NO.
`
`In the Supreme Court of the United StatesIn the Supreme Court of the United States
`In the Supreme Court of the United States
`
`In the Supreme Court of the United StatesIn the Supreme Court of the United States
`
`LISA R. KIRBY, NEAL L. KIRBY, SUSAN N. KIRBY,
`BARBARA J. KIRBY,
`
`Petitioners,
`
`v.
`
`MARVEL CHARACTERS, INCORPORATED,
`MARVEL WORLDWIDE, INCORPORATED,
`MVL RIGHTS, LLC, WALT DISNEY COMPANY,
`MARVEL ENTERTAINMENT, INCORPORATED,
` Respondents.
`
`On Petition for Writ of Certiorari to the
`United States Court of Appeals for the Second Circuit
`
`PETITION FOR WRIT OF CERTIORARI
`
`MARC TOBEROFF
` Counsel of Record
`TOBEROFF & ASSOCIATES, P.C.
`22337 Pacific Coast Hwy, Suite 348
`Malibu, CA 90265
`(310) 246-3333
`mtoberoff@toberoffandassociates.com
`
`Counsel for Petitioners
`
`Becker Gallagher · Cincinnati, OH · Washington, D.C. · 800.890.5001
`
`
`
`In the Supreme Court of the United StatesIn the Supreme Court of the United States
`In the Supreme Court of the United States
`
`In the Supreme Court of the United StatesIn the Supreme Court of the United States
`
`LISA R. KIRBY, NEAL L. KIRBY, SUSAN N. KIRBY,
`BARBARA J. KIRBY,
`
`Petitioners,
`
`v.
`
`MARVEL CHARACTERS, INCORPORATED,
`MARVEL WORLDWIDE, INCORPORATED,
`MVL RIGHTS, LLC, WALT DISNEY COMPANY,
`MARVEL ENTERTAINMENT, INCORPORATED,
` Respondents.
`
`On Petition for Writ of Certiorari to the
`United States Court of Appeals for the Second Circuit
`
`PETITION FOR WRIT OF CERTIORARI
`
`MARC TOBEROFF
` Counsel of Record
`TOBEROFF & ASSOCIATES, P.C.
`22337 Pacific Coast Hwy, Suite 348
`Malibu, CA 90265
`(310) 246-3333
`mtoberoff@toberoffandassociates.com
`
`Counsel for Petitioners
`
`Becker Gallagher · Cincinnati, OH · Washington, D.C. · 800.890.5001
`
`
`
` i
`QUESTIONS PRESENTED
`
`The Copyright Act grants the children of a deceased
`author the right to recover the author’s copyrights by
`statutorily terminating prior copyright transfers. 17
`U.S.C. §§ 304(c), (d). “Works for hire” are the sole
`exclusion. Id. Petitioners, the children of the
`acclaimed comic-book artist/creator Jack Kirby (The
`Fantastic Four, X-Men, The Mighty Thor, The
`Incredible Hulk, etc.), served statutory notices of
`termination on the Marvel respondents regarding the
`key works Kirby authored as an
`independent
`contractor in 1958-63.
`
`Section 26, the “work for hire” provision of the 1909
`Copyright Act, applicable to pre-1978 works, states
`simply: “The word author shall include an employer in
`the case of works made for hire.” For six decades,
`including in 1958-63, “employer” was duly given its
`common law meaning, and “work for hire” applied
`solely to conventional employment, not to independent
`contractors like Kirby. It follows then, in 1958-63
`Kirby was the original owner of the copyrights to the
`works he authored and subsequently assigned to
`Marvel, and his children have the right to recapture his
`copyrights by termination of such assignments under
`17 U.S.C.§304(c).
`
`In 1972, the Second Circuit expanded section 26’s
`straightforward “work for hire” definition to encompass
`independent contractors via a presumptive “instance
`and expense” test. This test has been roundly criticized
`as overbroad and inequitable by the leading copyright
`commentators. In 2003, the circuit acknowledged that
`the judicial expansion of section 26 was based on its
`
`
`
` ii
`mistaken construal of implied assignment cases as
`“work for hire” cases, but nonetheless continued to
`convert freelance work into “work for hire” long after
`its creation.
