The Legal View: The Missing Siegel Check

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201111111806 The Legal View: The Missing Siegel Check
by Jeff Trexler

The most revealing development in the Siegel case since I last wrote for The Beat involves a check. Not the check issued to Siegel and Shuster in exchange for the Superman copyright, but one that DC has apparently* not written–payment to the Siegel family for Grant Morrison’s relaunch of Action #1.The Superman copyright dispute has for the most part been quiet in the past few months. Appellate briefing has been postponed until December 22, and DC’s ongoing lawsuit against Siegel and Shuster attorney Marc Toberoff involves a separate issue that will get its own post. The reappearance of the original check that paid for Superman was indeed a historic moment—if ever a check belonged in the Smithsonian, this is it—but from a legal standpoint it’s nothing new. An image of the check has been part of the public record for over 70 years.

The new Superman, however, is a far more intriguing issue—particularly Morrison’s version, which draws from core elements of the character originally appearing in the Superman material co-owned by the Siegels. Reduced powers, a social justice mission, and even specific images and story beats call back to original material whose copyright is now shared with the Siegels’ daughter and his widow’s estate.

Of course, the court decision awarding the Siegel heirs half of the copyright in Action #1 and other original material is on appeal, so to a certain extent it’s no surprise that DC has yet to account for the Siegel family’s share of the Action relaunch, let alone any other material derived from the Superman character in the DCNu.

Nonetheless, the Superman relaunch also represents a missed opportunity for DC to advance the PR strategy it has pursued since the appointment of Daniel Petrocelli as its outside counsel—namely, to shift public sentiment away from the heirs while attempting to drive a wedge between the heirs and Toberoff. The lawsuit filed against Toberoff tried to accomplish this by recasting DC & its corporate family as an enlightened company that was willing to give the Siegel and Shuster heirs a settlement worth millions of dollars until Toberoff (allegedly) scuttled the deal for his own personal gain.

To reinforce its benevolent image, DC could have announced that it was placing 50% of the proceeds from the Morrison relaunch in trust for the Siegel heirs pending the litigation’s final outcome. In fact, it could have generated considerable goodwill by giving 50% of the Action #1 proceeds to the Siegel family with no strings attached. DC could have taken either approach without conceding the legitimacy of the Siegel heirs’ legal claims—a trust would have had an express reference to the ongoing dispute, while an outright grant could have been presented as a gratuitous acknowledgment of Jerry Siegel’s acknowledged contribution to the Action relaunch, a la DC’s this-is-not-a-settlement stipend for Siegel and Shuster in 1976.

So if DC isn’t using the relaunch to promote itself as sympathetic to the Siegel legacy, why would DC let the material go to print? The fact that DC has made express reference to the character traits, story content and design of the original Superman material in dispute has significance beyond the relaunch, especially in light of management’s concession last summer that company lawyers do indeed vet new material prior to publication.

At the very least, the Action relaunch reinforces the argument that prompted me to return to writing about the Siegel case—namely, that DC’s lawyers are not relying on a claim that the current Superman is a wholly different character from the original. As I explained in a previous post, the notion that a court is likely to use the Gaiman decision to justify splitting Superman in two was grounded more in wishful thinking than the law, and DC’s lawyers would not be wise to bet the super-farmboy on this outcome.

But more generally, DC’s evident lack of payment for the Siegel material in the new Action #1 is what it is—a reflection of DC’s belief that it owes the Siegels nothing or far less than 50%. Morrison’s incorporation of the disputed original material in his new Action—and DC’s failure to pay for it—is consistent with the two-part DC strategy that we have discussed since the court awarded the Siegel heirs half the Superman copyright back in 2008.

On the one hand, DC is arguing that the Siegel heirs do not own any Superman material, or at best what they do own is insubstantial. Because the Siegel heirs failed to include the promotional ads for Action #1 in their filing to terminate the transfer of copyright, DC claims that the company owns the elements of the character that appeared in these ads–elements that, according to DC, represent the Superman’s core defining traits. Even if a court were to find that certain incidental aspects of the disputed content were not derivative of this material—e.g., the Daily Star or Krypton—the value of this material, and thus the money owed the Siegel family, would be relatively small.

