amicus curae brief supporting the right of creative artists to own and control their copyrights

Memorandum Of Amici Curiae The Authors Guild, Inc., The American Society of Journalists and Authors, The National Writers Union, Novelists Inc., The Science Fiction and Fantasy Writers Association, The Society of Children's Book Writers and Illustrators and the Text and Academic Authors Association
In Support of Defendant Joseph H. Simon

The Authors Guild, Inc., the American Society of Journalists and Authors, the National Writers Union, Novelists Inc., the Science Fiction and Fantasy Writers Association, the Society of Children's Book Writers and Illustrators and the Text and Academic Authors Association submit this memorandum as amici curiae in support of defendant Joseph H. Simon and in opposition to the motion of plaintiff Marvel Characters, Inc. for summary judgment. Accompanying this memorandum is a motion seeking leave to file this memorandum.

INTERESTS OF THE AMICI

Amici curiae are seven prominent organizations the represent the interests of authors and illustrators.

The Authors Guild, Inc. is a national association of more than 8,000 professional, published book and periodical writers of all genres, including novelists, children's book authors and illustrators, journalists, historians, biographers and other writers of fiction and nonfiction. Founded in 1912, it is the oldest and largest organization of published writers in the United States. Among the Authors Guild's principal purposes are to express its members' views in cases involving the interpretation of the Copyright Act and to protect the invaluable rights of authors provided by the Act.

The Guild works to promote the professional interests of authors in various areas, primarily copyright, publishing contracts and freedom of expression. In the area of copyright, the Guild has fought to procure satisfactory domestic and international copyright protection and to secure fair payment of royalties, license fees and non-monetary compensation for authors' work. In the area of promoting fairness in publishing contracts, the Guild's activity has been extensive. Since as early as 1947, the Guild has published a Recommended Trade Book Contract and Guide. This model contract, well known throughout the publishing industry, is intended to be used by authors as an aid in negotiating their publishers' standard form contracts.

Since the early 1990s the Guild has employed a staff of attorneys to assist hundreds of members annually to negotiate and enforce their publishing contracts. In the past five years, the Guild's Contract Services Department has addressed more than 5,000 separate matters for Guild members, most of them related to licenses of authors' copyrights and publishing industry law and business.

The American Society of Journalists and Authors ("ASJA"), founded in 1948, is the nation's leading organization of independent nonfiction writers with a membership of more than 1,000 outstanding freelance writers of magazine articles, trade books, and other forms of nonfiction writing.

The ASJA was founded to advance professional development by providing members with regular confidential market information, a network of editors and field professionals, an exclusive referral service, seminars and workshops and the opportunity to explore professional issues and concerns with colleagues.

Since its institution the ASJA has become a primary voice in efforts to protect freelancers' interests by serving as spokesman for the right to control and profit from all uses of their work. The ASJA establishes professional and ethical standards for freelancers while recognizing and encouraging the pursuit of excellence in nonfiction writing.

The National Writers Union represents more than 7,000 writers in many genres of copyrighted works, including poets, book authors and journalists. Since its founding in 1981, the NWU has spearheaded legislative, legal and contract campaigns to protect copyright and authors' contractual rights.

Novelists Inc., has an international membership of over 600 authors from all genres of popular fiction. Novelists Inc. is dedicated to serving the needs of multi-published writers of popular fiction. Novelists Inc. has conducted publisher audits and maintains editor and agent databases to foster the protection of authors' rights and interests.

Novelists Inc. provides current industry news through its monthly newsletter and its website, which posts position papers on writers' issues and offers other research sources. Novelists Inc. creates a network for its members by sponsoring an annual conference attended by editors, agents and other publishing professionals and by operating a networking e-mail loop. In varied ways, it supports the rights of authors to pursue their craft with creative freedom and professional dignity.

The Science Fiction and Fantasy Writers of America, Inc. ("SFWA"), founded in 1965, numbers more than 1200 members who create works in the genres of science fiction and fantasy for all media.

From its inception SFWA has educated its members about contracts, copyright law, fraudulent practices, electronic piracy and other matters of critical interest to the professional writer. SFWA supports the efforts of writers and has joined with other organizations to seek judicial and legislative solutions for issues of enduring consequence to the structure of the writing industry.

SFWA is concerned that if publishers are able to exert over-reaching interpretations of law to deprive authors of what are purported to be inalienable rights under the Copyright Act, then other publishers will follow suit and deprive authors of the financial benefit their successful works have earned.