`
`In this case, the court of appeals held it undisputed
`that Kirby worked purely as an independent contractor
`and paid all expenses of creating his works, that
`Marvel was not obligated to pay, nor paid, for Kirby
`submissions it did not wish to publish, and that Kirby
`executed contemporaneous copyright assignments to
`Marvel. The court nonetheless affirmed summary
`judgment against petitioners Susan and Barbara
`Kirby, ruling that all of Kirby’s creations, published in
`1958-63 by Marvel, were presumptively its “works for
`hire” under the “instance and expense” test,
`eliminating these petitioners’ statutory termination
`rights.
`
`The first question presented is whether a court can
`constitutionally take copyrights to works originally
`owned and authored by an independent contractor and
`hand them to a private party by judicially re-
`designating them “works for hire.”
`
`The second and related question is whether
`“employer” under the 1909 Act can be judicially
`extended beyond conventional employment
`to
`independent contractors, when this contradicts its
`common
`law meaning, binding Supreme Court
`precedent and longstanding canons of statutory
`construction.
`
`The third question is whether “work for hire” can be
`determined based on post-creation contingencies, like
`
`
`
` iii
`discretionary payment, when authorship and
`ownership of a copyrightable work, including “work for
`hire,” vests at inception.
`
`
`
` iv
`PARTIES TO THE PROCEEDING
`
`Petitioners are Lisa R. Kirby, Neal L. Kirby, Susan
`N. Kirby, and Barbara J. Kirby,
`the
`defendants–counter-claimants–appellants below.
`Respondents are Marvel Characters, Incorporated,
`Marvel Worldwide, Incorporated, MVL Rights, LLC,
`the plaintiffs–counter-defendants–appellees below, and
`Walt Disney Company and Marvel Entertainment,
`Incorporated, the counter–defendants–appellees, below.
`
`
`
` v
`TABLE OF CONTENTS
`
`QUESTIONS PRESENTED . . . . . . . . . . . . . . . . . . .
`
`i
`
`PARTIES TO THE PROCEEDING . . . . . . . . . . . .
`
`iv
`
`TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . viii
`
`PETITION FOR WRIT OF CERTIORARI . . . . . . . . 1
`
`OPINIONS BELOW . . . . . . . . . . . . . . . . . . . . . . . . . 1
`
`JURISDICTIONAL STATEMENT . . . . . . . . . . . . . . 1
`
`CONSTITUTIONAL AND STATUTORY
`PROVISIONS INVOLVED . . . . . . . . . . . . . . . . . . . . 1
`
`STATEMENT OF THE CASE . . . . . . . . . . . . . . . . . 3
`
`A. Statutory Background . . . . . . . . . . . . . . . . . . . . . 7
`
`B. Factual and Procedural History . . . . . . . . . . . . 10
`
`REASONS FOR GRANTING THE WRIT . . . . . . . 14
`
`I.
`
`THE DECISION BELOW IS CONTRARY TO
`THE 1909 ACT AND BINDING SUPREME
`COURT PRECEDENT . . . . . . . . . . . . . . . . . 14
`
`A. The Plain Language of the Statute
`Controls . . . . . . . . . . . . . . . . . . . . . . . . . . 14
`
`B. The Legislative History Reinforces this
`Plain Reading . . . . . . . . . . . . . . . . . . . . . 16
`
`
`
` vi
`the
`C. CCNV Effectively Overruled
`“Instance and Expense” Test . . . . . . . . . 17
`
`II.
`
`THE “INSTANCE AND EXPENSE” TEST IS
`WRONG . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
`
`A. Use of the “Test” to Turn Work Assigned
`by
`Independent Contractors
`into
`“Work For Hire” Is Based on an
`Admitted Misreading of
`Implied
`Assignment Cases . . . . . . . . . . . . . . . . . . 21
`
`B. This Case Demonstrates that the “Test”
`Is Vague, Subjective and Overbroad . . . 24
`
`C. The Test, as Applied to Kirby, Conflicts
`with the Fundamental Principle that
`Authorship Vests at Creation . . . . . . . . . 28
`
`III.