In the alternative, should the lower court’s original narrow interpretation of the promotional ad material be upheld on appeal, DC has also argued that the disputed original material co-owned by the Siegel family would itself be of relatively little value. The strategy here pertains primarily to the responsibility of a co-owner to account for profits, and DC is arguing that the Siegel family’s share in post-termination material is far less than 50%. According to DC, the improvements and adaptations created by DC—including those by Morrison and other creators of the DCNu—are the primary source of the character’s ongoing commercial viability; without DC’s original contributions, the early Siegel and Shuster material would have little to no market value.**

Were we to allow for a bit more corporate calculation, it’s even possible to see the Morrison relaunch as a deliberate attempt to maximize the value of the original Siegel and Shuster material while it is still owned by DC—not just by generating profits from it directly, but by adding distinct DC-owned elements that could be later used as the basis of an infringement claim against the Siegel and Shuster heirs should they ever publish or license Superman stories themselves. Lois Lane’s boyfriend, the variations on the costume, the specific manifestations of Superman’s concern for social justice—virtually all aspects of the repurposed Superman arguably contain new elements that DC could claim as its own. Moreover, the success of Morrison’s Siegel-and-Shuster-inspired relaunch could help drive down the value of the heirs’ own attempt to revive the original version of the character.

Does such resonance with DC’s legal strategy make Morrison a complicit servant of the corporate Leviathan, Superman Inc.? When I started this series, my analysis was described as an attack on Morrison’s character. I disagree, and barring another five-month gap, I’ll explain why.

*My attempts to confirm whether or not DC made any payments to the Siegel family for the use of co-owned material in the relaunch were unsuccessful. If anyone has evidence that DC has secretly been compensating the Siegel heirs for their share of the Superman copyright, please feel free to pass it on!

**One could make a distinct contrast between Morrison’s stylized relaunch and Joe Casey’s more literal use of the 1938 version of the character in The Adventures of Superman 612. Morrison’s version has seen a substantial rise in sales and public interest; Casey’s version, which retained the look and feel of the Siegel and Shuster original, presumably did not generate a sustainable spike in demand.

Comments

  1. john layman says:

    The Siegels and Shusters heirs are greedy monsters.

    Isn’t the $130 they received in the early 1930s, like, FIVE TRILLION dollars in 21st Century money?

  2. One the one hand you’re making the argument that those traits – depowered, daily star, social justice are core traits of the original and then on the other saying its dc strategy to suggest they aren’t via-a-vis Morrison’s use of them. Isn’t it more likely that using those traits puts DC’s claims at something of a risk? Isn’t Morrison potentially making siegel claims more resonant not less?

  3. Because I don’t know, how does DC typically pay “creator royalties” — is it, in fact, monthly? Quarterly? Semi-annually? Is there a natural lag for, say, newstand returns, etc?

    It doesn’t feel like we should be screaming about nuACTION #1 royalties here at the 10 week mark? I’d think they’d naturally run 6-ish months in abeyance?

    -B

  4. You’d be right, Brian. Royalties don’t come that fast.

    Would that they did!

  5. Peter says:

    Correct me if I’m wrong, but aren’t royalties paid out once every financial quarter?

  6. Depends on the terms, Peter.

    In some deals, yes, in many others, no. Even at one comics publisher, there can be different payment periods at the same time, and have been.

    kdb

  7. Jeff Trexler says:

    @john layman We’re not quite Weimar Germany. Yet.

    @Dan For purposes of accounting for the Siegel share of the profits, the present emphasis on the 1938 elements throws into relief the relative absence of these elements in other work, such as earlier post-termination comics, the character’s subsequent development in the DCNu timeline and past/ongoing films. Sure, the Siegels would stand to get a somewhat greater percentage for the period in which the 1938 elements play a larger role, but DC still co-owns those elements and it’s clear from the character’s development w/in the 5-year DCNu that their time in the foreground is bounded.

    Re Morrison’s possible subversive intent–that’s something I’ll be discussing. Until then, I’d recommend re-reading the Invisibles, v.3:1, p.8, panel 5; the ongoing Batman/Leviathan saga; and Nietzsche, Beyond Good and Evil, IV.146.

    @Brian Hibbs @Kurt Busiek @Peter I’m aware of the time delay in paying royalties, as I am aware of the process of accounting for profits between co-owners & the unresolved dispute re accounting in of the Siegel lawsuit. However, this post is not decrying a failure to pay tout de suite.