The Society of Children's Book Writers and Illustrators is an international organization headquartered in the United States. The Society counts approximately 9,000 members whose creative work for children -books, illustrations, articles, poems, stories, films, programs, electronic media and photographs - has been published or produced, and an additional 7,000 members who are otherwise involved in the creation of children's literature. It serves as a consolidated voice for professional writers and illustrators across the world. As a unified body, the Society acts as a powerful force to effect important changes within the field of children's literature. In recent years, it has successfully lobbied for such issues as new copyright legislation, more equitable treatment of authors and artists, and fairer contract terms. The Society serves an advisory function for all of its members, and its Bulletin is a bimonthly publication containing comprehensive and current information in the field of children's literature. Features of the Bulletin include the latest market reports and articles related to writing, illustrating and publishing issues.

Society events and activities for members are held in locations all over the United States and internationally. Meetings and workshops feature well?known writers, illustrators, and others involved in literature for young people; critique groups, shop?talk groups. In addition, Society newsletters containing regional information of interest to writers and illustrators and social events enable its members to share their experiences in creating and publishing.

The Text and Academic Authors Association ("TAA"), founded in 1987, is a national not-for-profit organization representing textbook authors and educational writers at all levels including Kindergarten through the collegiate level. TAA members write for a variety of educational audiences, producing scholarly journal articles, professional books, monographs, textbooks, CD-ROMs and other forms of instructional material.

TAA is concerned with fair contracts for educational authors, the protection of copyright, and just compensation for the publication and distribution of intellectual property and is committed to the principle that educational instructional materials have genuine authorship.

TAA seeks to protect the rights of the creators of intellectual property at all levels and has assisted scores of authors with contract issues and royalty concerns. The legal and enforceable rights of authors is the common area of assistance for TAA, which counsels members on their rights in regard to the production and distribution practices of publishers.

Amici shall be hereinafter referred to collectively as "The Authors Groups."

The Authors Groups view the Court's decision on this motion as bearing significantly on the ability of professional authors and artists, of whom many thousands are members of the Authors Groups, to carry on their business of creating valuable literary and artistic works for a living. As authors of literary works of every genre, members of the Authors Groups are intimately concerned with the dissemination of knowledge, entertainment and the sharing of ideas. As creators of intellectual property, our members believe this goal is best achieved by preserving -- to a limited degree -- authors' control over the exploitation of their creative work product. The Authors Groups' members spend countless hours integrating their knowledge and creativity into books, periodicals, and artistic creations. Their livelihoods as creators depend substantially, if not solely, on receiving compensation for the commercial exploitation of their work.

Preliminary Statement

In this case of first impression, Marvel Characters, Inc. (hereinafter, "Marvel") seeks to retain for the remaining 39 years of its 95-year term the enormously lucrative copyright to the Captain America properties (hereinafter, "Captain America") that its predecessor acquired from Joseph H. Simon (hereinafter, "Simon"), the creator. It seeks to do so despite Congress's unequivocal directive that authors be allowed to terminate a grant of copyright after many years no matter what they might earlier have agreed to sign away.

For decades, authors and illustrators -- many of whom negotiate their contracts without the benefit of agents - have agreed to one-sided copyright grants that publishers, with far greater bargaining power and legal resources, have designed to be as expansive as possible in exchange for as little payment as possible. While this system represents nothing worse than capitalism at work, the results were often unfair to the point of unconscionability, as when a work proved economically successful for many years, but the economic success flowed only to the grantee and not to the author. As long ago as 1909, Congress recognized this unfairness and sought to rectify it by making a second 28-year term of copyright available only to the original author.

In response to a 1943 Supreme Court ruling that undermined this intent, Congress decided in its extensive revision of the 1909 Act decisively to save the authors from inequitable contracts and from the worst injustices of the previous system. The Copyright Act of 1976 thus decrees that "notwithstanding any agreement to the contrary," authors have the right to terminate grants of copyright after a significant number of years have passed during which the grantees, as has Marvel in this case, have enjoyed fully the fruits of their licenses. Congress did not take the benefit of the grantees' bargains from them with this legislation. The new statute also ensures that rights to derivative works created under the grant will be unaffected by termination of the grant. Significantly, this new right of termination became law eight years after the 1969 Settlement Agreement at issue in this case was executed.

With its motion, Marvel seeks to convince this Court to thwart Congress's intent yet again, this time by ruling without a trial that pursuant to an "agreement to the contrary," Simon is not the "author" of Captain America at all, but rather was an employee-for-hire of Timely Comics, Inc., the fact issue that will determine the outcome of the case, and one that is clearly in dispute. Should Marvel succeed, it will have found a way for all publishers to avoid, through the artful drafting of an "agreement to the contrary," the termination right under the Copyright Act.

