The Grapes of Wrathful Heirs: Terminations of Transfers of Copyright and

“Agreements to the Contrary”, 27

CARDOZO ARTS & ENT. L.J. 663, 666 (2010); see also Jesse J.

Krueger, Copyright and Kryptonite: The Failings of Intellectual Property Law Through the Eyes of

Superman, 14 D

UQ. BUS. L.J. 229, 233 (2012).

See Fred Fisher Music Co. v. M. Witmark & Sons, 318 U.S. 643, 657-58 (1943).

See 17 U.S.C. §§ 203, 304(c) (2011); Bales, supra note 38, at 664.

Mills Music, Inc. v. Snyder, 469 U.S. 153, 172-73 (1985); see also Scorpio Music S.A. v.

Willis, No. 11cv1557, 2012 U.S. Dist. LEXIS 63858, at *10-11 (S.D. Cal. May 7, 2012) (“The purpose

of the Act was to safeguard authors against unremunerative transfers and address the unequal bargaining

positions of authors, resulting in part from the impossibility of determining a work’s value until it has

been exploited.”); Classic Media, Inc. v. Mewborn, 532 F.3d 978, 984 (9th Cir. 2008).

See Stewart v. Abend, 495 U.S. 207, 230 (1990).

The language in the termination provisions state that termination “may be effected

notwithstanding any agreement to the contrary.” 17 U.S.C. §§ 203, 304 (2011); see also Mewborn, 532

F.3d at 985 (“Thus, only once a copyright grant is terminated and the right is reverted to an author or his

statutory heirs may the reverted copyright interest be effectively assigned.”).

Weiman, supra note 37, at 4.

Id.

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412 FIU Law Review [Vol. 9:405

public domain.

The author might have intended for the work to fall into

the public domain in a set amount of time, but this intent was subverted

when Congress extended the time for copyright in the 1976 Act.

The

termination provisions therefore allow the author to take the right back.

One exception that prevents an author from asserting termination

rights is if the work is made for hire.

The reason is because in a work

made for hire, the employer, or person for whom the work was prepared is

considered the author, and therefore owns all of the rights afforded by

Another exception prevents an author from terminating rights

to derivative works and other works prepared under the authority of a grant

before its termination.

These works may be continued to be exploited

after termination of the original grant.

1. A Visual Depiction of a Character is Unique and Acquires

Protection

Before determining copyright infringement for a character, courts must

determine whether the character has copyright protection separate from the

work in which it was created.

Two tests have been developed to

Id.

Timing is a critical factor in terminating a grant of copyright, and there are different time

periods an author can terminate a grant. See Bales, supra note 38, at 667. Grants executed prior to

January 1, 1978, are governed by § 304 of the Copyright Act, which states that an author (or heirs) may

terminate the grant during any five-year period commencing on either January 1, 1978, or fifty-six years

from the original copyright date, whichever date is later. 17 U.S.C. § 304(c)(3) (2011). The Act also

provides a second attempt at termination for a five-year period beginning seventy-five years from the

original copyright date. 17 U.S.C. § 304(d)(2) (2011). This provision accompanied the Copyright Term

Extension Act and enabled an author to reclaim the rights after the twenty-year extension. See infra,

Section 1.C. Grants executed on or after January 1, 1978, are governed by § 203 of the Copyright Act,

which states that an author (or heirs) may terminate a grant at any time during the five-year period

commencing thirty-five years from the execution of the grant. 17 U.S.C. § 203(a)(3) (2011). However,

if the original grant of copyright concerned the right to publish a work, the termination period begins at

the end of thirty-five years from the date of publication or at the end of forty years from the date of

execution of the grant, whichever term ends earlier. Id. Most of the discussion in this article is limited

to works created before 1978 because we have only just reached the thirty-five-year mark from 1978,

but the implications of the case law regarding old works terminations will likely affect the new works

terminations.

17 U.S.C. §§ 203(a), 304(c). The Copyright Act defines a work made for hire as “a work

prepared by an employee within the scope of his or her employment or as a ‘specially ordered or

commissioned’” work, if it falls within one of nine specified categories in the statute and there is a

signed, written agreement that the work is a work made for hire. Id.; §§ 101(1), 101(2).

17 U.S.C. § 201(b) (2011).

17 U.S.C. §§ 203(b)(1), 304(c)(6)(a) (2011).

Id.

Jasmina Zecevic, Distinctly Delineated Fictional Characters that Constitute the Story Being

Told: Who Are They and Do They Deserve Independent Copyright Protection?, 8

VAND. J. ENT. &

TECH. L. 365, 366 (2006).

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determine whether to extend protection to a character existing outside its

original context.

The “sufficiently delineated” test asks whether a

character is sufficiently developed to qualify as protectable expression,

rather than a mere idea.

The effect of this test is to allow a judge to assess

the inherent worth of a character.

The second test for determining

character protection is the “story being told” test, which asks whether the

character is the story.

This is a very narrow standard because very rarely

will a character constitute an entire story rather than a part of the story.

After determining whether a character is copyrightable separate from

its story, courts look for copyright infringement by testing the degree of

similarity between the allegedly infringing work and the original work.

Analysis of similarity is relatively easy for visually depicted characters

because a fact finder can recognize the original character in the infringing

work, even if the characters are in different contexts.

Id.

Id. at 369-70. “In other words, the more detail with which a character is described, the greater

chance that it will, standing on its own apart from its original context, be afforded copyright protection.”

Helfand, supra note 30, at 632 n.44. This test was originally developed in Nichols v. Universal Pictures

Corp., 45 F.2d 119, 121 (2d. Cir. 1930). There, Judge Learned Hand held that “the less developed the

characters, the less they can be copyrighted; that is the penalty an author must bear for marking them too

indistinctly.” Id. at 121.

Zecevic, supra note 53, at 369-70. Unfortunately, this test diverts attention away from the

extent to which the alleged infringing material has copied the character because it turns the focus away

from the infringing character toward how much expression the original character has. Id. at 372-76.

Id. at 371-72. This test developed from Warner Bros. Pictures, Inc. v. Columbia Broad. Sys.,

216 F.2d 945, 950 (9th Cir. 1954). The Court held that “[i]t is conceivable that the character really

constitutes the story being told, but if the character is only the chessman in the game of telling the story

he is not within the area of the protection afforded by the copyright.” Id. at 950.

Zecevic, supra note 53, at 371-72.

Id. at 386. Under this analysis, a court will “separate the ideas inherent in the character from

the expression of those ideas. As applied to characters, this step would involve deciding whether the

character is just a general type, i.e. an idea, or whether the character evokes enough expression to be

protectable.” Id. at 385. Another analysis under the substantial similarity test is the extrinsic/intrinsic

steps. See Sid & Marty Krofft Television Prods., Inc. v. McDonald’s Corp., 562 F.2d 1157, 1164 (9th

Cir. 1977). The extrinsic test compares specific, objective criteria of two works on the basis of an

analytic dissection of the following elements of each work—plot, theme, dialogue, mood, setting, pace,

characters, and sequence of events. See id. The intrinsic part asks whether the “total concept and feel”

of the two works is substantially similar. See id. at 1164, 1167. Thus, a court looks at the similarities

and the attributes of the character, which in turn lowers the amount of similarity a plaintiff must show

for infringement. See id. at 1166-67. This isolated inquiry that simply asks whether the two characters

look and feel alike is similar to trademark’s concern of consumer confusion because it looks at the

characters from the consumer’s perspective. See id. at 1163-65.

Zecevic, supra note 53, at 369 (graphically depicted characters do not suffer from the same

elusiveness as non-graphically depicted literary characters because it is far simpler to make visual

comparisons than to compare abstractions). A graphic character based on a literary character is very

likely to receive separate copyright protection as a different character as long as there are distinct

differences between the two characters. See Brian Cronin, Comic Book Legends Revealed #345, C

OMIC

BOOK

RES. (Dec. 16, 2011, 9:25 AM), http://goodcomics.comicbookresources.com/2011/12/16/comic-

book-legends-revealed-345/ (Marvel created the character Red Sonja based off the character Red Sonya

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414 FIU Law Review [Vol. 9:405

One of the earliest cases dealing with infringement of a comic book

character is Detective Comics, Inc. v. Bruns Publications Inc.

DC sued

Bruns Publications because of the similarity between DC’s Superman and

Bruns’ Wonderman.

Both characters hid their suit beneath clothing,

deflected bullets, leapt great distances, and were champions of justice.

The only difference between the two was Superman’s costume was blue

and Wonderman’s costume was red.

The Court found that the character

Wonderman infringed on the character Superman because the infringing

character went beyond the general stereotype of a “benevolent Hercules”

and “appropriated the pictorial and literary details embodied in the

complainant’s copyrights.”

But the real issue in the case was how not to

monopolize the general attributes of a super-powered being to only one

company, while precluding copying of creative expression.

The Court

noted that “the complainant is not entitled to a monopoly of the mere

character of a ‘superman’ who is a blessing to mankind.”

The “story-being-told” test was limited in Walt Disney Productions v.

Air Pirates.

Disney sued Air Pirates claiming that its use of Disney

characters in an adult-oriented comic constituted copyright infringement.

Air Pirates argued that fictional characters are never copyrightable on their

own as a component to a work.

The Court limited the “story-being told”

test to literary characters because graphic characters are “more likely to

contain some unique elements of expression.”

Where an author adds a

visual image of a character, the difficulties associated with delineating the

character are reduced.

The court also took notice of the widespread public

recognition of the characters involved, including Mickey Mouse.

and could have received a separate copyright in the character if it chose to).

111 F.2d 432 (2d Cir. 1940).

Id. at 433.

Id.

See id.

Id.

Helfand, supra note 30, at 634.

Bruns, 111 F.2d at 434.

581 F.2d 751 (9th Cir. 1978).

Id. at 752.

Id. at 754.

Id. at 755.

See id.

Id. at 757-58. The issue with this analysis is that recognition of a character is not a factor in a

Thus, using trademark analysis for a copyright case makes the court focus less on the similarity of the

characters and more about public recognition of the characters. See Metro-Goldwyn-Mayer, Inc. v. Am.

Honda Motor Co., Inc., 900 F. Supp. 1287, 1301 (C.D. Cal. 1995) (finding in copyright infringement

case that popularity of James Bond character could lead consumers to believe that character endorsed an

automobile company). Courts have not historically paid enough attention to the differences between

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2014] Comic Book Characters in the Film Industry 415

television came up in Warner Bros., Inc. v. American Broadcasting

Companies, Inc.

The issue for the Court concerned the plaintiff’s

television show “Greatest American Hero” because the show appeared after

the success of the recent Superman film.

The Court found no substantial

similarity between the two characters under the “look and feel test” because

one was heroic and one was a bumbling everyman that was more like a

parody of the other hero.

The Court noted that a lack of substantial

similarity leaves little basis for asserting a likelihood of confusion under the

unfair competition analysis.

Eventually, copyright protection was extended to nearly all visually

depicted characters appearing in television or in movies.

The Court in

Olson concluded that a visual character is sufficiently expressive to warrant

This idea that a character is copyrightable separate

from its original work once it attains a visual image was reaffirmed in

Gaiman v. McFarlane,

where the Court held that once the comic book

character was drawn into an image, it had developed past the point of an

unprotectable idea, and was therefore copyrightable.

Even an inanimate

character, such as the Batmobile, can receive copyright protection as a

character even though it contains the functional elements of a car, because

of the fantastical elements used to create the vehicle.

Thus, visual

depictions of characters are protected, and comic book publishers can stop

third parties from creating derivative works such as replicas,

fan films,

or costumes based on the characters.

overlapping claims of copyright and trademark made by character owners, which has caused further

confusion for the case law. Kathryn M. Foley, Protecting Fictional Characters: Defining the Elusive

Trademark-Copyright Divide, 41

CONN. L. REV. 921, 945-46 (2009).

720 F.2d 231 (2d Cir. 1983).

Id. at 235-38.

Id. at 241-43.

Id. at 246.

Olson v. Nat’l Broad. Co., 855 F.2d 1446, 1452 (9th Cir. 1988).

Id. at 1451-52 (cases relied upon by the court include Walt Disney Prods. v. Air Pirates, 581

F.2d 751 (9th Cir. 1978) and Warner Bros. v. Am. Broad. Co., 720 F.2d 231 (2d Cir. 1983)).

360 F.3d 644 (7th Cir. 2004).

See id. at 661.

Eriq Gardner, Warner Bros. Wins Lawsuit Against Maker of Batmobile (Exclusive), THE

HOLLYWOOD REP. ESQUIRE (Feb. 8, 2013, 12:01 PM), http://www.hollywoodreporter.com/thr-

esq/batmobile-lawsuit-warner-bros-wins-419661.

See id.

See Steve Sunu, Marvel Sends Cease-And-Desist to Anticipated Punisher Fan Film, COMIC

BOOK RES. (Oct. 8, 2013, 11:05 AM), http://www.comicbookresources.com/?page=article&id=48344.

See Darryn Bonthuys, Marvel Drops the Lawsuit Hammer on Iron Man Cosplay Factory,

AZY GAMER (Dec. 19, 2013, 5:00 PM), http://www.lazygamer.net/24/marvel-drops-the-lawsuit-

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416 FIU Law Review [Vol. 9:405

2. The Termination Right for Characters Revolves Around

Renegotiated Agreements After the Right has Vested and Works

Made for Hire

One issue that comes with creating a comic book character is

determining who owns the copyright in that character.

The owner of a

character could either be the author who created it or the company for

which the author works, in the case of a work made for hire.

If the work

is made-for-hire, then the author cannot terminate a copyright grant because

the author never owned the copyright in the first place.

Many comic book

authors lament the current condition of having all character work done on a

work for hire basis, because then the comic book company can make

decisions about the character, without the author’s input or having to pay

the author a royalty.