`
`THE COURT’S RE-DESIGNATION OF
`KIRBY’S ORIGINAL COPYRIGHTS AS
`“WORK FOR HIRE,” DECADES AFTER
`CREATION, IS UNCONSTITUTIONAL . . 30
`
`A. The Judicial Transfer to Marvel of Kirby’s
`Underlying Copyrights and of His
`Family’s Copyright Termination Interest
`Violates the Takings Clause . . . . . . . . . . 30
`
`B. Judicial Elimination of Established
`Rights Based on
`this Arbitrary
`and Subjective Standard Violates Due
`Process . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
`
`
`
` vii
`C. Judicial Expansion of Section 26 of the
`1909 Act
`to
`Include
`Independent
`Contractors Violates the Separation of
`Powers and Undermines Both the 1909
`and 1976 Copyright Acts . . . . . . . . . . . . . 36
`
`IV.
`
`THIS CASE IS A CLEAN VEHICLE . . . . . 37
`
`CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
`
`APPENDIX
`
`A. Opinion, United States Court of Appeals for the
`Second Circuit
`(Aug. 8, 2013) . . . . . . . . . . . . . . . . . . . . . . . . App. 1
`
`B. Opinion, U. S. District Court for the Southern
`District of New York
`(July 28, 2011) . . . . . . . . . . . . . . . . . . . . . . App. 49
`
`C. Order, denying rehearing or rehearing en banc,
`United States Court of Appeals for the Second
`Circuit
`(Oct. 22, 2013)
`
`. . . . . . . . . . . . . . . . . . . . . App. 113
`
`D. 17 U.S.C. §304 (c) . . . . . . . . . . . . . . . . . . . App. 115
`
`E. 17 U.S.C. §304 (d)
`
`. . . . . . . . . . . . . . . . . . App. 121
`
`F. Letter from Supreme Court Clerk regarding
`grant of extension of time for filing a petition for
`writ of certiorari
`(Dec. 13, 2013) . . . . . . . . . . . . . . . . . . . . . App. 123
`
`
`
` viii
`TABLE OF AUTHORITIES
`
`CASES
`
`Brattleboro Publishing Co. v. Winmill
`Publishing Corp.,
`369 F.2d 565 (2d Cir. 1966) . . . . . . . . . . 21, 22, 23
`
`Clackamas Gastroenterology Assocs., P.C. v. Wells,
`538 U.S. 440 (2003) . . . . . . . . . . . . . . . . . . . . . . 15
`
`Community for Creative Non-Violence v. Reid ,
`490 U.S. 730 (1989) . . . . . . . . . . . . . . . . . . passim
`
`Easter Seal Society for Crippled Children &
`Adults of Louisiana, Inc. v. Playboy Enterprises,
`815 F.2d 323 (5th Cir. 1987) . . . . . . . . . . . . . . . 27
`
`Eldred v. Ashcroft,
`537 U.S. 186 (2003) . . . . . . . . . . . . . . . . . . . . . . 36
`
`Estate of Burne Hogarth v. Edgar Rice
`Burroughs, Inc.,
`342 F.3d 149 (2d Cir. 2003) . . . . . . . . . . . . passim
`
`Fogerty v. Fantasy, Inc.,
`510 U.S. 517 (1994) . . . . . . . . . . . . . . . . . . . . . . 26
`
`Gregg v. Georgia,
`428 U.S.153 (1976) . . . . . . . . . . . . . . . . . . . . . . . 32
`
`Harper & Row Publishers, Inc. v. Nation
`Enterprises,
`471 U.S. 539 (1984) . . . . . . . . . . . . . . . . . . . . . . 28
`
`
`
` ix
`Hawaii Hous. Auth. v. Midkiff,
`467 U.S. 229 (1984) . . . . . . . . . . . . . . . . . . . . . . 34
`
`Hilton v. S.C. Pub. Rys. Commission,
`502 U.S. 197 (1991) . . . . . . . . . . . . . . . . . . . . . . 22
`
`Hughes v. State of Wash.,
`389 U.S. 290 (1967) . . . . . . . . . . . . . . . . . . . . . . 35
`
`Kelley v. Southern Pacific Co.,
`419 U.S. 318 (1974) . . . . . . . . . . . . . . . . . . . . . . 18
`
`Kelo v. New London,
`545 U.S. 469 (2005) . . . . . . . . . . . . . . . . . . . . . . 34
`
`Lingle v. Chevron U.S.A. Inc.,
`544 U.S. 528 (2005) . . . . . . . . . . . . . . . . 33, 34, 35
`
`Marks v. United States.