At stake in this case are fundamental provisions of the Act: interpretation of statutory language that carefully and explicitly defines the rights and circumstances under which authors and their publishers do business and that clearly spells out the limitations of grants of copyright. Should Marvel prevail without a trial on the key issue of whether or not Simon was an employee-for-hire, then publishers will predictably seize every opportunity to avoid Section 304(c)5 by contract, just as they proceeded to do after the 1943 Supreme Court decision on the renewal term - something Congress deliberately set out to prevent.

Also at stake are fundamental values of copyright and the vibrant future of the publishing industry. The termination right, which Congress intended authors to retain no matter how economically disadvantaged they are in earlier negotiations, is of crucial value to authors. Should Marvel win its motion, it will 1) prevent authors from realizing this value; and 2) hinder the underlying Congressional intent and Constitutional purpose of the Copyright Act - to ensure that incentives to create flow appropriately to the creators of intellectual property.

Congress was as clear as it could be that the termination right may not be waived by agreement. Authors should be able to rely upon the limited protections afforded them in the Copyright Act. In defense of these basic copyright principles, the Authors Groups have for the first time joined as amici in an action.

Argument

The Inalienable Right of Termination under the Copyright Act Precludes
Summary Judgment for Marvel Posited on the 1969 Settlement Agreement

Section 304(c) of the Copyright Act allows authors of pre-1978 works or their statutory heirs to terminate any grant of copyright and recapture the rights after 56 years. (17 U.S.C. §304(c)). This right may not be contracted away by the author or his heirs. 17 U.S.C. §304(c)5 (termination right exists "notwithstanding any agreement to the contrary").

To be sure, this right of termination is a stark exception to the rights of copyright owners freely to license any or all of their exclusive rights. 17 U.S.C. §106. Congress made this unusual exception in order to redress a long history of financial inequity frequently experienced by original authors (and, of course, their families) who had no way of knowing the true value of their work and little bargaining power in their initial dealings with publishers. Mills Music, Inc. v. Snyder, 469 U.S. 153, 172 (1985); see also Bartok v. Boosey & Hawkes, Inc ., 523 F.2d 941, 944-45 (2d Cir. 1975)(construing the 1909 Copyright Act).

While members of the Authors Groups write in a wide array of genres, the overwhelming majority is unable to negotiate most of the terms of their publishing contracts. Grueling competition permeates today's publishing market, and publishers are loath to change their standard form contracts beyond the amount advanced, if any. With mergers and acquisitions of publishers decreasing the channels through which authors can sell their material, authors are typically required to make broad grants of publishing rights, purporting to cover vast territories and the entire term of copyright, to their publishers.

Authors have historically had, and continue to have, little choice about making these grants. They supply the talent, time, skill and work to create the product; they usually cannot self-publish and self-distribute. Consequently, most authors seek out publishers willing to manufacture and distribute their work. The publishers acquire the valuable copyrights to the works from the authors, but unlike distributors of manufacturers' products, they typically do not at the outset pay authors the fair market value of the intellectual property. In some cases, payment takes the form of a portion of proceeds from sales of copies or licenses for derivative works, because the fair market value of intellectual property is by its very nature elusive. See 2 M. Nimmer, The Law of Copyright, § 113, at 462 (1974 ed.)).

Early in the 20th century, Congress recognized the potential for such inequities and sought in the Copyright Act of 1909 to level the playing field by giving the 28-year renewal term of copyright to the original authors:

It not infrequently happens that the author sells his copyright outright to a publisher for a comparatively small sum. If the work proves to be a great success and lives beyond the term of 28 years, your committee felt that it should be the exclusive right of the author to take the renewal term, and the law should be framed as is the existing law, so that he could not be deprived of that right.

Bartok v. Boosey & Hawkes, Inc ., 523 F.2d 941 at 944 (quoting H.R. Rep. No. 2222, 60th Cong. 2d Sess. 14 (1909)).

In Fisher Music Co. v. M. Witmark & Sons, 318 U.S. 643 (1943), however, the Supreme Court thwarted that intention in holding that authors could assign the renewal term before it came into existence. 318 U.S. at 657. Thereafter, predictably, publishers promptly began to require authors in their initial agreements to grant their copyrights for both 28-year terms. The Fisher Music decision thus effectively made the renewal term of little or no value to authors and their families, the parties whom the renewal right was designed to protect. Bartok v. Boosey & Hawkes, Inc ., 523 F.2d 941 at 944.