Contracts clearly stating who the copyright vested in

were not always normal practice, and there have been several fact-intensive

cases between comic book authors and the companies they worked for that

have tried to determine whether the character was a work for hire.

Joe Simon, co-creator of Captain America, attempted to terminate the

As part of a settlement

agreement in 1969 regarding prior actions where Simon claimed he was the

author of the character, Simon acknowledged that his contribution to the

underlying work on the character was done as a work made for hire.

The

Second Circuit pointed out, in Marvel Characters, Inc. v. Simon, that the

hammer-on-iron-man-cosplay-factory/.

John Harleston, Adventures in Copyright: Works Made for Hire and Transfers of Ownership

Under the Copyright Act, 22-SEP

S.C. LAW. 16, 17 (2010) (“The first essential step in determining

ownership of copyright in a work, then, is to determine who the ‘author’ is.”).

See id.

See infra Section 1.A.

See Todd Allen, Greg Rucka Gets Increasingly Candid About Work For Hire Conditions,

Debunks Another Myth, T

HE BEAT (Sept. 20, 2012), http://comicsbeat.com/greg-rucka-gets-

increasingly-candid-about-work-for-hire-conditions-debunks-another-myth/; see also Rob Keyes,

Guardians of the Galaxy and Avengers 2 Will Both Feature Thanos,

SCREEN RANT (last updated Oct.

30, 2013, 9:21 PM), http://screenrant.com/avengers-2-guardians-galaxy-thanos-villains/2/. This was

also one of the issues in Gaiman v. McFarlane, 360 F.3d 644, 648 (7th Cir. 2004). Gaiman was

considered to have a copyright interest in the characters he created because he was to be treated better

than authors at the other comic book publishers where authors do not receive a copyright interest in

characters. Gaiman, 360 F.3d at 649-50.

Many of these popular characters were created before the 1976 Act, so the worry behind

termination did not exist and contracts were not always specific whether a work was made for hire or

whether it was only a grant of rights. Modern contracts take termination rights very seriously and work

done for Marvel and DC are considered works-made-for-hire. See Buckler v. Marvel Entm’t Group,

Inc., No. 91-CV-2167, 1992 WL 210101, *2-3 (S.D.N.Y. Aug. 17, 1992); see also In re Marvel Entm’t

Group, Inc., 254 B.R. 817, 820 (D. Del. 2000).

Marvel Characters, Inc. v. Simon, 310 F.3d 280, 284-85 (2d Cir. 2002).

Id. at 283.

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2014] Comic Book Characters in the Film Industry 417

work, “notwithstanding any agreement to the contrary.”

Simon presented

evidence that he was not an employee for hire when he created Captain

America, and the court held Simon was not bound by the statement in the

settlement agreement, because it was the type of “agreement to the

contrary” that was disavowed under the Copyright Act.

The court found

that allowing an agreement made years after the original work was

completed to retroactively deem it as a work for hire would frustrate

Congress’s intent in providing the termination right, and would likely

eliminate an author’s termination right because publishers could compel

authors to agree that work was created for hire.

The parties later settled

out-of-court, with the writer granting all rights to the character to Marvel,

and Marvel agreeing to return Simon’s name as the creator of the famous

superhero.

The Simon case has been limited to attempts to reclassify a

prior agreement between an author and a grantee.

The heirs of Jack Kirby attempted to terminate the grant of rights in

several comic book characters he helped create for Marvel, including the

Fantastic Four, the X-Men, and the Incredible Hulk.

The issue for the

court was “whether Kirby’s work qualifies as work for hire under the

Kirby was a freelance artist at the time, but he

did not draw a comic book story until it was approved by the comic writer

and he was paid.

100

The court concluded that Kirby’s works were,

therefore, works-for-hire because they were created at Marvel’s “instance

and expense.”

101

On appeal, the Second Circuit also held Kirby’s work to be

works-for-hire because they were made at Marvels “instance and expense”

with no agreement to the contrary.

102

The Superman character has been through several lawsuits determining

Id. at 289-92.

Id.

Id. at 290-91.

Ethan Sacks, Joe Simon Dead at 98: Created Captain America with Jack Kirby, DAILY NEWS

(Dec. 15, 2011, 2:55 PM), http://articles.nydailynews.com/2011-12-15/news/30522369_1_super-hero-

boy-commandos-newsboy-legion.

Shane Valenzi, It’s Only a Day Away: Rethinking Copyright Termination in a New Era, 53

IDEA 225, 239 (2013).

Marvel Worldwide, Inc. v. Kirby, 777 F. Supp. 2d 720, 724 (S.D.N.Y. 2011).

Id. at 725.

100

Id. at 739.

101

Id. at 738-43. The “instance and expense test” is used to determine the work made for hire

status of an independent contractor for works created under the 1909 Copyright Act. Estate of Hogarth

v. Edgar Rice Burroughs, Inc., 342 F.3d 149, 160-62 (2d Cir. 2003). For works created under the 1978

Act, courts will look to the general principles of common law agency. Comm. for Creative Non-

Violence v. Reid, 490 U.S. 730, 750-51 (1989); Estate of Hogarth, 342 F.3d at 161-62.

102

Marvel Characters, Inc. v. Kirby, 726 F.3d 119, 140-43 (2d. Cir. 2013).

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418 FIU Law Review [Vol. 9:405

the outcome of who owns the copyright in the character.

103

Jerry Siegel and

Joe Shuster created Superman in 1938 and sold the rights to the character to

National Periodical Publications (now DC) for $130.

104

The authors sued

DC in 1947, and again in 1969, seeking a determination that they owned the

character, but the courts held that DC was the absolute owner of the

superhero.

105

In 1997, the widow and daughter of Siegel served DC with

termination notices for Superman in hopes of finally recapturing the rights

to the character.

106

After nearly a decade of litigation, the court held that

the Siegel heirs had properly exercised their termination rights in

recapturing half of the copyright to Superman.

107

But on appeal, the Ninth

Circuit held the district judge had erred in finding the grant of rights

terminated because it did not take into account whether a letter from the

heirs’s attorney in 2001 “constituted an acceptance of terms negotiated

between the parties, and, thus was sufficient to create a contract.”

108

The

court held that the letter did constitute as an acceptance and that the parties

had come to an agreement transferring the full rights of Superman to DC.

109

Following Siegel’s initial lawsuit, the heirs of Shuster also filed

termination notices with the intent to reclaim the other half of the Superman

110

The issue in DC Comics v. Pacific Pictures Corp. was

whether an agreement between the heirs and DC in 1992 foreclosed the

103

See Siegel v. Warner Bros. Entm’t Inc., 542 F. Supp. 2d 1098, 1102 (C.D. Cal. 2008); DC

Comics v. Pac. Pictures Corp., No. CV 10–3633 ODW (RZx), 2012 WL 4936588, *1 (C.D. Cal. Mar.

26, 2012).

104

Siegel, 542 F. Supp. 2d at 1107.

105

Id. at 1112.

106

Id. at 1114.

107

Id. at 1145 (“After seventy years, Jerome Siegel’s heirs regain what he granted so long ago-

the copyright in the Superman material . . . .”).

108

Larson v. Warner Bros. Entm’t Inc., 504 Fed. App’x. 586, 587 (9th Cir. 2013).

109

Id. The Siegels then argued that the contract held to be binding is unenforceable because WB

never held up its end of the deal. Eriq Gardner, ‘Superman’ Heirs Still Hope to Grab Rights Back, T

HOLLYWOOD REP. ESQUIRE (Mar. 4, 2013, 5:00 AM), http://www.hollywoodreporter.com/thr-

esq/superman-lawsuit-heirs-still-hope-425728. The latest development in the case is that a federal judge

confirmed the enforceability of the 2001 agreement, but the Siegels may have claims against DC for

breaching the agreement in a separate breach-of-contract lawsuit. Eriq Gardner, Judge Confirms

Warner Bros. Owns Superman, The H

OLLYWOOD REP. ESQUIRE (Mar. 21, 2013, 4:17 PM),

http://www.hollywoodreporter.com/thr-esq/judge-confirms-warner-bros-owns-430323; see also Kevin

Melrose, DC Wins ‘Final’ Appeal in Long Battle over Superman Rights, C

OMIC BOOK RES. ROBOT 6

(Nov. 22, 2013, 7:00 AM), http://robot6.comicbookresources.com/2013/11/dc-wins-final-appeal-in-

long-battle-over-superman-rights/. At the time of this publication, there is still an appeal pending on

whether a valid copyright transfer was made. Eriq Gardner, Warner Bros. Gets Another Advantage in

Lingering Superman Rights Fight, T

HE HOLLY WOOD REP. ESQUIRE (Jan. 21, 2014, 2:03 PM),

http://www.hollywoodreporter.com/thr-esq/warner-bros-gets-advantage-lingering-672911.

110

DC Comics v. Pac. Pictures Corp., No. CV 10–3633 ODW (RZx), 2012 WL 4936588, at *1

(C.D. Cal. Oct. 17, 2012).

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2014] Comic Book Characters in the Film Industry 419

heirs’s rights to terminate the grant of copyright.

111

The court found that

the 1992 agreement settled all prior agreements and released DC from any

claims by Shuster’s heirs concerning the Superman copyright.

112

The key issue for a renegotiated agreement is, thus, whether “the

author’s termination right is vested (the author can terminate at that

moment), or remains conditional (the termination right will vest in the

future, but the author cannot terminate at the present time).”

113

When an

author or the author’s heirs re-grant copyrights during a time when they had

the opportunity to exercise their termination right, then courts will consider

the termination right to be used to renegotiate the terms of the agreement.

114

The notice of termination period for Superman began in 1984, so the

renegotiated agreements in 1992 for Shuster and 2001 for Siegel were

executed when the termination right had vested.

115

B. Trademark Law Protects Marks that Indicate Source and Reputation

The Lanham Act defines a trademark to include “any word, name,

111

Id. at *2-3. The agreement stated that DC would cover all of Shuster’s remaining debts and

pay Jean $25,000 a year for the rest of her life.

112

Id. at *5. The decision was affirmed later on appeal. See Melrose, supra note 109; see also

Jess Goodwin, Warner Bros. Wins Final Piece of ‘Superman’ Lawsuit, S

CREEN RANT,

http://screenrant.com/warner-bros-wins-superman-copyright-lawsuit/ (last visited Mar. 8, 2014). This

case is considered closed because the Ninth Circuit has denied a petition for rehearing. Kevin Melrose,

Appeals Court Denies Shuster Heirs Rehearing in Superman Battle, C

OMIC BOOK RES. ROBOT 6 (Jan.

21, 2014, 2:00 PM), http://robot6.comicbookresources.com/2014/01/appeals-court-denies-shuster-heirs-

rehearing-in-superman-battle/.

113

Valenzi, supra note 97, at 240. The termination right, therefore, may be considered a

contingent right because without the passage of the requisite period of time under the Copyright Act, an

author (or heirs) does not have the right to terminate and cannot contract away a right that is not yet

owned. Id. at 250.

114

Dallas F. Kratzer III, Up, Up & Away: How Siegel & Shuster’s Superman Was Contracted

Away & DC Comics Won the Day, 115

W. VA. L. REV. 1143, 1175 (2013). Other cases that have

followed this reasoning include termination cases for Winnie the Pooh and the works of John Steinbeck.

A.A. Milne’s son entered into an agreement in 1983 that specifically revoked prior agreements from

1930 and 1961 concerning the Winnie the Pooh character. Milne v. Stephen Slesinger, Inc., 430 F.3d

1036, 1040 (9th Cir. 2005). The Ninth Circuit concluded that the notice of termination served in 2002

by Milne’s granddaughter was ineffective because Milne’s son had used the possibility of termination as

leverage in forming the new agreement to get a better deal and the termination rights under § 304(d),

which the granddaughter was using, only applies to grants executed before 1978. Id. at 1045. John

Steinbeck executed an agreement that established the terms for the publication of some of his most

popular novels. Penguin Group (USA) Inc. v. Steinbeck, 537 F.3d 193, 196 (2d Cir. 2008). Steinbeck’s

widow entered into a new agreement in 1994 for continued publication of Steinbeck’s work, which

terminated and superseded any prior grants or rights in the works. Id. at 196-97. Steinbeck’s surviving

son and grandson served a termination notice in 2004, but the Second Circuit concluded that the 1994

agreement “eliminated the right to terminate the [prior grants] under sections 304(c) and (d).” Id. at 202.

For both of these cases, the right to terminate had vested at the time of the renegotiated agreement.

115

Kratzer, supra note 114, at 1181.

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420 FIU Law Review [Vol. 9:405

symbol, or device, . . . [used] to identify and distinguish . . . goods.”

116

Trademark law protects against a second comer’s use of the same mark, or

an imitation of a mark, where it is likely to cause consumer confusion,

mistake, or deception.

117

Trademarks function to identify one seller’s

goods, to signify that all such goods come from the same source, to signify

that all such goods are of an equal level of quality, and to distinguish such

goods from those sold by another.

118

Proof of consumer confusion is the

crucial element of a trademark infringement cause of action, and courts

employ a likelihood of confusion test that balances a number of factors in

order to determine if consumers are or likely will be misled by an allegedly

infringing mark.

119

One important function of a trademark is to reduce search costs for

consumers by embodying information such as the reputation of producers

or brands of goods.

120

Trademark law, therefore, balances the cost of

granting the exclusive use of a trademark with the benefit of reducing the

cost to consumers of searching for a specific product.

121

The purpose of

protecting identifying features in a trademark is not to provide

manufacturers with the incentive to develop those features, but to invest in

the manufacturer’s goodwill.

122

A significant difference between copyright and trademark protection is

that the duration of a trademark is potentially perpetual, provided that the

mark is not abandoned or does not lose its indicative qualities.