    In writing this post, I meant what I said–DC’s silence vis the Siegels is an interesting missed opportunity. The company could have said it was cutting a check, announced that a check was forthcoming or announced that a share of the profits would be held in trust. Instead, the PR for this adaptation of the disputed Siegel material proceeded as if the Siegels did not exist. It’s a dog that didn’t bark and the silence is significant.

  8. >> In writing this post, I meant what I said–DC’s silence vis the Siegels is an interesting missed opportunity.>>

    That’s not actually what you said, though. You said, among other things, that you’ve attempted to confirm whether DC has made any payments to the Siegel family for the co-owned material in the relaunch. This doesn’t suggest that you know royalty payments don’t happen that fast; it suggests you were trying to find out whether profits from the relaunch had already been paid out, at a time when they won’t have yet been calculated.

    Your article refers to the payments in the past tense, as if you expect they’d have already been made; your response here put them in the future tense, as if that’s what you meant all along.

    You do seem to be grasping at straws to find significance — a couple of columns back, you found it significant that Superman was wearing different clothes in ACTION #1, and you built an argument around the idea that Grant making Superman different from what he used to be was part of a plan to disenfranchise the creators by changing the character and pointing out he was different now. I disagreed with you then, noting that what Grant was doing didn’t look like it was moving away from the original version of Superman, but rather appeared to be moving closer to the original. Sure enough, that turned out to be correct — and now you’re making the argument that Grant making Superman more like he used to be, not less, may be part of a plan to disenfranchise the creators.

    If it suggests a plan to disenfranchise the creators regardless of what Grant actually does — it’s a plan is he makes Superman different, it’s a plan if he makes Superman more similar — then there doesn’t seem to need to be a plan at all, because you’re perceiving a plan either way, and what Grant actually does is irrelevant. Even when what he does turns out to be the reverse of what you expected, you still see that plan.

    I doubt that any part of what Grant’s doing is being fed to him by DC’s lawyers as part of a court strategy; if it was, he wouldn’t have taken the gig, but done something where he had a freer hand. I expect that if DC’s lawyers use Grant’s version of Superman in any way, they’ll be working out an argument based on what Grant does, rather than having Grant do something based on an argument they’ve come up with. You’re looking at what Grant does, constructing an argument in reaction to it, and then assuming that the argument predated the creative work; I don’t think that’s necessary. Particularly since, as you’ve now demonstrated, whatever Grant does, you can construct an argument (however shaky) that it serves to undermine the status of the creators.

    Sometimes, if a dog doesn’t bark, it’s because there’s no dog there.

  9. svenj says:

    “To reinforce its benevolent image, DC could have announced that it was placing 50% of the proceeds from Morrison relaunch in trust for the Siegel heirs pending the litigation’s final outcome.”

    —DC could have invested all its profits into digging a hole thru the earth as well.

    As Mr. Busiek points out far more kindly, this is speculative nonsense. It certainly makes its author look clueless…

  10. I’m with Kurt. It would, of course, be one thing if DC had made a public statement that they were NOT going to pay royalties on Action #1. But if the royalties wouldn’t have been paid yet anyway, then the fact that they haven’t been paid surely tells us nothing one way or the other.

    I also agree that if the primary motivation behind the revamp was to bolster DC’s legal case, it’s unlikely that DC would have entrusted that role to a writer as eccentric as Grant Morrison, even if he had any interest in such an assignment. DC’s back catalogue must be littered with stories that illustrate differing views about the core features of Superman, capable of supporting virtually any argument you care to make about him.

  11. Jeff Trexler says:

    @svenj In the immortal words of Grant Morrison himself, “heh.”

    The core of the post is a recap of DC’s actual legal arguments–read the case records for yourself and you’ll see. I’m a big believer in trying to present legal issues in a more engaging way than a dry recap. If you don’t find it significant that the Siegels weren’t part of the mix in the Superman relaunch PR, hey, YMMD, but it would be irresponsible for a company in DC’s position not to pay attention to possible issues and opportunities.

    Re digging a hole through the earth: money spent on brand management or strategy aimed at undermining a litigant’s determination to go forward is not frivolous; businesses spend billions on it daily. The frivolity comes in not doing it well. Making the biz look benevolent & fair is a standard element in strategy today–even lawyers, who have traditionally been tone deaf to PR, are catching on to it, as is evident by Petrocelli’s approach.

