Marvel Characters Inc. v. Kirby, Second Circuit, Docket No. 11-3333-cv (Aug. 8, 2013).

This is an appeal from the judgment of the U.S. Dist. Ct. for the Southern District of New York granting summary judgment in favor of Marvel, et al. My analysis of the SDNY’s decision is here.

The Second Circuit affirmed (in part) the SDNY’s decision, and determined that, among other things, the SDNY correctly determined that the works at issue were, “made for hire,” under Section 304(c), and that Marvel was therefore entitled to summary judgment. The Kirby heirs cannot terminate the transfer.

In so doing, the Second Circuit applied the “instance and expense test”.

“Instance”: It was easy for the Second Circuit to determine that Kirby created the work at Marvel’s instance. Kirby’s working relationship with Marvel between the years 1958 and 1963 was, “close and continuous.” Stan Lee considered Jack Kirby to be Marvel’s best artist. Most of Kirby’s work during this period was published by Marvel and for established Marvel titles. Kirby created the relevant works pursuant to Marvel’s assignment or with Marvel specifically in mind. Marvel had the power to reject Kirby’s pages and require him to redo them, or to alter them, a power it exercised from time to time, and Kirby collaborated with Stan Lee on many of the works.

“Expense”: More difficult was the determination that Kirby created the work at Marvel’s expense. Until Marvel purchased Kirby’s pages, Kirby expended time, tools, overhead—and shouldered the risk that Marvel would reject them, leaving him in a lurch. Nevertheless, Marvel’s payment of a flat rate and its contribution of both creative and production value, in light of the parties’ relationship as a whole, was enough to satisfy the “expense” requirement.

What you may have missed: the Second Circuit also determined that the SDNY was without personal jurisdiction over Lisa and Neal Kirby, one-half of the heirs attempting to terminate the transfer. In so doing, the Second Circuit held that the sending of the termination notices to Marvel in New York does not suffice for purposes of New York’s “long arm” statute for personal jurisdiction, which provides, in part, that, “a court may exercise personal jurisdiction over any non-domiciliary . . . who in person or through an agent . . . transacts any business within the state . . .” N.Y. C.P.L.R. § 302(a)(1). Other states, including California, have broader long-arm statutes that reach as far as “due process” will allow, i.e., they are coextensive with the United States Constitution. Might the mere sending of a termination notice to a recording label in California give California personal jurisdiction over the party sending the notice, even though such party has no other ties to California?

Since the declaratory relief that Marvel obtained in the district court is binding on Barbara and Susan Kirby, but is not binding as to Lisa and Neal Kirby, this means that Lisa and Neal can seek to take back the works at issue in another court, right? No, probably not. Under Section 304(c), “[i]n the case of a grant executed by one or more of the authors of the work, termination of the grant may be effected, . . . if such author is dead, by the person or persons who . . . own and are entitled to exercise a total of more than one-half of that author’s termination interest.” This provision would presumably require three (3) of the four (4) heirs to exercise the author’s termination interest. So, even though only Barbara and Susan are disabled from effective termination by this decision, Lisa and Neal also lose.