123

This

potential perpetuity reflects the understanding that trademarks benefit not

only the owner of the mark, but consumers who rely on identification of the

sponsoring or producing business entity when deciding on a product or

service.

124

116

Lanham Act § 45, 15 U.S.C. § 1127 (2006).

117

Lanham Act § 32, 15 U.S.C. § 1114 (2005).

118

Helfand, supra note 30, at 635-36. A mark’s indicative quality is considered secondary

meaning. “The prime element of secondary meaning is a mental association in buyers’ minds between

the alleged mark and a single source of the product.” 2

J. THOMAS MCCARTHY, MCCARTHY ON

TRADEMARKS AND UNFAIR COMPETITION § 15:5 (4th ed. 2014); see also Zecevic, supra note 53, at 378

(advantages of trademark and unfair competition laws are protection for the appearance and name of a

character and protection of the character even if it is in the public domain).

119

Helfand, supra, note 30, at 636.

120

William M. Landes & Richard A. Posner, Trademark Law: An Economic Perspective, 30 J.L.

& ECON. 265, 270 (1987).

121

Id. at 269.

122

Lee B. Burgunder, Trademark and Copyright: How Intimate Should the Close Association

Become?, 29 S

ANTA CLARA L. REV. 89, 95 (1989).

123

A mark that loses its secondary meaning by becoming a commonly used term will become

generic and can be used by anyone. 2

J. THOMAS MCCARTHY, MCCARTHY ON TRADEMARKS AND

UNFAIR COMPETITION § 12:1 (4th ed. 2004).

124

Helfand, supra note 30, at 637.

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Another source of protection for trademark holders is an action for

dilution, which concerns the weakening of the distinctive quality of a mark

or trade name.

125

Originally a claim under state law, Congress amended the

Lanham Act in 1996 by enacting the Federal Trademark Dilution Act

(FTDA).

126

Under the Lanham Act, dilution by tarnishment recognizes an

injury when a famous trademark is portrayed in an unwholesome or

unsavory context likely to evoke unflattering thoughts about the owner’s

product.

127

Dilution is different from trademark infringement in that it does not

require a showing of consumer confusion.

128

Dilution law, thus, protects

the distinctiveness of a famous owner’s trademark rather than the interest of

avoiding consumer confusion.

129

Fortunately, the FTDA has three statutory

exemptions for uses of a trademark that may be dilutive, but are,

nevertheless, permitted: comparative advertising, news reporting and

commentary, and noncommercial use.

130

Congress, therefore, did not

intend for trademark laws to impinge upon First Amendment rights of

critics and commentators because the dilution statute applies only to

commercial uses of a mark and explicitly states that the noncommercial use

of a mark is not a cause of action for trademark dilution.

131

These

exemptions were added to adequately address legitimate First Amendment

concerns by incorporating the concept of commercial speech into trademark

dilution analysis.

132

125

Lanham Act § 43, 15 U.S.C. § 1125(c) (2012).

126

Id.

127

Id.

128

Lanham Act § 43, 15 U.S.C. § 1125(c)(1) (2012).

129

4 J. THOMAS MCCARTHY, MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 24:67

(4th ed. 2014). When dilution was a state law claim, it could be used even where copyright law would

allow depiction of a character under fair use and where no trademark violation existed because there was

no confusion as to source. Dilution statutes had no First Amendment protections and were extremely

powerful for a character mark owner because dilution provided the most expansive protection against

the unauthorized use of fictional characters that became indicators of source. Porn parodies utilizing

famous characters were therefore considered infringements under dilution. See Pillsbury Co. v. Milky

Way Prods., 8 Media L. Rep. (BNA) 1016 (N.D. Ga. 1981) (determining that adult-oriented satire of

characters constituted fair use, but nevertheless violate state anti-dilution statute); see Edgar Rice

Burroughs, Inc. v. Manns Theatres, 195 U.S.P.Q. (BNA) 159 (C.D. Cal. 1976) (X-rated film entitled

“Tarz & Jane & Boy & Cheeta” diluted the value of the registered mark although no proof of confusion

had been provided). Under the federal dilution law, porn parodies are allowed using famous character

names. In fact, there is an entire porn production company dedicated to superhero porn parodies and the

films use the names and likenesses of many famous characters. See Vivid Superhero, W

IKIPEDIA,

http://en.wikipedia.org/wiki/Vivid_Superhero (last visited Mar. 15, 2013).

130

Lanham Act § 43, 15 U.S.C. 1125(c)(4)(B) (2012); see also Mattel, Inc. v. MCA Records,

296 F.3d 894, 904 (9th Cir. 2002).

131

Lamparello v. Falwell, 420 F.3d 309, 313 (4th Cir. 2005).

132

Id.

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422 FIU Law Review [Vol. 9:405

1. Trademark Law Protects Character Marks that Indicate the Source

for that Character but Still Allows Expressive, Noncommercial

Uses of the Mark

Visual characters have also been affirmed as being able to receive

trademark protection.

133

In a case about whether a publisher could

trademark drawings of comic book characters, the court held that a graphic

character can function as a protectable mark because of the publisher’s

efforts to associate each character in the public’s awareness with the

publisher.

134

Thus, to establish unfair competition

135

for a character mark,

the mark must emanate from a single source because “lack of a clear source

makes it uncertain that the character is truly a mark.”

136

A trademarked

character that loses copyright protection by falling into the public domain

can still be protected by trademark law as long as the character mark does

not become generic.

137

The stronger a character mark becomes, “the less interest the owner

133

2 J. THOMAS MCCARTHY, MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 10:42

(4th ed. 2014).

134

In re DC Comics, 689 F.2d 1042 (C.C.P.A. 1982). Comic book publishers trademark the

images of their characters to protect their stream of commerce and prevent dilution of the image.

Krueger, supra note 38, at 235 (“While copyright law protects the graphic representation of the

character, trademark law protects the association that the character suggests.”).

135

Unfair competition law is akin to trademark law, but specifically prohibits any false and

misleading designations, descriptions, or representations likely to cause confusion or mistake as to

source or association, not just the appropriation of distinctive symbols. Lanham Act § 43, 15 U.S.C. §

1125 (2012). Two questions must be answered to determine if infringement under trademark law and

unfair competition has taken place.

The first is whether the character has achieved “secondary meaning.”

The second question is whether there is a likelihood of confusion. See Zecevic, supra note 53, at 378.

Unfair competition was originally focused against false advertising, but has been read broadly to

prohibit any form of “passing off” that might lead to a false and misleading designation of origin. 5 J.

THOMAS MCCARTHY, MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION §§ 27:6—27.8. (4th

ed. 2014); see DC Comics, Inc. v. Filmation Assocs., 486 F. Supp. 1273 (S.D.N.Y. 1980) (adopting

view that § 43(a) protects characters, including all their traits and abilities, from copying and imitation

by others because an ingredient of the product can symbolize the plaintiff or its product in the public

mind). Courts also follow a likelihood of confusion test for unfair competition cases. 5 J.

THOMAS

MCCARTHY, MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 27:18 (4th ed. 2004).

136

Helfand, supra note 30, at 665; see also Universal City Studios, Inc. v. Nintendo Co., 746

F.2d 112, 116 n.5 (2d Cir. 1984) (noting the lower court’s finding “that the King Kong mark lacked

distinction and failed to identify the goods it represented as emanating from a particular source” because

the rights to the character were divided among a number of companies).

137

See Frederick Warne & Co. v. Book Sales, Inc., 481 F. Supp. 1191 (S.D.N.Y. 1979). The

defendant repackaged several public domain stories about the character Peter Rabbit and used the

original cover artwork. Id. at 1194. The court held that a copyrightable character that clearly identifies

the source of goods should not be excluded from trademark protection just because it fell into the public

domain. Id. at 1197. The court avoided the question of having a perpetual copyright on the characters

because the plaintiff sought only to protect the use of specific illustrations of the characters. Id. at 1197

n.3.

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has in tolerating uses that copyright alone otherwise allows.”

138

Once a

character has become an indicator of source, the owner of the mark will

have a great incentive to oversee all character-related uses of the mark

because unfavorable uses may damage the goodwill of the owner.

139

It is in

these situations that, more often than not, character mark owners will use

trademark law to circumvent what copyright law may allow under fair

use.

140

But trademark law is still subject to exemptions that may allow

unflattering uses of a mark.

141

C. The Copyright Term Extension Act Shrinks the Public Domain

The Copyright Term Extension Act (CTEA, also known as the Sonny

Bono Act, or the Mickey Mouse Act) was passed in 1998 and extended all

142

The duration of copyright for

works created on or after January 1, 1978, was extended to the author’s life

plus seventy years.

143

Works made by corporations or works made for hire

and works copyrighted after January 1, 1923, but before January 1, 1978,

received protection for ninety-five years.

144

The exclusive rights of the

owner are lost once the term of protection ends and the copyrighted work

falls into the public domain, making it available for anyone to use.

145

Tens

of thousands of works that were poised to enter the public domain are now

maintained by private ownership until at least 2019.

146

One of these

protected works is the most famous rodent in the world, Mickey Mouse.

147

138

Helfand, supra note 30, at 627.

139

Id.

140

See Walt Disney Prods. v. Air Pirates, 581 F.2d 751 (9th Cir. 1978); see also Edgar Rice

Burroughs, Inc. v. Metro-Goldwyn-Mayer, Inc., 519 F. Supp. 388 (S.D.N.Y. 1981) (trademark claims

against an adult satire of Tarzan).

141

Such as the trademark dilution exemptions. See Section 1.B. infra; see also Smith v. Wal-

Mart Stores, Inc., 537 F. Supp. 2d 1302 (N.D. Georgia 2008) (owner of domain names such as WAL-

QUEDA was a successful parody of WAL-MART trademark and not subject to dilution); Mattel, Inc. v.

MCA Records, Inc., 296 F.3d 894 (9th Cir. 2002) (Barbie Girl song was a successful parody of the

Barbie toy line trademark and not subject to trademark infringement or dilution); Mattel, Inc. v. Walking

Mountain Prod., 353 F.3d 792 (9th Cir. 2003) (use of Barbie doll in parodic photographs was fair use

and did not infringe or dilute Barbie toy line trademark).

142

Sprigman, supra note 29. It is also known as the Mickey Mouse Act because Disney heavily

lobbied for copyright extension since the famous rodent was going to fall into the public domain in

2003. That year, Disney donated more than $6.3 million in campaign funds.

143

Eldred v. Ashcroft, 537 U.S. 186, 195-96 (2003). The 1976 Act aligned with the Berne

Convention by granting protection for life of the author plus fifty years. Now that copyright lasts well

over one hundred years, the generation that grew up around the origination of a copyrighted good or

service will never get the chance to use its expressive qualities for their own works.

144

Id. Under the 1976 Act, these works received seventy-five years of protection.

145

Helfand, supra note 30, at 629.

146

Sprigman, supra note 29.

147

Id; see also Samuelson, supra note 4, at 746. Mickey Mouse first appeared in the 1928

cartoon short “Steamboat Willie.” The copyright in the cartoon, and also the character, was due to

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424 FIU Law Review [Vol. 9:405

Eric Eldred offered free access to public domain works online and

filed a challenge to the statute along with several other parties interested in

public domain works.

148

Eldred argued that Congress had exceeded its

power to grant copyrights for “limited times” in order to “promote the

Progress of Science,” but the Court held that Congress did not exceed its

grant of power because the term of protection was not perpetual and

therefore was “limited.”

149

The Court also gave deference to Congress and

found that the Constitution left it to Congress to implement an intellectual

property regime as it saw best to serve the purposes of commerce and the

150

Eldred also argued that allowing the CTEA to pass

would be opening the door for perpetual copyrights by letting Congress

constantly create more copyright extensions.

151

The Court found otherwise,

stating that nothing in the act was attempting to create a perpetual

152

In the end, the Court allowed Congress to extend the term of copyright

protection twenty years for both future works and retroactively.

153

This

granted an extended shield of protection to all comic book characters as

well. All the most popular characters, some dating back to the late

1930s,

154

now will be privately owned for a further period of time. This

expire in 2003. Now Mickey is protected until 2023. Disney was also going to lose the rights to Winnie

the Pooh, who was created in 1924 and would have entered the public domain in 1999 (now 2019).

Both characters are valued at $8 billion each. See Marvin Ammori, The Uneasy Case for Copyright

Extension, 16 H

ARV. J.L. & TECH. 287, 292 (2002). Disney lobbying for copyright extensions is ironic

considering many of its films are stories that have fallen into the public domain, including “Frozen,”

“Snow White”, “Sleeping Beauty”, “Beauty and the Beast”, “The Little Mermaid”, and “The Hunchback

of Notre Dame.”

148

Sprigman, supra note 29. Eldritch Press can be visited at http://www.eldritchpress.org/.

149

Eldred v. Ashcroft, 537 U.S. 186, 199 (2003). The Court also noted that Congress has applied

150

Id. at 205-08.

151

Id. at 208.

152

Id. at 209. The Court also distinguished between several cases Eldred used to try to establish

that extending copyright protection went against the promotion of science and copyright’s requirement

of originality. Id. at 210-17. Eldred’s last argument was that the statute was a content-neutral regulation

that was subject to heightened scrutiny under the First Amendment, but the Court found First

Amendment scrutiny to be unnecessary because Congress had not altered the traditional contours of

Amendment protection in the idea/expression dichotomy and fair use. Id. at 219-20.

153

See David E. Shapley, Congressional Authority over Intellectual Property Policy After Eldred

v. Ashcroft: Deference, Empty Limitations, and Risks to the Public Domain, 70 A

LB. L. REV. 1255

(2007).

154

Superman was first published in 1938. Superman, WIKIPEDIA,

http://en.wikipedia.org/wiki/Superman (last visited Mar. 8, 2014). Batman was first published in 1939.