    @Kurt Busiek Thanks, always, for your thoughtful comments. Re inquiring about past payments: my inquiry was actually prospective as well as retrospective, and it went beyond a check. As here, I presented it not in terms of royalties, but as identity management in connection with a public controversy & an ongoing legal strategy.

    One could make an analogy to 1976–DC hadn’t paid Siegel or Shuster anything, but the company didn’t legally owe them any compensation either. However, DC could have from the start incorporated payments to the pair as part of its marketing budget–and the this-is-not-a-settlement with S&S was nothing if not damage-control PR.

    In regard to the dictates of lawyers: more on that later, but for now, I’ll simply say that I’m not speaking primarily in terms of story and character dictates handed down by counsel from on high. Think memes, not memos.

    Re grasping at straws to find significance–not at all. On a meta level, DC’s lawyers have a responsibility not to let stuff out that will hurt the case. They’re the corporate analog to Socrates’ daimon, except perhaps not always so attuned to the ideal good. Beyond the issue of possible harm, as an attorney I’d also look at company material as a possible resource for buttressing an argument–in this case, primarily in regard to accounting for profits, which as the big magilla once the ownership issue is resolved.

    As a business tactician, I’d aggressively look for ways to exploit property in ways that maximize both short- and long-term revenue from the IP at issue in the case, while throttling possible competition. Perhaps DC isn’t doing that–maybe DC is indeed a paradise of the imagination where creators can run free–but I know plenty of companies & executives who would take a granular approach far closer to what I suggest in my posts.

    My analysis of relaunch material admittedly is multidimensional. One aim has been to air a rigorous lawyer’s thought process when reviewing material and setting parameters. Another–and I expressed this to Heidi from the outset–has been to counteract the notion that DC was attempting to split Superman in two, a notion that was getting a bit of play when I started this series. My plan was always to kick around a number of apparent resonances, explore the possibility that DC was trying to split the character, then pull the rug out from under that notion with a more rigorous analysis of the relaunch in light of the Gaiman case. And except for an accidental slip of the delete key that cut out a “not” when editing a key sentence, that’s what happened.

    Of course, some observations along the way were admittedly fun (for a lawyer at least) resonances, akin to legal puns, a la the callbacks to the black-and-white promo ads. Maybe such callbacks are deliberate, maybe they aren’t, but it’s interesting that they pop up after the black-and-white hero became such a prominent element of the case. If one wants to ascribe that aspect of my analysis to having read way too much Derrida & McLuhan, I’ll happily plead guilty.

  12. Jeff Trexler says:

    @Paul O’Brien To expand further on my post–DC lawyers have strong reasons not to issue a royalty check, or at least to be extremely careful in so doing. DC is arguing in court that it owes the Siegels nothing, or at most, owes them far less than 50% of the current Superman property. If DC is to issue the Siegel family a royalty check, what should the amount be? Does DC want to concede that it owes the Siegels anything at all? What’s the value in sending a royalty check while the case is on appeal & apportionment unresolved? It raises fewer questions to do what DC is doing now–to toe the corporate line & say nothing re any payment to the Siegels, past or future.

    But is that the right thing to do? Strategically I think it misses an opportunity, hence my post. Morally, well, it’s fascinating to me that the discussion here is focused on the timing of royalty checks instead of the deeper implications of silence & inaction.

    It’s an issue that has equally interesting implications outside an abstract argument. For example, when Siegel first started writing his social justice Superman, one of his earliest stories concerned the commercial appropriation of Superman’s name and likeness. The story is a window into the soul of an author who knows he has created an industry but sees others taking all the credit and cash for themselves. Will the relaunched social justice Superman fight the same fight?

  13. Synsidar says:

    This analysis of the battle between the Burroughs heirs and MGM over the rights to Tarzan is interesting, since what common sense might indicate is copyright infringement isn’t infringement in a legal sense.

    In the case of literary works, it is axiomatic that copyright protection only extends to the expression of the author’s idea, not to the idea itself. (citations) Thus, in determining whether two such works are so substantially similar as to reveal an infringement of one by the other, courts must decide whether the similarities shared by the works are something more than mere generalized ideas or themes. [. . .]