Today, in part because Fisher Music interpreted the renewal term in a way that restored the disfavored scenario, the Copyright Act of 1976 is crystal clear regarding the scope of authors' ability to waive their termination rights - they cannot do so. Thus, Section 304(c)5 of the 1976 Act was intended to and does redress the unfair results of Fisher Music :

[T]he termination right was expressly 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. That general purpose is plainly defined in the legislative history and, indeed, is fairly inferable from the text of Section 304 itself.

Mills Music Inc. v. Snyder, 469 U.S. 153, 172-73 (1985). To guard against a recurrence of the Fisher Music result, Congress added the "notwithstanding any agreement to the contrary" language, which, in effect, prevents authors from waiving or contracting away their termination rights.

An agreement subsequent to a works' creation that purports to make it a "work for hire" must also be construed as a prohibited "agreement to the contrary" under Section 304(c)5, if in fact it was not a work-for-hire. See 3 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 11.02[A][2] at 11-14 (2000) ("Parties to a grant may not agree that a work shall be deemed one made "for hire" in order to avoid the termination provisions if a "for hire" relationship . . . does not in fact exist between them.")

The termination right, a statutory property right created by Congress and embodied in the 1976 Act, would clearly allow Simon to terminate the 1940 and 1941 grants to Timely Comics of his rights to Captain America. His assignment of the copyright and renewal terms in the 1969 Settlement Agreement, being just such an "agreement to the contrary" as Congress deemed ineffectual, and having been executed eight years before the termination right even existed, cannot affect Simon's right to terminate and therefore cannot be the grounds for summary judgment for Marvel.

The 1969 Agreement Cannot be Construed to Retroactively
Make Simon An Employee-For-Hire of Timely Comics

The Authors Groups fundamentally dispute the central premises of plaintiff's motion, that a contradictory and immaterial statement appearing in a settlement agreement can effectively waive the inalienable right Congress afforded authors to terminate a copyright grant after 56 years (or 35 to 40 years for post-1978 works), and that this statement can retroactively apply to preclude a trial on the basic question of an author's status as copyright owner. Accord: 3 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 11.02[A][2] at 14 (2000) (termination right cannot be waived via agreement that erroneously labels property as a work-made-for-hire: "it is the relationship that in fact exists between the parties, and not their description of that relationship, that is determinative.")

The 1969 Settlement Agreement contains an assignment of all Simon's copyright interests in Captain America, including "all rights to renewal and extension of copyright." Platt Aff. Ex. 10, Par. 3(a). It required Simon to sign any documents necessary to effectuate the "settlement and transfer of rights recited herein," Platt Aff. Ex. 10, Par.5 (emphasis added). In that respect, it is unequivocally an agreement to transfer copyrights, and as such, has no effect on Simon's termination right. The "employee for hire" language on which Marvel's motion solely relies is buried at the end of the Agreement, and it materially and substantively conflicts with the transfer of copyright. The two concepts are mutually exclusive. Compare 17 U.S.C. § 106 (owner of copyright may license any of his exclusive rights in the work) with 17 U.S.C. § 201(b) (creator of copyrighted work made for hire is not the legal author and has no rights to grant). If Simon was in fact an employee-for-hire of Timely Comics, a fact that he disputes, there would have been no reason to negotiate and include the extensive and primary copyright transfer provisions in the 1969 Agreement. At most, the inclusion of "employee-for-hire" language makes the contract ambiguous, if not illogical.

For these reasons, the question of Simon's status as freelance author of Captain America or as employee-for-hire of Timely Comics cannot be answered by the terms of the 1969 Agreement itself, particularly where the issue was irrelevant to the settlement of that underlying lawsuit. The Agreement cannot retroactively make Simon an employee-for-hire if in fact he was not one. Nimmer on Copyright, supra at § 11.02[A][2] at 14 (2000). By contrast, the inalienable termination right, a new right created by Congress eight years after the Settlement Agreement was executed, makes the question of Simon's status dispositive to the outcome of the instant case. Only a trial on the ultimate question can properly and justly determine that question. Id .