Batman, W

IKIPEDIA, http://en.wikipedia.org/wiki/Batman (last visited Mar. 8, 2014). With the ninety-

five-year protection from the CTEA, these characters are poised to enter the public domain in 2033 and

2034, respectively. Without the CTEA, these characters would have lost copyright protection in 2013

and 2014.

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2014] Comic Book Characters in the Film Industry 425

allows copyright owners to continue to profit off their characters while

limiting the availability of the character to the rest of the market and the

public.

ART II: MARVEL AND DC DO NOT CREATE A DUOPOLY EVEN THOUGH

THE

STUDIOS BLOCK THE MOST POPULAR COMIC BOOK CHARACTERS IN

THE

FILM INDUSTRY

The acquisition, licensing, and enforcement of intellectual property

rights frequently requires attention to antitrust laws, which govern

agreements or practices that put a restraint on trade.

155

Antitrust laws are

used to prevent the monopolization of an idea or product, which is when an

individual or corporation holds a dominant share of a properly defined

relevant market.

156

Thus, while antitrust law penalizes monopolies to allow

room for competition, IP law grants monopolies as rewards for

innovation.

157

Most antitrust issues involve patent disputes, rather than copyright

disputes, because patents confer stronger protection against infringement.

158

Patents can also involve horizontal agreements, where competitors who

make the same product collude with each other to control prices or block

others from entering the market.

159

Patent rights are, therefore, enforced

most often against competitors in the same market.

160

Copyrights, on the

other hand, are often enforced against would-be buyers rather than

competitors because copyrights can only be infringed when a defendant

copies a plaintiff’s work, and a competitor can make a substitute for the

work without copying it.

161

Copyrights often involve vertical agreements,

where firms along the supply chain of a product collude to provide benefits

for each other.

162

Horizontal agreements between patent owners are more

dangerous than vertical agreements of copyright owners because “[t]he

antitrust risks of vertical agreements are significantly less than the risks of

155

Edward G. Biester III, Ground Rules and Hot Topics in Antitrust and Intellectual Property,

228-JUN

N.J. LAW. 18, 18-19 (2004).

156

Herbert Hovenkamp, Is Pepsi Really a Substitute for Coke? Market Definition in Antitrust

and IP Response: Markets in IP and Antitrust, 100

GEO. L.J. 2133, 2157 (2012); see Walker Process

Equip., Inc. v. Food Mach. & Chem. Corp., 382 U.S. 172, 176-78 (1965).

157

Sunny Woan, Antitrust in Wonderland: Regulating Markets of Innovation, 27 TEMP. J. SCI.

TECH. & ENVTL. L. 53, 58 (2008).

158

Bruce Abramson, Intellectual Property and the Alleged Collapsing of Aftermarkets, 38

UTGERS L.J. 399, 405 (2007).

159

Herbert Hovenkamp, et al., Anticompetitive Settlement of Intellectual Property Disputes, 87

MINN. L. REV. 1719, 1736 (2003).

160

Id.

161

Id. at 1736-37.

162

Id. at 1737.

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426 FIU Law Review [Vol. 9:405

horizontal agreements.”

163

The mergers of WB with DC and Disney with Marvel are vertical

agreements rather than horizontal agreements. The movie studios and

comic book publishers do not compete in the same market. One could

characterize that a competition could exist because they deal with characters

in different forms of media, but this analysis fails because the products of a

movie studio and comic book publisher are not substitutes.

164

If the price of

Disney products were to go up or become unavailable, their customers

would not go to Marvel as a substitute because the two serve different

markets. The relationships are vertical agreements because the acquisition

of the comic book publishers saves the film studios the costs of acquiring

the publisher’s properties for future use.

165

One of the goals of this article is to identify the market power that each

film studio has in the comic book movie genre. Defining a company’s

market power is part of an antitrust issue analysis of whether the company

or an agreement between companies is anticompetitive. Market power may

be demonstrated either by direct evidence of injury to competition inflicted

by a company’s market power or, more commonly, through circumstantial

evidence.

166

“To demonstrate market power circumstantially, a plaintiff

must: (1) define the relevant market, (2) show that the defendant owns a

dominant share of the market, and (3) show that there are significant

barriers to entry and show that existing competitors lack the capacity to

increase their output in the short run.”

167

A. Scope of the Relevant Market for the Film Industry is Broad, but

Scope of the Comic Book Genre is Based on Character Popularity

Defining the relevant market for the film industry, or even just the

genre of comic book films, poses a challenge. The film industry does not

set the prices for the tickets consumers purchase to see movies, so the

industry has no power over the price of its own products.

168

Price is not

indicative of the market because the price of a movie ticket for different

films is the same within a movie theater.

169

Studio executives struggle to

163

Id.

164

See Deraiche, supra note 12, at 17-18.

165

See id. at 19.

166

Rebel Oil Co. v. Atl. Richfield Co., 51 F.3d 1421, 1434 (9th Cir. 1995).

167

Id.

168

Jeff Tyson, How Movie Distribution Works, HOW STUFF WORKS,

http://entertainment.howstuffworks.com/movie-distribution2.htm (last visited Mar. 8, 2014).

169

See Derek Thompson, Why Do All Movie Tickets Cost the Same?, THE ATLANTIC (Jan. 3,

2012, 12:59 PM), http://www.theatlantic.com/business/archive/2012/01/why-do-all-movie-tickets-cost-

the-same/250762/.

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find what type of movie can bring in an audience while staying on a low

budget because they have no control over ticket prices.

170

The competition

is between each film rather than a single film against the entire market.

171

So if an infringement does occur, the market would not be the entire film

industry or even the comic book genre of films.

Because Disney and WB have exclusive rights to Marvel and DC

characters, each studio is its own market for them. While Disney and WB

will have exclusive use over the most popular comic book characters, they

each also will have their own monopoly on a large number of these

characters. If an infringer copies a Marvel character in a film, the infringer

is not harming WB, but rather only Disney because the character would be a

substitute for a Marvel character and not a DC character. The market is so

narrow that it either harms only Disney/Marvel or WB/DC. Thus, harm

done to one studio will not necessarily harm the other, so substitution issues

become complicated.

The market for the film industry is further complicated by the fact that

it has relatively high production costs, but can see little return on its

investment because movies can be downloaded illegally online.

172

But

these “onerous front-end investments” do not deter competition because the

film industry is not a business “dependent on a scarce commodity” and

several blockbuster films come out each year.

173

Therefore, the film

industry’s real power to make money comes from excluding others from

seeing its products rather than excluding others from making comic book

films.

174

A studio’s goal is then to provide the greatest value to a film so

more people will want to see it but exclude people from seeing the movie

unless they pay.

175

The more people who pay to see a movie, the more

money the movie will make and the more profit the studio will receive. The

value of the film industry’s products comes from the entertainment value of

the movies produced, which stems from the popularity of the comic book

character for comic book films. The popularity of the character is therefore

170

See Adam Davison, How Does the Film Industry Actually Make Money?, N.Y. TIMES, (June

26, 2012), http://www.nytimes.com/2012/07/01/magazine/how-does-the-film-industry-actually-make-

money.html.

171

See id.

172

“X-Men Origins: Wolverine,” which cost over $100 million to make, was leaked online a

month before its release and was watched more than 4.1 million times. Greg Sandoval, Will ‘Wolverine’

Benefit from (Bit)Torrent of Publicity?, CNET (May 1, 2009, 1:40 PM), http://news.cnet.com/8301-

1023_3-10231922-93.html; see also Simmons, supra note 14, at 299-301. The effect of losing money

from illegal downloads is only for blockbuster films while smaller movies actually benefit from piracy.

Ernesto, Megaupload Shutdown Hurt Box Office Revenues, T

ORRENT FREAK (Nov. 24, 2012),

https://torrentfreak.com/megaupload-shutdown-hurt-box-office-revenues-121124/.

173

United States v. Syufy Enters, 903 F.2d 659, 667 (9th Cir. 1990).

174

See Hovenkamp, supra note 156, at 2139.

175

See id.

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428 FIU Law Review [Vol. 9:405

an important factor in deciding whether to make a comic book film because

it can relate directly to how much money the movie may make.

B. Disney and WB Have Dominant Shares of the Comic Book Film

Market

The market for comic book movies is based upon the featured

characters since it is the popularity of those characters that is the main draw

for moviegoers.

176

But the most popular comic book characters are being

blocked from potential use in the film industry because WB and Disney

own them.

177

Comic characters can be licensed to studios to make a film,

such as Spider-Man being licensed to Columbia Pictures and X-Men being

licensed to Twentieth Century Fox.

178

But WB has always had a hand in

making DC comic book character films because the studio owns the comic

book publishing company.

179

Marvel was not linked with a studio until it

opened its internal studio to make films based off of its own characters, but

now all of Marvel’s characters that are not still licensed out to other studios

fall under Disney.

180

These vertical agreements show a dominant share of the market for

comic book characters because WB and Disney can now prevent others

from using DC and Marvel characters.

181

Having the two studios control

the great majority of characters constricts the comic book film market

because more films are made when more studios have access to the

characters.

182

Other characters are available from other comic book

176

See Benjamin A. Goldberger, How the “Summer of the Spinoff” Came to Be: The Branding

of Characters in American Mass Media, 23

LOY. L.A. ENT. L. REV. 301, 302 (2003) (“Although others

aspects of a work can be reused to create new works, it is the character that is most portable and most

profitable. Characters such as James Bond, Hercule Poirot, and even Bart Simpson transcend any one

work in which they appear. The thing that makes them so valuable is that they can appear over and over

again in a variety of media. With these brand name characters, the ability to use them in derivative

works is even more valuable than the right to sell any one particular work.”); see also Zahr K. Said,

Fixing Copyright in Characters: Literary Perspectives on a Legal Problem, 35 C

ARDOZO L. REV. 769,

771-72 (2013) (“Creating enduring characters increases the likelihood that audiences will buy

subsequent works. Subsequent works in which characters star may change, but the characters themselves

often remain effectively the same. Characters’ value to authors derives in substantial part from their

capacity for potential perpetual reuse in new works.”).

177

See supra notes 19-25 and accompanying text.

178

See supra note 15 and accompanying text.

179

See supra notes 23-25 and accompanying text.

180

See supra notes 15, 19-21 and accompanying text.

181

The vertical agreements are not giving too much power to the studios in the market share of

all films from movie studios because the percentages are more evenly distributed. Studio Market Share,

OX OFFICE MOJO,

http://www.boxofficemojo.com/studio/?view=company&view2=yearly&yr=2012&p=.htm (last visited

Mar. 8, 2014).

182

See Citizen, Marvel Studios Doesn’t Own the Rights to All of Their Characters . . . and

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publishers, but the majority of characters in the industry come from Marvel

and DC because those two publishers have more than an eighty percent

market share in the comic publishing industry.

183

But even though these

two companies have a high market share, that does not lead to monopoly

concerns without more evidence.

184

Though the film studio benefits from

the comic book publishing company to the exclusion of other film studios,

this type of vertical agreement does not meet the third requirement of

finding an anticompetitive market power.

C. Other Film Studios Have No Barriers to Entry or Lack of Capacity

to Enter the Comic Book Film Genre Because There are Substitutes

for the Most Popular Characters

The vertical agreements created between WB/DC and Disney/Marvel

are not a duopoly

185

over the most popular comic book characters even

though they are blocked from the rest of the film industry because there are

ample substitutes and other studios have the capacity to use these

That’s a Good Thing, COMIC BOOK MOVIE (July 18, 2013),

http://www.comicbookmovie.com/avengers/news/?a=83593. Starting from the popularity of comic

book films from 2000, thirty movies based on Marvel characters have been released in theaters by the

end of 2013 with another seven films planned until the end of 2015. List of Films Based on Marvel

Comics, W

IKIPEDIA, http://en.wikipedia.org/wiki/List_of_films_based_on_Marvel_Comics (last visited

Mar. 8, 2014). These films have been made by several different studios including Marvel Studios,

Universal Studios, Twentieth Century Fox, and Columbia Pictures. Id. Meanwhile, during the same time

period only nine movies based on DC characters have been released in theaters with only one more film

slated for the future. List of Films Based on DC Comics, W

IKIPEDIA,

http://en.wikipedia.org/wiki/List_of_films_based_on_DC_Comics (last visited Mar. 8, 2014). All of

these films were made by WB. Id. And, for some reason in this same time period, WB has made more

than twenty animated films based on DC characters. Id. Note that if the characters are split among

several studios instead of one, it is unlikely for a shared cinematic universe to exist. See infra note 301.

183

Richard Siklos, Spoiler Alert: Comic Books are Alive and Kicking, CNN MONEY (Oct. 13,

2008, 12:09 PM), http://money.cnn.com/2008/10/10/news/companies/siklos_marvel.fortune/; see also

supra note 11. Marvel will now be getting an even bigger share of the comic book market because

Disney has pulled its comic book publishing of Disney characters from another comic book publishing

company and gave it to Marvel. Ricky Brigante, Disney Ending Partnership with BOOM Studios,

Future of ‘Disney Afternoon’ Comics Uncertain, I

NSIDE THE MAGIC (Aug. 8, 2011),

http://www.insidethemagic.net/2011/08/disney-ending-partnership-with-boom-studios-future-of-disney-

afternoon-comics-uncertain/. Disney will also have Marvel begin publishing Star Wars comics, which

have been published by Dark Horse Comics for the past twenty years. Albert Ching, ‘Star Wars’

Comics Move to Marvel in 2015 , C

OMIC BOOK RES. (Jan. 3, 2014, 10:02 AM),

http://www.comicbookresources.com/?page=article&id=50069.

