Effective Copyright Work-for-Hire Agreements and Renewal Rights: Is There Anything Superheroes Can’t Teach Us?

The recent reinstatement of a copyright suit by the creator of the Ghost Rider comic book series against publisher, Marvel, highlights the importance of effective work-for-hire agreements. As several prior cases have shown (e.g., the saga of the Superman copyright and Marvel versus Jack Kirby, creator or co-creator of X-Men, Iron Man, and the Hulk, among others), the comic book industry has not always documented well its intellectual property rights. Given the money involved with the current comic book hero renaissance at the multiplex, if those rights are in any way arguable, litigation is bound to ensue.

The Ghost Rider case is highly instructive of properly securing work-for-hire and renewal rights. Ghost Rider was conceived by Gary Friedrich, a freelance comic book writer. Friedrich assigned his rights to the characters and the origin story to Marvel and, thereafter, created Ghost Rider comics on a work-for-hire basis from 1973 to 1978. He did not initially have a written contract, but the copyright law changed in 1976 to require work-for-hire agreements for certain types of works to be in writing. Marvel, therefore, had all of its freelancers enter into a form contract.

The contract was clear that it covered works going forward, but less so for works already created. It was also vague concerning “renewal rights.” Renewal rights are a little-known, but author-friendly aspect of copyrights. After the initial term of 28 years, if the author provides proper notice, he is entitled to a renewal term of 67 years, free-and-clear of any rights, interests or licenses previously granted to others. The principle behind renewal rights is that upon creation, an author may not appreciate the potential long-term value of the copyright and may sell it for a pittance (e.g. Superman’s creators famously sold their rights for $130). After the initial term, the value of the work presumably has been “tested,” and the author can renegotiate more favorable terms to license, or can exploit the copyright on his own.

This is why work-for-hire agreements are so crucial. The employer, not the employee-creator, is legally the “author” of any work-for-hire. This means that the company holds all renewal rights and can avoid a potentially costly showdown with an employee (or former employee) by ensuring that work-for-hire agreements clearly and unambiguously vest authorship in the company from the beginning. Alternatively, renewal rights can also be assigned during the initial term. This is important if the company neglected to obtain a work-for-hire agreement at the beginning of the relationship or is otherwise concerned over ownership rights.

In the Ghost Rider case, both the work-for-hire aspect of the agreement and assignment of renewal rights were not sufficiently definite to entitle Marvel to summary judgment. Therefore, the case is going back to the trial court to determine what the parties intended, which is never a position a company fighting the perceived little guy wants to be in. Regardless of the outcome of trial, the biggest winners may be the movie-going public if it means no more Nicolas Cage Ghost Rider sequels.

Byron McMasters is a lawyer with the Providence-based law firm of Duffy & Sweeney. He can be reached at bmcmasters@duffysweeney.com.

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