Simon's Notices of Termination are Fair and Appropriate

Marvel's claim of equitable estoppel is very troubling to the Authors Groups because it distorts the scope of the author's obligations under the termination provision. Contrary to Marvel's insinuation, Simon did not, by attempting to exercise the right of termination, engage in inequitable or unfair conduct. His notices appear to have followed the requirements of Sections 304(c)4 and 304(c)5 to the letter. He had no additional legal or equitable obligation to inform Marvel of his intentions. Nor was his decision to serve the notices unfair to Marvel. Perhaps one or more of the characters he has created in his long career can tell the future, but, being human, Simon cannot. When he signed the Settlement Agreement, the inalienable right of termination was years away from existence. Had the parties known in 1969 that Congress would create a new right for authors, and that nothing an author agreed to could waive that right, all the parties might have behaved differently. As it is, however, Simon has done nothing more than what the 1976 Copyright Act allows him to do, and on a timely basis.

Nor will Marvel lose its investment in the marketing and exploitation of Captain America, as described in its litany of licensing and merchandising activity. (Pl. Mem. at 8, 18-19). While Congress made a policy decision in drafting Section 304(c) that the time, labor, creativity and expense involved in exploiting an author's original work warrant significant copyright benefits, at the same time it decided that such benefits accrue only to a limited extent. For example, only the original author or specific statutory heirs thereof may exercise the termination right, and then only in accordance with strict and intricate notice and timing provisions. Perhaps most significantly, however, is the "derivative works exception" to the termination right, which states in part that "[a] derivative work prepared under authority of the grant before its termination may continue to be utilized under the terms of the grant after its termination…."17 U.S.C. § 304(c)6(a)). This provision undeniably protects grantees such as Marvel from losing the benefits of their initial bargains with authors. Marvel's proceeds from all the Captain America merchandise and other derivative works it has created or licensed will continue to belong to it.

Congress intended no more and no less in granting termination rights than that the original author of a work have the chance to renegotiate the terms of his original grant for works that remained valuable after many years, in order to alleviate to a small degree exactly the kind of inequity that, should Simon prove to have been a freelance creator of Captain America, has occurred here. By the same token, no injustice would be suffered by Marvel from a trial on the issue of original ownership, regardless of the verdict.

Incentives Underlying the Act to Promote Creativity Will be Harmed if Marvel Prevails

The underlying public policy of our copyright laws has always been to promote the store of knowledge through private market incentives for creators. As the Supreme Court has repeatedly observed:

The economic philosophy behind the clause empowering Congress to grant patents and copyrights is the conviction that encouragement of individual effort by personal gain is the best way to advance the public welfare through the talents of authors and inventors in science and useful arts.

Mazer v. Stein, 347 U.S. 201, 219 (1954). Accord Harper & Row, Inc. v. Nation Enterprises, 471 U.S. 539, 545-46 (1985); Sony Corp. of America v. Universal City Studios, 464 U.S. 417, 429 (1984). Congress effectively provided the incentive of "personal gain" to authors by giving them limited monopoly rights to their work and the ability to market those rights. Thus, Section 106 of the Act gives exclusive rights, inter alia, to reproduce, distribute, and prepare derivative works based upon their copyrighted work, and to license those rights to others.¹

The Authors Groups believe that acceptance of plaintiff's argument that the 1969 Settlement Agreement eliminates Simon's opportunity to demonstrate that he has the right to recapture the Captain America grants would harm, not promote, the "progress of science and the arts," because it would, for all practical purposes, wipe out the value to authors of the termination right, significantly injuring their financial interests.

Marvel's own papers illustrate the impressive amounts of money it will realize from continuing to exploit Captain America, authored by Simon, and its derivative works. Authors cannot afford not to share in their works' long-term success, rare as such success is. Most of the Authors Groups' members struggle to earn a living from their craft. They can ill afford to turn their backs on opportunities to earn money from others' exploitation of their work if they want to continue to create.² Marvel's clearly erroneous disregard for Section 304(c)5 of the Act, which was enacted to protect authors from giving up their intellectual property forever without knowing its long-term value, would make it much harder for creators to do so.³

Conclusion

The Authors Groups respectfully submit that plaintiff's motion ignores the a major provision of the Copyright Act, 17 U.S.C. § 304(c)5, its legislative history and the clear intent of Congress that authors cannot permanently contract away their valuable intellectual property. This fundamental tenet of copyright should at a minimum afford Simon the right to a jury trial on whether or not he is entitled to terminate the grants made almost 60 years ago to Marvel's predecessor.

For all these reasons, the Authors Groups respectfully urge the Court to find that Simon has raised a material issue of fact as to his authorship of Captain America, and to deny Marvel's motion to obtain from this Court what Congress has decreed might well belong to Simon - the final years of ownership of Captain America, his creation.

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