    If we take one of the most general patterns in Judge Hand’s series of abstractions, of course, there is a clear similarity between the Book and the 1932 film. Both tell the story of Tarzan, an ape-man living in the jungle, and Jane, a beautiful woman from civilized society, who meet in the jungle and fall in love. When we move to a more specific level of abstraction, however, the differences in the story overwhelm this general similarity. The Book is essentially Tarzan’s story, recounting his heritage, his upbringing and his search for his identity; the meeting with Jane, which occurs nearly mid-way through the Book, is only a part of Tarzan’s story.14 The film, on the other hand, is primarily Jane’s story expressing her fantasies and concerns, but telling little of Tarzan’s history and nothing of his actual parentage. There are many other differences as well.

    The reasoning the writers use here, if extended to Superman, suggests that using the hero, without violating whatever copyrights the Siegel and Shuster estates control, wouldn’t be difficult. Changing fairly small details would make the story unique.

    SRS

  14. Chris Hero says:

    I thought this was a pretty awesome article. But, I’ve also gone to law school and enjoy reading articles such as this one.

    I think people are missing the forest for the trees, though. All this article really does is illustrate some potential legal issues. I don’t get the impression Mr. Trexler is trying to solve them.

  15. comicsatemybrain says:

    A bit off-topic, but I will ask anyway:

    What I don’t understand is how the original canceled check from 1938 “escaped into the wild.”

    Since DC wrote the check, they are the ones who would receive the canceled document, right? If so, how is it that the canceled check isn’t sitting in some file cabinet somewhere in a DC document warehouse? Or was the practice in 1938 to cancel a check and then hand it back to the payee?

  16. gd

  17. Jeff Trexler says:

    @Synsidar The Tarzan case is relevant in a couple of useful ways. One is the argument you mention; the other is MGM’s retention of the right to use Tarzan because the termination filing was incomplete. That’s basically the result DC hopes to obtain thanks to the promotional ads left out of the Siegels’ termination notice.

    @Everyone It’s been suggested that Grant Morrison’s overt use of Superman material now in dispute is damaging to DC. Actually, that’s not the case. Using early Siegel material is seriously problematic only if DC were relying on a claim that the current Superman is a wholly different character not at all derived from the original. DC is not staking its case on this argument, so it has little to lose.

    It’s also worth noting that re-using the disputed material does not hurt DC financially. The lower court awarded the Siegels half ownership of the material in dispute, with DC retaining ownership of the unterminated Shuster share. Yes, if the decision is not reversed or vacated, DC has to account for the Siegel family’s share of any profits made from the exploitation of the co-owned material. But let’s say that the court eventually determines that the Siegels own fifty percent of the current character–DC still gets 50% of the profit. Half the profit from 150,000 copies a month of a book expressly referring to the disputed material is still more money for DC than half the profit from a version selling a third of that.

    @Chris Hero Thanks! You’re correct–I’m explaining the law as it stands and offering possible connections to DC’s actions. Since courts and corporations are notorious for making unexpected (even illogical) decisions, I don’t presume that everything I note is fixed in stone. My writing also reflects common teaching techniques in law school, where it’s rather common to push arguments to their limits to get people to see weaknesses, consequences or values that might have otherwise escaped notice.

    I’ve already intimated at what I was doing with the first series here at the Beat–illustrating how lawyers probe the possible implications of material under review and setting up the split-the-Superbaby argument in preparation for knocking it down. That wasn’t grasping at straws; it was a deliberate plan of attack.

    The Missing Siegel Check starts the next phase of my analysis. On one level it served as a convenient hook for a recap of DC’s core legal arguments. However, it also set up a discussion of how the Siegel case raises deeper issues of character. After all, as I indicate in the post, DC is arguing that it owes the Siegels nothing or far less than half; it has little motivation for paying or promising to pay the Siegels for the relaunch except to sell people on its good faith.

    In this regard, DC’s lack of any mention of the Siegels in connection with the Superman relaunch says as much about us as DC. The company has come under considerable criticism for its treatment of the original creators and their heirs, yet DC did not treat this reputational problem as something it needed to address when promoting material clearly co-owned (pending appeal) by the Siegels. The company knows that there can be a big difference between consumer opinion and praxis–ethical objections tend to give way when they keep us from getting what we want.

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