184

Oahu Gas Serv., Inc. v. Pac. Res., Inc., 838 F.2d 360, 366 (9th Cir. 1988), cert denied., 488

U.S. 870 (1988) (“A high market share, though it may ordinarily raise an inference of monopoly

power . . . will not do so in a market with low entry barriers or other evidence of a defendant’s inability

to control prices or exclude competitors.”).

185

A “duopoly” has been defined as “[a] market in which there are only two sellers of a

product.” B

LACK’S LAW DICTIONARY 577 (9th ed. 2009).

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430 FIU Law Review [Vol. 9:405

substitutes.

186

A court would likely balk at a studio claiming WB and

Disney had a duopoly over the most popular comic book characters because

there are hundreds of other comic book characters not owned by DC or

Marvel that have the potential to make an entertaining movie.

187

One could

question “whether there could ever be barriers of entry in an industry that

require[s] only imagination to create a product” because another studio can

also create a new character and publish it to the world.

188

Of course, none of

these comic book characters have the same name brand power as the others,

and that popularity is what a movie studio is hoping to use to make a profit

off the film.

189

The most popular comic book characters are essentially blocked from

the rest of the film industry because the characters are each owned by a

single film studio. Other studios are now left with the choice of either using

independent comic book characters that do not have the same popularity as

Marvel and DC characters or creating a new comic book style character

with a unique background and story.

190

While Marvel and DC characters are

186

The film studios can dominate the market share for comic book films until another studio

makes a film based off a lesser known comic book that turns out to be successful. Thus, it is not just

having market share that counts, but also being able to maintain that market share. See Oahu Gas, 838

F.2d at 366.

187

The concept of the market refers to the range of inter-firm rivalry and the degree of

substitution between these rivals rather than the power each of them holds. See Hovenkamp, supra note

156, at 2137. The impact can be assessed only by examining the range of alternatives that the market

offers. See id. at 2145. There are other comic book publishers besides Marvel and DC, such as Dark

Horse, Image, and Oni Press. These other publishers have comic books that can be made into movies as

well, such as Red, Hellboy, Sin City, The Crow, Spawn, and Scott Pilgrim.

188

See Deraiche, supra note 12, at 19.

189

The ironic twist is that other studios did have the chance to use Marvel and DC characters

before WB and Disney took exclusive control over them. Michael Uslan, an entertainment lawyer who

loved comics his entire life, spent ten years trying to get the original Batman movie made because no

studio was interested. M

ICHAEL USLAN, THE BOY WHO LOVED BATMAN: A MEMOIR, 181-200 (2011).

After the success of the Batman films, Marvel began licensing out its characters to several studios in

hopes to ride the wave of comic book film success. See supra note 14 and accompanying text. But it

took nearly a decade for some of these characters to hit the silver screen while some of them never did

and the rights reverted back to Marvel, where the comic book publishing comic took it upon itself to

make movies based of its characters. Popular Marvel characters that were available to other studios

before reverting back to Marvel include Hulk, Blade, Punisher, Thor, Iron Man, and Daredevil. The first

Hulk film was actually made by Universal Studios before the rights reverted back to Marvel so that it

could include the character in The Avengers. As for the characters that are currently still licensed out to

other studios, Disney is planning on getting those characters back under its name soon. Marvel Studios’

President Kevin Feige said that the contracts for all the licensed characters are all very specific and there

may be a time soon when they can revert. Ben Mortimer, The Avengers European Premiere Interview:

Marvel President Kevin Feige Gives Studios Update, H

EY U GUYS (Apr. 19, 2012),

http://www.heyuguys.co.uk/the-avengers-european-premiere-interview-producer-kevin-feige-gives-

marvel-studios-updates/.

190

See United States v. Microsoft Corp., 253 F.3d 34, 64 (D.C. Cir. 2001) (“[A]lthough

Microsoft did not bar its rivals from all means of distribution, it did bar them from the cost-efficient

ones.”).

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2014] Comic Book Characters in the Film Industry 431

currently limited to two film studios, the characters may become available

again either by entering the public domain once the character’s copyright

protection expires or by the author of the character terminating his grant of

rights given to the comic book publishing company. But there are several

impediments to these events happening. Characters may continue to

receive copyright protection as copyright duration is subject to change

because companies fear the public domain and will lobby for extensions.

Companies will also hold authors in court for years over termination

lawsuits.

PART

III: COPYRIGHT DURATION SHOULD NOT BE EXTENDED BECAUSE

PUBLIC DOMAIN WORKS CAN STILL BE PROTECTED AND TERMINATION

RIGHTS SHOULD BE MADE EASIER TO EXERCISE BECAUSE THEY CREATE

INCENTIVES FOR AUTHORS TO DISTRIBUTE THEIR WORK

A. Companies Should Not Fear the Public Domain Because Public

Domain Works Can Still Have Limited Protections While Not

Being Underused, Overused, or Tarnished

The Constitution says that copyright protection will be for a limited

time,

191

and the Supreme Court has interpreted the term “limited” to mean

as long as the term of protection is not perpetual.

192

But with copyright

protection now at life of the author plus seventy years, the term “limited” is

beginning to become stretched. The standard justification for copyright

protection is the incentive to create and the primary argument for extending

the copyright term would be that the incentive to create will be increased.

193

Other arguments include that works without protection will be under-

utilized because there will be no incentive to protect them, works in the

public domain will be overused, and poor quality versions of the work will

be made in the public domain that will tarnish the value of the underlying

work.

194

These arguments were later used by Congress

195

and the Supreme

Court

196

to justify the passage of the CTEA, but there is no evidence to

support these claims.

191

U.S. CONST. art. I § 8.

192

Eldred v. Ashcroft, 537 U.S. 186, 199-204 (2003).

193

See supra note 30 and accompanying text.

194

Christopher Buccafusco & Paul J. Heald, Do Bad Things Happen When Works Enter the

Public Domain?: Empirical Tests of Copyright Term Extension, 28

BERKELEY TECH. L.J. 1, 3 (2013).

195

See H.R. Rep. No. 105-452, at 4 (1998) (stating that retroactive extension would “provide

public”).

196

See Eldred, 537 U.S. at 207 (finding that Congress “rationally credited projections that

longer terms would encourage copyright holders to invest in . . . public distribution of their works”).

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432 FIU Law Review [Vol. 9:405

Extension of already existing copyrights does not promote progress or

provide incentives because already existing works cannot be created

anew.

197

“Congress is not empowered merely to provide copyright holders

with an additional boon—that is not ‘progress,’ but corporate welfare.”

198

Congress could have offered “the quid of an extended copyright in

exchange for the quo of the copyright holder taking steps to preserve the

copyrighted work . . . .”

199

But there is no such quid pro quo as the statute

is a giveaway of extended protection to copyright owners.

200

As for new

works created after the act, the incentive is likely very little as the author of

the work will no longer be around to reap the benefits of the product.

201

Works without copyright protection will not be under-utilized because

they will be used as often as protected works. The argument is based on the

fact that without protection anyone can use the work and the copyright

owner will not be able to recoup his investment costs.

202

Without a method

for recouping investment costs, “commercializers will have inadequate

incentives to continue production and distribution of older works.”

203

For

these reasons, works in the public domain will be underproduced. But

evidence points out that works in the public domain are just as utilized as

works with copyright protection. Researchers found that public domain

works in print outnumbered copyrighted works in print in a study done to

197

Samuelson, supra note 4, at 746 (“It was logically infeasible for a twenty-year term extension

to provide incentives to create new works that were already in existence. Even applied prospectively,

the CTEA could have no more than negligible incentive effects on authors contemplating whether to

create new works.”); see also Jennifer Jenkins, In Ambiguous Battle: The Promise (and Pathos) of

Public Domain Day, 2014, 12

DUKE L. & TECH. REV. 1, 6-7 (2013). These negligible incentive effects

do not outweigh the cost imposed on society by limiting the public domain because the majority of

copyrighted works have relatively short commercial lives and long terms “impose transaction costs on

others, provide windfalls to rights holders, and inhibit the creation of new works based upon expression

from earlier works . . . .” Samuelson, supra note 4, at 747. A Congressional Research Service study

suggested that only two percent of works between fifty-five and seventy-five years old retain

commercial value. Eldred v. Ashcroft, 537 U.S. 186, 248 (2003) (Breyer, J., dissenting). Even under

the renewal term for copyright, eighty-five percent of all registered copyrights were not renewed and

that figure was ninety-three percent for book copyrights. James Boyle, We Need to Start Seeing Other

Futures . . ., H

UFFINGTON POST (Jan. 14, 2014, 1:25 PM), http://www.huffingtonpost.com/james-

boyle/copyright-week_b_4596424.html.

198

Sprigman, supra note 29.

199

Id.

200

Id.

201

See Thomas F. Cotter, The Procompetitive Interest in Intellectual Property Law, 48 WM. &

MARY L. REV. 483, 532 (2006) (“The likelihood that this extension serves a public purpose with respect

to future works is slim, given the small present value of an additional twenty years’ worth of protection

in the distant future; the likelihood it serves a public purpose with respect to existing works is even

slimmer, though theoretically possible.”).

202

Buccafusco, supra note 194, at 13.

203

Id. at 14.

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2014] Comic Book Characters in the Film Industry 433

measure the percentage of best seller books in older works.

204

Another

study tracked the use of public domain songs in films and found that public

domain songs were exploited as equally as copyrighted songs.

205

Many

films are based on public domain stories

206

and even comic book characters

in the public domain have seen new life,

207

which goes against the theory of

under-utilization. Therefore, “keeping older works under copyright

frequently frustrates, rather than promotes, their maintenance and

dissemination.”

208

The “tragedy of the commons” argument that public domain works

will be overused fails because the works will not be used so much as to

deplete their value. This theory rests on the assumption that the value of a

work is finite and exhaustible, and that the work will be exploited until its

value is diminished.

209

According to this assumption, a creative work has

an increasing value only up to a certain number of uses in a given period,

and once that level is met the work’s value diminishes, so a copyright

owner has the incentive to not over-exploit the work.

210

This argument fails

because studies suggest that repeated exposure to a work may actually

increase its attractiveness.

211

If a song or comic book character is

considered to have a maximum level of exploitation, then why are popular

songs played the most

212

and comic book characters utilized in a variety of

204

Paul J. Heald, Property Rights and the Efficient Exploitation of Copyrighted Works: An

Empirical Analysis of Public Domain and Copyrighted Fiction Bestsellers, 92

MINN. L. REV. 1031,

1046-50 (2008) (ninety-eight percent of the bestsellers from the public domain were in print compared

to only seventy-two percent of copyrighted bestsellers of older works).

205

Paul J. Heald, Does the Song Remain the Same? An Empirical Study of Bestselling Musical

Compositions (1913-1932) and Their Use in Cinema (1968-2007), 60

CASE. W. RES. L. REV. 1, 19

(2009).

206

See supra note 147 and accompanying text. Snow White is in the public domain despite

Disney having a copyright in its animated film, and there have been several other Snow White movies

(with two released in 2012). See infra note 280.

207

The character, Moon Girl, entered the public domain and was not seen again until 2010.

Moon Girl, W

IKIPEDIA, http://en.wikipedia.org/wiki/Moon_Girl (last visited Mar. 8, 2014).

208

Jenkins, supra note 197, at 7.

209

Buccafusco, supra note 194, at 16.

210

Id. at 17.

211

See Robert B. Zajonc, Attitudinal Effects of Mere Exposure, 9 J. PERSONALITY & SOC.

PSYCHOL. 1, 1 (1968) (“[M]ere repeated exposure of the individual to a stimulus is a sufficient condition

for the enhancement of his attitude toward it.”). This relates as a direct example for the film industry

because the movie “It’s A Wonderful Life” was considered a failure, but because it entered the public

domain and was aired on several channels during the holidays for years, it is now considered a holiday

classic. Why Wonderful Life Comes but Once a Year, S

LATE (Dec. 21, 1999, 10:37 PM),

http://www.slate.com/articles/news_and_politics/explainer/1999/12/why_wonderful_life_comes_but_on

ce_a_year.html.

212

Though the most popular songs are now caught on YouTube or Twitter before they hit the

radio. Ben Sisario, The New Rise of a Summer Hit: Tweet It Maybe, N.Y.

TIMES (Aug., 21, 2012),

http://www.nytimes.com/2012/08/22/business/media/how-call-me-maybe-and-social-media-are-

upending-music.html?_r=0.

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434 FIU Law Review [Vol. 9:405

media for generations?

213

It is because if something has value, even

order to gain the most profit.

The tarnishment theory behind not letting works enter the public

domain fails because a poor quality version of the work does not affect the

judgment of consumers about the quality or value of the original work. The

idea behind this argument is that creative works can lose their value through

inappropriate uses.

214

The number one example for this argument is that of

porn parodies. But this fails because in a time when comic book character

films are as popular as ever, an entire pornography studio has been set up

for years producing porn parodies of these characters.

215

Vivid Superhero

has created porn parodies of Batman, Superman, Spider-Man, and The

Avengers.

216

Another argument based off the tarnishment theory is that poor

quality productions of the work will debase the value of the original. But

this argument also fails because there have been poor quality productions of

copyrighted works, such as the film “Eragon,”

217

yet the original work is

still popular.

218

For the foregoing reasons, copyright duration should not be extended

anymore. The arguments used by the Supreme Court and Congress fail a

reasonable analysis because there is no evidence to back them up.

Extending copyright duration for creative works fails for comic book

characters because the characters are all heavily exploited while still under

be exploited.

219

Fears that there will be no incentives to protect the

213

Superman first appeared in 1938 and the character’s film franchise was recently rebooted in

2013. Between then and now, you can find thousands of comic books, newspaper strips, toys, cartoons

and other Superman merchandise as well as the dozens of character-related movies and television

shows. This amount of exploitation is for just one of hundreds of popular comic book characters. These

characters are most likely going to be exploited even after copyright protection ends. See infra Section

IV. Where exactly does this maximum level of exploitation fit in?

214

Buccafusco, supra note 194, at 17-18.

