DC Comics wins crucial victory in Superman legal battle

Handing a major victory to DC Comics, a California federal judge has ruled the heirs of Superman co-creator Joe Shuster surrendered the ability to reclaim their 50-percent interest in the property in a 1992 agreement with the publisher.

While the decision likely will be appealed, for now it means DC and parent company Warner Bros. can use the Man of Steel any way they wish beyond Oct. 26, 2013, when the Shuster estate would have recaptured its copyright to the first Superman story in 1938's Action Comics #1. However, the companies must account for any profits earned from the property with the family of co-creator Jerry Siegel, which reclaimed its share in 2008 through a provision of the U.S. Copyright Act (the scope of that decision is on appeal). Had the Shuster estate succeeded, DC and Warner Bros. eventually would have been unable to use many of the character's defining aspects, including his secret identity, his origin, certain elements of his costume and powers (super-strength and super-speed), and Lois Lane -- barring a new agreement with the families of the two creators, naturally.

On Wednesday, U.S. District Judge Otis D. Wright granted DC's motion for partial summary judgment on the issue of whether the Shuster estate's 2003 copyright-termination notice was invalidated by a 20-year-old agreement with the late artist's sister Jean Peavy. The publisher had argued the family relinquished all claims to the Man of Steel in 1992 in exchange for “more than $600,000 and other benefits,” including payment of Shuster’s debts following his death earlier that year and a $25,000 annual pension for Peavy.

Although Wright appeared somewhat swayed by the argument made last month by Shuster attorney Marc Toberoff that DC never intended the "ambiguous" document to transfer ownership of copyright to "a billion-dollar property," the judge ultimately found "that the 1992 agreement, which represented the Shuster heirs’ opportunity to renegotiate the prior grants of Joe Shuster’s copyrights, superseded and replaced all prior grants of the Superman copyrights."

Indeed, Wright noted that when DC increased survivor benefits from $5,000 to $25,000 a year, Peavy said she understood and agreed to the admonition from then-Executive Vice President Paul Levitz that, “this agreement would represent the author/heir’s last and final deal with DC, and would fully resolve any past, present, or future claims against DC.” The judge also pointed out that under a 1975 agreement with Siegel and Shuster, DC provided each of the two creators with lump sums (in today's dollars) of $75,000 and lifetime annual payments of $80,000, survivor benefits and insurance -- "as well as 'credits' on new Superman works" -- amounting to more than $4 million (not counting medical benefits and "bonuses").

In a statement to The Hollywood Reporter, Toberoff, who also represents the Siegel family, said, "We respectfully disagree with its factual and legal conclusions, and it is surprising given that the judge appeared to emphatically agree with our position at the summary judgment hearing."

The trade paper suggests, however, that Toberoff may find cause for appeal in Wright's comment that, "The broad and all-encompassing language of the 1992 agreement unmistakably operates to supersede all prior grants."

Still ahead is a Nov. 5 hearing before the 9th Circuit Court of Appeals in which DC will argue the 2008 ruling that found the Siegel family had reclaimed its stake in Superman should be overturned. Toberoff will also seek to define precisely what elements of the characters are covered by the decision.

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