215

See supra note 129 and accompanying text.

216

Vivid Entertainment Announces New Superhero Imprint, VIVID (May 2, 2010),

http://vivid.com/news/2010-05-10/vivid-entertainment-announces-new-superhero-imprint/. (Warning:

this is an adult NSFW website).

217

While the books have received favorable reviews, with the latest coming out in 2011, the

2006 movie was universally panned. Eragon, R

OTTEN TOMATOES,

http://www.rottentomatoes.com/m/eragon/ (last visited Mar. 8, 2014).

218

This has happened in the comic book character genre as well. Films such as “Superman

Returns” and “X-Men: The Last Stand” received generally unfavorable reviews, which eventually led to

the studios focusing on reboots or spin-offs instead of returning to the disliked continuity.

219

Character owners can still use derivative works to protect characters that have entered the

public domain or had their grant of rights terminated. New, protectable expression added to the character

in derivative works do not fall into the public domain with the original character story and are not a part

of the author’s original grant of rights, thus those aspects of the character are still a protected derivative

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2014] Comic Book Characters in the Film Industry 435

characters more or that they will be overused/misused are just fears that

they used to. Copyright duration should, therefore, stay as is or should

create a structure where works enter the public domain after an author’s

death, unless the author’s heirs register their interests with the Copyright

Office for full copyright duration.

220

B. Termination Rights Should Be Made Easier to Exercise Because

Companies Can Still Exploit the Character in Derivative Works and

Can Exhaust an Author’s Right to Terminate in Renegotiated

Agreements

Copyrighted works are not valuable for an author without a means of

exploiting the work, so it is common for an author to assign the copyright to

a publisher.

221

“The central problem with this arrangement is in the

difficulty of determining the value of a work before its publication . . .

[u]nlike real property or personal property, it is nearly incapable of

determining the accurate monetary value of an expressive work prior to its

exploitation.”

222

Due to this difficulty, an author may assign the copyright

to a work for much less than the creative work’s real value.

223

Termination

rights thus protect the works of authors from being exploited by large

companies and corporations. It allows authors to renegotiate deals based

off of the real value of their works after the company has exploited the work

for several years and the real value of the work is easier to determine. But

the real value of the work is undetermined at the time of the deal for both

sides because a company may secure copyrights to a number of works that

prove unsuccessful and may well pay the author more for the work than it is

actually worth.

224

A company would believe that it should receive the full

work. Helfand, supra note 30, at 655 n.181. Comic book characters evolve and change over time by

changing costumes, names, or having another character adopt the hero name altogether. Id. These

character evolutions are still protectable even if the character’s original work is no longer afforded

the character entered the public domain but several of the character’s stories still remain in copyright

under the incremental expression test. Eriq Gardner, Sherlock Holmes: Judge Declares Popular

Detective in Public Domain, T

HE HOLLYWOOD REP. ESQUIRE (Dec. 27, 2013, 11:41 AM),

http://www.hollywoodreporter.com/thr-esq/sherlock-holmes-judge-declares-popular-667755. Only the

additions to the character from the books after 1923 are copyrighted while the original version of the

character is free for the public. Id. For more on the incremental expression test, see Section IV.A.

220

Eriq Gardner, U.S. Congressmen Told About ‘Next Great Copyright Act’ at Hearing, THE

HOLLYWOOD REP. ESQUIRE (Mar. 20, 2013, 3:51 PM), http://www.hollywoodreporter.com/thr-esq/us-

congressmen-told-next-great-430091.

221

Bales, supra note 38, at 663.

222

Id.

223

Id. at 663-64.

224

Id. at 664.

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436 FIU Law Review [Vol. 9:405

benefit of the work without the fear of termination after successfully

exploiting the work. But the author should be allowed to share some of the

benefits as a reward for the initial creation and as an incentive to create

more works.

Termination rights benefit authors because it gives them extra

bargaining power when the large company or corporation usually has the

upper hand in copyright transfers.

225

When Jerry Siegel and Joe Shuster

sold the rights to the Superman character to DC for $130 in 1938, “no one

could have foreseen that Superman would remain a comic mainstay for the

next 80-plus years, be the star character in several major motion pictures,

and otherwise anchor a franchise worth in excess of $1 billion.”

226

Termination rights provide an incentive for authors to create and

disseminate new works because they will have a chance of renegotiating on

the work’s real value.

227

This also allows for renegotiating in the face of the

company exploiting the work in new technologies that were unavailable

during the initial deal.

228

An argument against termination rights is that allowing authors or

heirs to recapture the rights to a creative work is inconsistent with

promoting certainty of copyright ownership because of the unique way that

companies develop works once they own them.

229

“[W]hen an author

creates a fictional character and sells it to a media company, the media

company adds new original material to the character over the course of

hundreds of successive comic book issues, films, or television episodes,

thereby developing the character’s history, personality, beliefs, and

mission.”

230

Authors and heirs thus receive a “substantial windfall” because

the character only shares nominal ties to the author’s original creative

investment.

231

This argument fails because an author’s initial creative

investment created the bedrock upon which further creative expression is

only added to, and also because companies have a variety of compromises

225

See generally supra notes 40-48 and accompanying text.

226

Weiman, supra note 37, at 4.

227

Lydia Pallas Loren, Renegotiating the Copyright Deal in the Shadow of the “Inalienable”

Right to Terminate, 62 F

LA. L. REV. 1329, 1349 (2010). This argument only works for the § 203

termination right because it is the right for new works. The argument for the § 304 termination right is

that it grants in the author the chance to use the renewal term if that was contracted away and that the

termination right applies to an unanticipated extension in the duration of copyright that benefitted the

owner of the copyright, not the author. Id. at 1351-52.

228

Id. When Siegel and Shuster signed away their rights to Superman for comic book adaptation

in 1938, they did not know they would be signing away their rights to the characters in unforeseen

technologies such as television or the Internet.

229

See Vincent James Scipior, The Amazing Spider-Man: Trapped in the Tangled Web of the

Termination Provisions, 2011 W

IS. L. REV. 67, 70-72 (2011).

230

Id. at 72.

231

Id; see also Krueger, supra note 38, at 244-45.

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and exceptions that benefit them to the exclusion of the author.

One of the compromises courts have created is that agreements will

often act as effectively exhausting the termination right when parties have

entered into a subsequent agreement concerning a work subject to an

existing copyright grant. “Where parties have renegotiated the terms of an

assignment, and it appears that the result is substantially the same as it

would have been had the author or heir terminated the grant and

renegotiated a new one, a court may find that there has essentially been a de

facto exercise of the statutory agreement.”

232

If the court finds that the

termination right had vested at the time of the renegotiated agreement, and

was thus a material aspect of the new agreement, then it will honor the

renegotiated agreement over the author’s claim of termination.

233

The works-made-for-hire and derivative works exceptions also aid

companies in spite of the termination rights of authors and heirs. If a

creative work is made pursuant to the terms of an employment contract,

then the copyright in that work vests in the employer.

234

This exception lets

companies own any of the work that others may make if the work was made

for the company.

235

The derivative works exception allows companies to

continue to exploit derivative works based on the recaptured copyright and

produced before termination.

236

This lets companies only renegotiate for

the copyrights to the original grant and not have to renegotiate about

successful adaptations of the original work.

Issues regarding termination rights can be very fact specific as to

whether the work was done for hire, or whether there was a renegotiated

agreement. Companies fear losing out on a work that has been exploited

successfully for many years and will use all their resources to find a way

around the termination provision. While all copyright transfers are subject

to termination rights, companies should not worry about every copyright

transfer being terminated because the right will only be exercised for

successful works that still have commercial power after thirty-five years.

237

And with agreements signed in 1978 now ready for termination, this

provision is going to become even more important over the next few

years.

238

Termination rights should be easier to achieve for authors and

232

Bales, supra note 38, at 665.

233

Id.; see generally supra notes 113-115 and accompanying text. A renegotiated agreement

was found in the Siegel and Shuster cases. See supra notes 106-107, 109-110 and accompanying text.

234

See supra note 49 and accompanying text.

235

Though this could lead to companies only hiring on a work-for-hire basis and the

independent creation of comic books will become stagnant. Krueger, supra note 38, at 243-44.

236

See 17 U.S.C. §§ 203(b)(1), 304(c)(6)(a) (2011); see also supra note 51 and accompanying

text.

237

Loren, supra note 227, at 1352-53.

238

See Eriq Gardner, How the Legal Fight Over ‘Y.M.C.A.’ Could Change the Music Industry,

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438 FIU Law Review [Vol. 9:405

heirs, because being held up in court and wasting judicial resources on

frequent, fact-specific inquiries is not a viable option for either party. And

with the Ninth Circuit’s holding in Siegel that a renegotiated agreement can

be binding even if material terms have not been dealt with,

239

it is easier for

a company to claim that the termination right is invalid. The moral of the

story is that termination rights are invaluable to an author and his heirs in

renegotiating the terms of the original transfer of copyright, but the author

needs to determine at the beginning whether the work is done for hire, and

then be clear in negotiations about what terms are agreed upon.

PART

IV: THE FUTURE OF COMIC BOOK CHARACTERS: INCREMENTAL

EXPRESSION AND TRADEMARK PROTECTION ISSUES FOR CHARACTERS IN

THE

PUBLIC DOMAIN OR RETURNED TO AUTHORS

A. The Incremental Expression Test Will Let Characters Gradually

Enter the Public Domain so Derivative Works Can Continue to be

Exploited

The incremental expression test will determine what aspects of

characters enter the public domain or return to the original author after

termination, as well as what increments of expression to that character can

continue to be exploited by companies. This test developed from the

derivative works doctrine, where the character in a public domain work

could be exploited, but subsequent works the character appeared in still

under copyright protection could not.

240

The subsequent works would be

considered derivative works and the only protectable elements of it would

be any additional original expression.

241

In other words, the incremental

expression added to the derivative work is still protectable, such as new

character traits, but traits originating from the public domain or terminated

work, though present in the derivative work, are not additional original

expression and are thus not protected by copyright by the company.

THE HOLLYWOOD REP. ESQUIRE (Aug. 17, 2011, 4:16 PM), http://www.hollywoodreporter.com/thr-

esq/how-legal-fight-ymca-could-224469; see also Eriq Gardner, Rock Band Boston Involved in

HE HOLLYWOOD REP. ESQUIRE (Mar. 21, 2013, 9:06 AM),

http://www.hollywoodreporter.com/thr-esq/rock-band-boston-involved-copyright-430177.

239

Larson v. Warner Bros. Entm’t Inc., 504 Fed. App’x. 586, 587-88 (9th Cir. 2012). The court

points out that this is only viable under California law, but this could become dangerous precedent for

all forms of negotiations if other courts begin to agree with this opinion. Id.

240

Foley, supra note 73, at 935; see also Klinger v. Conan Doyle Estate, Ltd., 2013 U.S. Dist.

LEXIS 180493, at *27 (N.D. Ill. Dec. 23, 2013).

241

Joseph P. Liu, The New Public Domain, 2013 U. ILL. L. REV. 1395, 1442-43 (2013). Whether

a work is sufficiently original to warrant derivative copyright protection is another question that should

be asked, but it is easy to assume original expression since the threshold for originality is low for

visually depicted characters. Id.

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2014] Comic Book Characters in the Film Industry 439

“The standard for analyzing fictional characters in derivative works

was developed in litigation over the Amos ‘n’ Andy characters.”

242

Silverman v. CBS Inc.,

243

a playwright sought to use the characters in a

musical because radio scripts from before 1948 featuring the characters

were in the public domain.

244

CBS had properly maintained the copyrights

in the post-1948 radio scripts as well as the television program featuring the

characters.

245

The court held that the playwright could use the characters

since they were sufficiently delineated in the pre-1948 radio scripts, which

were in the public domain.

246

But the playwright was not allowed to use

any further delineation of the characters contained in the post-1948 scripts

and the television programs because those were still protected by

247

The incremental expression test has recently been used to hold

Sherlock Holmes in the public domain even though several stories featuring

the character are still protected by copyright. The characters were first

introduced in 1887 and four novels as well as forty-six out of fifty-six short

stories featuring the characters are in the public domain.

248

The court held

that where an author uses the same characters in a series of work, some of

which are in the public domain, the public is free to copy story elements

from the works.

249

The public may use the story elements from the public

domain works without a license, but may not use the increments of

expression from derivative works still under copyright protection.

250

The

court defined increments of expression to include storylines, dialogue,

characters, and character traits introduced in derivative works.

251

Thus the

characters from the public domain works are free to use, but the additional

original expression (such as Holmes’s retirement and Watson’s second

wife) are still protected by copyright.

252

242

Foley, supra note 73, at 935.

243

870 F.2d 40 (2d Cir. 1989).

244

Id. at 42-43.

245

Id.

246

Id. at 50.

247

Id. A similar analysis was done in an earlier case that found the logo from the film

“Ghostbusters” did not infringe the copyright in the character Fatso from the Casper comics because the

original comics were in the public domain and the character Fatso had not changed “to any appreciable

degree” in derivative works still protected by copyright. Harvey Cartoons Inc. v. Columbia Pictures

Indus. Inc., 645 F. Supp. 1564, 1570 (S.D.N.Y. 1986).

248

Klinger v. Conan Doyle Estate, Ltd., 2013 U.S. Dist. LEXIS 180493, at *2 (N.D. Ill. Dec. 23,

2013).

249

Id. at *20.

250

Id. at *19; see also Pannonia Farms, Inc., v. USA Cable, 2004 U.S. Dist. LEXIS 23015, at * 9

(S.D.N.Y. June 8, 2004).

251

Klinger, 2013 U.S. Dist. LEXIS 180493, at *31.

252

Id. at *31-32.

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440 FIU Law Review [Vol. 9:405

Characters that have gone through changes in different media will

therefore have certain traits, characteristics, and depictions that will still be

protected by copyright even though the characters themselves are either in

the public domain or returned to the original author. In the Superman case

that held Siegel had properly terminated the grant of rights to the character,

the court did not determine the extent to which later iterations of the

character were derived from the original.

253

The incremental expression test

would likely have been done if Siegel wanted to use the character in new

works because his heirs would not have been allowed to use any expression

that DC added to the character over the years.

254

DC would be able to

exploit all the derivative works that featured Superman, but would not be

able to create any new works without permission from Siegel’s heirs. The

incremental expression test can also be used to gradually allow a character

to enter the public domain and freely allow the use of additional expression

added to that character as different depictions of the character lose

255

B. Mark Owners Will Need to Show Secondary Meaning to Limit the

Use of Public Domain and Terminated Characters in New

Expressive Works Made by Another

Supposing that copyright duration is set so that works will soon enter

the public domain and termination rights are easier to use for authors to

retrieve rights to their characters, how can companies continue to exploit a

character once they no longer have the rights to it? Trademark law will still

protect certain uses of that character after it enters the public domain or is

returned to an author. But, trademark law will have to be managed when

used for a character that no longer has copyright protection because unfair

competition and trademark dilution can essentially put a permanent ban on

253

Michael Cieply, Ruling Gives Heirs a Share of Superman Copyright, N.Y. TIMES (Mar. 29,

2008), http://www.nytimes.com/2008/03/29/business/media/29comics.html?_r=0. The court found that

promotional material featuring Superman was not included in the termination, but held that this material

did not give DC the rights to the character because the promotional material merely featured a strong

man and did not have any of the character traits added to Superman from the later comics. Siegel v.

Warner Bros. Entm’t. Inc., 542 F. Supp. 2d. 1098, 1126 (C.D. Cal. 2008).

254

The Siegels had recaptured the rights to his original abilities and origin, but not to many of

the character’s famous traits developed by DC, such as the ability to fly and the villain Lex Luthor.

Kratzer, supra note 114, at 1163-65.

255

The original character can enter the public domain with different traits and depictions

becoming free to use over time as those works with those new traits lose copyright protection. An author

with a terminated character will not be able to use the additional traits or depictions until they enter the

public domain because those traits were not a part of the grant of rights given to the company and

therefore cannot be terminated back to the author. Use of public domain works that include incremental

expression from copyrighted work will be found to infringe. See Warner Bros. Entm’t. Inc. v. X One X

Prods., 644 F.3d 584, 602-03 (8th Cir. 2011).

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2014] Comic Book Characters in the Film Industry 441

marked characters that a company no longer exclusively owns. To

determine whether the use of the character should be banned under

trademark, a court must look at how the character is being used and if the

character has secondary meaning.

Once a fictional character that “has been used expressively and

indicatively” no longer receives protection due to entering the public

domain or termination of a copyright grant, the character’s indicative

functions are doctrinally still subject to protection.

256

“In effect, then, the

fictional character becomes, like any other trademark logo or design,

subject to the common law restrictions that apply to non-character marks.

The owner will clearly want to prevent any unauthorized uses of the

‘fictional character as a mark’ which attempt to take advantage of its

secondary meaning.”

257

This is especially true where the company will

continue to use the character in copyrightable works even after the character

is no longer copyrightable.

258

Disney will likely attempt to extend the

mark-based protection to unauthorized expressive uses of Mickey Mouse

after it enters the public domain because the character is indicative of the

Disney Company worldwide.

259

When a marked character enters the public domain or has its copyright

returned to the author, the character may still retain the goodwill of the

mark’s owner. “When a source has developed goodwill in its goods or

services, perhaps for 50 or more years, the public relies on the mark for

assurance of the same quality, thus supporting economic efficiency.”

260

Taking away the trademark of a character that enters the public domain or

gets its copyright grant terminated “undervalues trademark’s economic and

256

Helfand, supra note 30, at 657.

257

Id; see also Mattel, Inc. v MCA Records, Inc., 296 F.3d 894, 900 (9th Cir. 2002) (explaining

that marks assume a role outside of trademark law and receive First Amendment protection when a mark

transcends its identifying purpose and enters the public discourse to become an integral part of culture);

see also Mattel, Inc. v. Walking Mountain Prods., 353 F.3d 792, 807 (9th Cir. 2003) (applying the

Rogers v. Grimaldi test, which requires courts to construe the Lanham Act “to apply to artistic works

only where the public interest in avoiding consumer confusion outweighs the public interest in free

expression” and “the title explicitly misleads as to the source or the content of the work”).

258

Helfand, supra note 30, at 657.

259

Other characters that are in the public domain but are still being protected because of their

popularity include Sherlock Holmes and Zorro. Eriq Gardner, Book Editor vs. Doyle Estate: Is Sherlock

Holmes Still in Copyright?, T

HE HOLLYWOOD REP. ESQUIRE (Feb. 15, 2013, 3:24 PM),

http://www.hollywoodreporter.com/thr-esq/book-editor-doyle-estate-is-421918; Eriq Gardner, ‘Zorro’

Rights Challenged as Invalid and Fraudulent, T

HE HOLLYWOOD REP. ESQUIRE (Mar. 14, 2013, 9:59

AM), http://www.hollywoodreporter.com/thr-esq/zorro-rights-challenged-as-invalid-428561. The

difference between these characters and Mickey Mouse is that these characters are not associated with

one company as Mickey is. Parts of Sherlock Holmes are still under copyright due to the incremental

expression test. See supra Section IV.A.

260

Helfand, supra note 30, at 664.

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442 FIU Law Review [Vol. 9:405

public policy rationales.”

261

for the public to use in new expressive works, but there is no good reason to

take away the trademark if the owner is still using it because another

company should not be able to use the marked character as a mark of its

own.

262

Courts should recognize that a character can seek protection under

commerce and as a unit of expression.

263

Courts must therefore carefully

evaluate the particular facts of each case to review the dual nature of a

character in order to determine how the character is being used.

264

For

trademark, courts should evaluate infringement of a character in terms of its

approach to non-character marks through a likelihood of confusion and

secondary meaning analysis.

265

For copyright, a court’s evaluation must

focus on what extent an alleged infringer has taken similar or identical

expression comprising the character without taking into account how

famous the character is or how well it is developed.

266

The Supreme Court

held in Dastar that others can copy public domain work without

identification from its creative source and that trademark protection for a

work in the public domain refers to the producer of the work.

267

Thus

someone can use a public domain character as his or her own without

engaging in trademark infringement.

268

By combining the exclusive rights given to copyright protection and

trademark’s term of protection for marks indicating source, “a character

owner can prevent unauthorized uses of a character in perpetuity.”

269

Convergence of these causes of actions has two results: (1) character

owners will control and profit from character uses not granted exclusively

to them; and (2) a character’s public domain status will become irrelevant if

that character is unavailable to others for the creation of new expressive

works.

270

Utilizing trademark and unfair competition laws for a work no

longer afforded copyright protection may well restrain expressive or

261

Id.

262

See id.

263

Id. at 662.

264

Id.

265

The analysis should be on whether there is confusion as to the source of the product that is

making use of the character (whether it be a new work of fiction or on commercial merchandise). Thus,

consumers must associate the character with a single source. Foley, supra note 73, at 942-44, 959.

266

Helfand, supra note 30, at 662; see generally Foley, supra note 73.

267

Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23, 33-37 (2003).

268

This should be true even if there is some consumer confusion because the character has such

a strong secondary meaning with a mark owner. See infra notes 294-99 and accompanying text.

269

Helfand, supra note 30, at 654.

270

Id. at 662.

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ornamental uses that would otherwise be permitted through copyright

law.

271

This would lock up the entire market for a particular character;

including any new characters that the mark owner thinks is too similar.

272

Problems with mixing copyright and trademark law for characters are

compounded when the character is granted trademark protection without a

showing that the character is indicative of source because of unfair

competition.

273

The impact of trademark law on a mark owner’s

reputational interest has lessened because changes in trademark dilution law

now protect parody and fair use more than it did before.

274

Marvel and DC can also trademark logos and related indicia of

characters if they have been used during the copyright term as indicators of

source or origin. Like Superman’s “S”, Batman’s bat symbol, or Spider-

Man’s spider symbol, these character indicia become associated with the

goods and services in which they appear.

275

Use of these indicia as a part of

the expression of the character should be allowed because it is not being

used as an indicator of source, but rather as a part of the character’s

customary trait.

276

Companies will therefore be allowed to protect

characters and their indicia as marks for uses that serve identifying

functions, and then only where the company is able to prove secondary

meaning for the mark and that a likelihood of confusion exists from an

alleged infringement.

277

Allowing trademark protection against expressive uses of characters

should be based on the commercial value of the characters derived from the

plaintiff’s efforts, whether the defendant is seeking the exclusive use of the

character in a new work, and how close the fit between the alleged

271

Id. at 641 n.101. See Boston Prof’l Hockey Ass’n v. Dallas Cap & Emblem Mfg., 510 F.2d

1004 (5th Cir. 1975) (hockey team motifs were trademarked, not copyrighted, but company that sold

expressive emblems with the team motifs on them unattached to any other good or service was held

liable for trademark infringement); see also Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema,

Ltd., 604 F.2d 200 (2d. Cir. 1979) (porn producer was liable for trademark infringement for costumes

that were identical to cheerleader outfit because it could hurt mark owner’s reputational interest). These

cases show that unauthorized expressive uses of a mark can be considered infringement and are relevant

for character marks that indicate source because even though the character has no copyright protection,

it can still be blocked from expressive use by others through trademark law.

272

Helfand, supra note 30, at 641 n.101.

273

Id.; see also Universal City Studios, Inc. v. Nintendo Co., 746 F.2d 112 (2d Cir. 1984)

(image of King Kong is recognizable, but does not identify a single authorizing source, so new uses of

the image do not implicate the reputation of the character owner).

274

Dallas Cowboys, 604 F.2d 200, would probably be decided differently today as a form of

satire or parody under § 43(c) of the Lanham Act (15 U.S.C. § 1125(c)). This is a benefit for marked

characters that survive after entering the public domain because it puts a limit on a possible indefinite

275

Helfand, supra note 30, 665 n.232.

276

Id.

277

See infra note 283 and accompanying text.

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444 FIU Law Review [Vol. 9:405

infringing act and past uses of the character mark by the plaintiff is.

278

Courts should presume that the use of a character is merely decoration if it

appears on the product itself rather than the label, tag, or packaging because

consumers buy the product because of the character rather than the source

of the character.

279

If the consumer does not buy the product because of its

source and buys it merely because of recognition of the character, then the

character is not an indicator of source.

280

If the character’s status is merely

a decoration, then copyright law will be used.

281

If the decoration of the

character has come to represent that the article comes from a certain source,

then trademark analysis will need to be used as well as copyright law.

282

the product is a noncommercial use, such as a film or song, then the use of

the character is not trademark-related.

283

Two sources of confusion exist for characters that have gone into the

public domain or are no longer owned by a company due to the author’s use

of termination rights: (1) that the public will continue to associate any

works containing the character with the previous owner; and (2) that the

continued use of the character trademark in expressive or derivative works

will reinforce the consumer’s association of the character mark with the

mark owner.

284

Unless the plaintiff proves secondary meaning and

278

See Helfand supra note 30, at 667-68. For the first factor, expressive uses of the mark should

not solely rely on the character’s popularity. Owning a trademark in a character does not prevent

unauthorized uses of that trademark to be used by another for communicating ideas or expressing points

of view. See Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894, 900-01 (9th Cir. 2002). Expressive uses

that use the commercial value of the character to gain attention rather than make a comment should not

be allowed. See id. For the second factor, the expressive use of a character mark should be available for

all. The use of a character mark for attention-seeking rather than creative expression can be shown if the

defendant is trying to block others from using the mark in their works. For the third factor, an

expressive use of a mark should be ornamental in nature and not try to signify source. There is a higher

likelihood of confusion if the expressive use is similar to a logo because the fit between the uses of the

character is the same between the works of the mark owner and new expressive works.

279

Helfand, supra note 30, at 668.

280

See id.

281

See id. at 667; see also Fleischer Studios v. A.V.E.L.A., Inc., 636 F.3d 1115, 1123-24 (9th

Cir. 2011), withdrawn by Fleischer Studios, Inc., v. A.V.E.L.A., Inc., 654 F.3d 958 (9th Cir. 2011).

282

Helfand, supra note 30, at 667. A character’s name that is in the public domain can also be

used in new works. Id. at 669. The main concern in using a name in other works is whether there will

be confusion as to source, and this requires an examination of defendant’s marketing strategies because

a use of a name alone does not indicate confusion. Id. For example, Snow White is a character name in

the public domain but is highly associated with Disney. But even though the character has a secondary

meaning with Disney, a different interpretation of the character will not lead to confusing that character

with Disney. The character has been used outside Disney by other studios and has also been in the title

(“Snow White and The Huntsman”), but this does not cause confusion as to source because Universal

did not try to confuse consumers that the movie was being made by Disney. Universal was the creator

of that film, not Disney.

283

Courts have interpreted the term “noncommercial” to include communicative uses. See

Mattel, Inc. v. MCA Records Inc., 296 F.3d 894, 905-06 (9th Cir. 2002).

284

Helfand, supra note 30, at 669.

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likelihood of confusion, others should not be prevented from using the

character because a character that acts only as a weak mark does not cause

an association in the mind of the consumer between the character and the

company.

285

One measure to prevent confusion for uses of the character

previously owned by another is to have a disclaimer that states the new

work is not authorized or sponsored by the original author, previous

286

Thus a character in the

public domain or one returned to the author can be used in new expressive

works while having a lesser likelihood of confusion.

287

A few rare situations will occur with some characters where the

character is synonymous with its source and any further expressive uses of

the character will be prohibited. This absolute association between

character and owner will arise where: (1) a single source uses the character

both in expressive works and for trademark purposes during most, if not all,

of its copyright term; (2) such use continues after the character enters the

public domain; (3) the owner reviews any licensing quality; and (4) the

owner polices the mark.

288

Clear examples of this phenomenon include

Walt Disney’s Mickey Mouse, Charles Schultz’s Peanuts gang,

289

Star Wars

characters,

290

Dr. Seuss characters, and prominent comic book characters

including Batman, Superman, and Spider-Man.

291

Companies could argue that expressive uses of these characters in the

public domain should be limited “because the mere presence of them is

enough, even for ornamental uses sporting disclaimer language, to evoke an

association” in the consumer’s mind to the mark owner.

292

The argument

285

See id. at 669-70; Foley, supra note 73, at 942-44, 959.

286

Helfand, supra note 30, at 670; see also Liu, supra note 241, at 1433. Examples of this can

be found on fan films or parodies done on YouTube.

287

However, if the character is used solely to designate origin or source, then the fact that the

character is in the public domain and has a disclaimer is irrelevant. Helfand, supra note 30, at 671 n.258.

If it is an author who now has full copyright to the character but the previous owner uses the character as

a trademark, then a licensing agreement will have to be put into place or else the character is useless to

both parties. See Krueger, supra note 38, at 247-48; see also Bouchat v. Baltimore Ravens, Inc., 241

F.3d 350 (4th Cir. 2000) (involved infringement of a copyrighted image, but that image was also used as

a trademark by the infringer). One defense for an incidental use of a logo or character that is both

copyrighted and trademark is fair use. Eriq Gardner, Appeals Court Won’t Penalize NFL Network for

Use of Artist’s Logo, T

HE HOLLYWOOD REP. ESQUIRE (Dec. 17, 2013, 2:57 PM),

http://www.hollywoodreporter.com/thr-esq/appeals-court-wont-penalize-nfl-666373.

288

Helfand, supra note 30, at 671.

289

Id.

290

See Ideal Toy Corp. v. Kenner Prods. Div. of Gen. Mills Fun Grp., Inc., 443 F.Supp. 291,

301 (S.D.N.Y. 1977).

291

Helfand, supra note 30, at 671 n.261.

292

Id. at 671-72; see also Liu, supra note 241, at 1429-30. The prototypical features of the

character can still be duplicated because the character is no longer protected by the substantial similarity

test and limits on trademark dilution allow noncommercial uses.

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446 FIU Law Review [Vol. 9:405

would say there will be a loss to consumers because with different

variations of the characters from different users, there will be a lack of a

coherent vision of the character.

293

If this argument prevails, any rare

limitation on expressive uses of characters can be lost after the characters

start becoming associated with more than a single source

294

because

consumers who want a singular vision of a character can access the

authorized version of the character by looking for the company’s

trademark.

295

Even where some consumer confusion might be possible for iconic

works, trademark law should not be interpreted so broadly “as to limit the

use of items that other areas of federal law have expressly placed into the

public domain.”

296

The Supreme Court has already held that consumer

confusion under trademark law cannot undercut the purpose of patent law.

In Kellogg Co. v National Biscuit Company,

297

the National Biscuit

Company had the exclusive use of a shredded wheat cereal under a patent,

but when the patent expired Kellogg began making the cereal under the

term “shredded wheat.”

298

The Court recognized that consumers might in

fact associate the term “shredded wheat” with National Biscuit due to the

company’s long period of exclusive use,

299

but held that competitors had the

right to sell shredded wheat after the patent expired as well as accurately

label the product as shredded wheat.

300

“There is no reason in principle

why the same understanding should not be applied to copyright law” and

the Court’s decision in Dastar shows that the Court is serious about not

letting trademark law limit the public domain.

301

293

See Liu, supra note 241, at 1422-23.

294

Id. at 1436.

295

See id. at 1424. Another theory for products that are so well connected with a certain

company is to ask Congress to provide extended protection for certain works based on this mass

consumer association between the work and the company. An argument for getting around the perpetual

thus giving extended protection to certain works only if it is worth it to the company or heirs. See Eriq

Gardner, U.S. Congressmen Told About ‘Next Great Copyright Act’ at Hearing, T

HE HOLLYWOOD REP.

ESQUIRE (Mar. 20, 2013, 3:51 PM). It is unknown whether something like this will ever be brought up

by lobby groups or Congress because a renewal of rights goes against the terms of the Berne

Convention.

296

Liu, supra note 241, at 1431.

297

305 U.S. 111 (1938).

298

Id. at 113-14.

299

See id. at 121.

300

Id. at 119.

301

Liu, supra note 241, at 1431. A company would still be able to retain rights against classic

trademark uses, such as if a competitor uses the character on a logo. See id. at 1433.

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ONCLUSION

Regardless of issues over copyright duration and termination rights,

movie studios will continue to exploit comic book characters in film.

Disney and Marvel are getting ready for a new slate of comic book films, as

well as other studios with Marvel’s licensed characters,

302

and WB and DC

are looking ahead at a “Justice League” movie that will create a shared

universe.

303

Other movies based on comic book characters are being made

that are not based on the major characters from Marvel and DC,

304

but it is

likely that these films will make only a fraction of what the films with the

popular characters will make.

305

Because most of these popular characters

are blocked from the market and this limitation comes from vertical

agreements between comic book publishers and media companies,

public domain and authors.

It is expected that companies will lose millions in revenue from losing

302

Ben Pearson, Mark Millar Now Consulting on All Marvel Films at 20th Century Fox, FIRST

SHOWING (Sept. 27, 2012), http://www.firstshowing.net/2012/mark-millar-now-consutling-on-all-

marvel-films-at-20th-century-fox/. “The Amazing Spider-Man” is being planned as a quadrilogy with

more films in development. Peter Sciretta, ‘The Amazing Spider-Man 3 and 4’ Announced, S

LASH FILM

(June 17, 2013), http://www.slashfilm.com/the-amazing-spider-man-3-and-4-announced/. Additionally,

several films are in development for the “X-Men” franchise. David Bentley, Ten Future X-Men Films

Lined up by 20th Century Fox, with X-Force and Cable Among Possibilities, T

HE GEEK FILES (Nov. 13,

2012, 12:04 AM), http://blogs.coventrytelegraph.net/thegeekfiles/2012/11/ten-future-x-men-films-lined-

up-by-20th-century-fox-with-x-force-and-cable-among-possibilities.html; Graeme McMillan, Bryan

Singer: ‘X-Men: Apocalypse’ More of a ‘First Class’ Follow-Up, T

HE HOLLYWOOD REP. HEAT VISION

(Jan. 31, 2014, 11:28 AM), http://www.hollywoodreporter.com/heat-vision/bryan-singer-x-men-

apocalypse-676138.

303

Rick Marshall, Warner Bros. Planning Nine DC Comics Movies After Man of Steel Sequel

and Justice League, D

IGITAL TRENDS (Apr. 29, 2014), http://www.digitaltrends.com/gaming/warner-

bros-planning-nine-dc-comics-movies-man-steel-sequel-justice-league/#!Kncvc. It is interesting to note

that these shared universes of comic book characters would likely not be available unless one movie

studio owned the rights to all these characters, which is the current issue under this regime, or movie

studios with several different licensing agreements somehow agreed to merge the characters together for

a movie. This article does not seek to say whether the shared film universes being created by the film

studios are a bad thing (considering that this is how the comic industry has been for the past century).

This article merely uses the film industry as an example of how characters can be blocked from the rest

of the market.

304

For example, “Red 2”, “R.I.P.D.”, and “2 Guns” are all films with ties to comic publishers

besides Marvel and DC. “Kick-Ass 2” is based on the comic published by Marvel, but under its Icon

imprint that allows authors to own all the rights in the comic. Kick-Ass (comics), W

IKIPEDIA,

http://en.wikipedia.org/wiki/Kick-Ass_%28comics%29 (last visited Jan. 1, 2014).

305

But consider that the first “Kick-Ass” film, which was good enough to earn a sequel, only

made about $48 million domestically. Kick-Ass, B

OX OFFICE MOJO,

http://www.boxofficemojo.com/movies/?id=kickass.htm (last visited Mar. 8, 2014). While “The

Avengers” made about $623 million domestically. Marvel’s The Avengers, B

OX OFFICE MOJO,

http://www.boxofficemojo.com/movies/?id=avengers11.htm (last visited Mar. 8, 2014). “The Dark

Knight Rises” made about $448 million domestically. The Dark Knight Rises, B

OX OFFICE MOJO,

http://www.boxofficemojo.com/movies/?id=batman3.htm (last visited Mar. 8, 2014).

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448 FIU Law Review [Vol. 9:405

the exclusive right to use certain characters, but this loss is justified because

companies earn that revenue by using copyright law to restrict free

dissemination and prevent competition.

306

Comic book characters continue

to be exploited for nearly one hundred years before entering the public

domain and the characters should be available to others for expressive uses.

This can be accomplished by the character entering the public domain or

terminating to the original author so the author can make new uses of the

character. Companies can continue to exploit characters and protect them

through trademark law if the character is a mark, but courts must take care

to not rule against uses of the character that are purely expressive. Using

the character in artwork or new stories that do not involve confusion as to

the source of the character should not be held as an infringement.

307

Termination cases will likely increase in number and complexity in

this era for new works termination,

308

so authors and companies should

prepare to discuss ownership and termination from the very beginning.

Authors and companies should be able to work together to exploit the full

potential of characters because otherwise there will be drawn out legal

battles and companies will lobby to reduce or eliminate termination

rights.

309

Companies can protect their interests in a character by deeming

the work to be made for hire in the agreement.

310

Companies can also

continue to exploit the derivative works the character was used in during

the term of the grant even after an author exercises his termination rights.

Disputes over ownership of comic book characters will likely die

down because most work done for the major comic book publishers are

now all done on a work made for hire basis. But because these characters

are so popular and valuable, any argument over the ownership of some of

these characters can potentially deal with millions of dollars. The heirs of

Jack Kirby are appealing their case to the Supreme Court and claim that the

“instance and expense test” is overbroad.

311

The suit against Disney by

306

Liu, supra note 241, at 1422. This is a private loss to the companies, but not a net social loss

as “the public will reap substantial benefits from the public domain status of these works and their

subsequent wide dissemination.” Id.

307

See supra note 285 and accompanying text.

308

Valenzi, supra note 97, at 254.

309

Intellectual property provisions were leaked from the negotiations for the Trans-Pacific

Partnership Agreement that show attempts to undermine termination rights. Parker Higgins & Sarah

Jeong, The TPP’s Attack on Artist’s Termination Rights, E

LEC. FRONTIER FOUND. (Dec. 16, 2013),

https://www.eff.org/deeplinks/2013/12/tpps-attack-artists-termination-rights#.

310

Or by following the principles of general common law of agency for a court to hold a work

was made by an employee or independent contractor. See supra note 101 and accompanying text.

311

Kevin Melrose, Supreme Court to Decide Next Week Whether to Hear Kirby case, COMIC

BOOK RES. ROBOT 6 (May 6, 2014, 7:00 AM), http://robot6.comicbookresources.com/2014/05/supreme-

court-to-decide-next-week-whether-to-hear-kirby-case/.

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Stan Lee Media was eventually dismissed with prejudice,

312

but the issue of

who owns the rights to several prominent Marvel characters was brought up

again by a theater company that was using Spider-Man in a musical

revue.

313

The theater company claimed that Marvel did not own Spider-Man

and that the character rightfully belonged to Stan Lee Media, which

licensed the rights of the character to the theater company.

314

Stan Lee

Media later filed papers asking for a declaratory judgment that it owned the

rights to Spider-Man.

315

With millions of dollars at stake and the potential

for billions of dollars in future profits, Disney will likely battle it out with

full force until a final decision is made regarding the true ownership of

these prominent comic book characters.

312

Dominic Patten, Disney Wins Dismissal of Marvel Copyright Lawsuit with Stan Lee Media,

EADLINE HOLLYWOOD (Sept. 5, 2013, 5:30 PM), http://www.deadline.com/2013/09/disney-wins-

dismissal-of-marvel-heroes-copyright-lawsuit-with-stan-lee-media/.

313

Kevin Melrose, Theaters Claims it Licensed Spider-Man from Stan Lee Media, COMIC BOOK

RES. ROBOT 6 (Nov. 6, 2013, 8:00 AM), http://robot6.comicbookresources.com/2013/11/theater-claims-

it-licensed-spider-man-from-stan-lee-media/.

314

Id.

315

Kevin Melrose, Stan Lee Media Takes Another Stab at Marvel Character Rights, COMIC

BOOK RES. ROBOT 6 (Dec. 5, 2013, 8:00 AM), http://robot6.comicbookresources.com/2013/12/stan-lee-

media-takes-another-stab-at-marvel-character-rights/. Stan Lee Media has also filed an intervenor

complaint seeking to assert its rights to Spider-Man. David McAfee, Stan Lee Media Sues Disney Unit

in Spider-Man License Row, L

AW 360 (Feb. 7, 2014, 8:24 PM),

http://www.law360.com/articles/508343/stan-lee-media-sues-disney-unit-in-spider-man-license-row.

Disney wants the judge to send a message that this will be the final time Stan Lee Media attempts to

assert rights to Marvel characters. Eriq Gardner, Disney Demands End to Stan Lee Media’s Claim to

Own Spider-Man, T

HE HOLLYWOOD REP. ESQUIRE (Feb. 18, 2014, 3:07 PM),

http://www.hollywoodreporter.com/thr-esq/disney-demands-end-stan-lee-681237.