`430 U.S. 188 (1977) . . . . . . . . . . . . . . . . . . . . . . 31
`
`Martha Graham School & Dance
`Found., Inc. v. Martha Graham
`Center of Contemporary Dance, Inc.,
`380 F.3d 624 (2d Cir. 2004) . . . . . . . . . . . . . 24, 25
`
`Mazer v. Stein,
`347 U.S. 201 (1954) . . . . . . . . . . . . . . . . . . . . . . . 7
`
`Mills Music, Inc. v. Snyder,
`469 U.S. 153 (1985) . . . . . . . . . . . . . . . . . . . . 8, 37
`
`Molzof v. United States,
`502 U.S. 301 (1992) . . . . . . . . . . . . . . . . . . . . . . 14
`
`
`
` x
`Nationwide Mut. Ins. Co. v. Darden,
`503 U.S. 318 (1992) . . . . . . . . . . . . . . . . . . . . . . 15
`
`N.Y. Times v. Tasini,
`533 U.S. 483 (2001) . . . . . . . . . . . . . . . . . 8, 37, 38
`
`NLRB v. United Ins. Co. of America,
`390 U.S. 254 (1968) . . . . . . . . . . . . . . . . . . . . . . 15
`
`Park ‘N Fly, Inc. v. Dollar Park and Fly, Inc.,
`469 U.S. 189 (1985) . . . . . . . . . . . . . . . . . . . . . . 14
`
`Picture Music, Inc. v. Bourne, Inc.,
`457 F.2d 1213 (2d Cir. 1972) . . . . . . . . . . . passim
`
`Playboy Enterprises, Inc. v. Dumas,
`53 F.3d 549 (2d Cir. 1995) . . . . . . . . . . . . . passim
`
`Robinson v. Baltimore & Ohio R. Co.,
`237 U.S. 84 (1915) . . . . . . . . . . . . . . . . . . . . . . . 18
`
`Ruckelshaus v Monsanto,
`467 US 986 (1984) . . . . . . . . . . . . . . . . . . . . . . . 34
`
`Siegel v. National Periodical Publications, Inc.,
`508 F.2d 909 (2d Cir. 1974) . . . . . . . . . . . . . . . . 24
`
`Sony Corp. v. Universal Studios,
`464 U.S. 417 (1984) . . . . . . . . . . . . . . . . . 7, 34, 36
`
`Standard Oil Co. v. United States,
`221 U.S. 1 (1911) . . . . . . . . . . . . . . . . . . . . . . . . 14
`
`Stewart v. Abend,
`495 U.S. 207 (1990) . . . . . . . . . . . . . . . . . . 7, 8, 36
`
`
`
` xi
`Stop the Beach Renourishment, Inc. v.
`Florida Department of Environmental
`Protection, 560 U.S. 702 (2010) . . 6, 31, 32, 33, 35
`
`Tennessee Valley Auth. v. Hill,
`437 U.S. 153 (1978) . . . . . . . . . . . . . . . . . . . . . . 36
`
`Welch v. Texas Dep’t of Highways &
`Public Transportation,
`483 U.S. 468 (1987) . . . . . . . . . . . . . . . . . . . . . . 22
`
`Yardley v. Houghton Mifflin Co.,
`108 F.2d 28 (2d Cir. 1939) . . . . . . . . . . . . . . 21, 22
`
`CONSTITUTION
`
`U.S. Const. art. I, §8, cl.8 . . . . . . . . . . . . . . . . . . . 1, 2
`
`U.S. Const. art. I, §1 . . . . . . . . . . . . . . . . . . . . . . . . . 2
`
`U.S. Const. amend. V . . . . . . . . . . . . . . . . . . . . . . . . 2
`
`STATUTES
`
`17 U.S.C. §24 (1976 Ed.) . . . . . . . . . . . . . . . . . . . . . . 7
`
`17 U.S.C. §26 (1976 ed.)(repealed) . . . . . . . . . . . 2, 14
`
`17 U.S.C. §62 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
`
`17 U.S.C. §101, et seq. . . . . . . . . . . . . . . . . . . . . . . . . 8
`
`17 U.S.C. §203(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
`
`17 U.S.C. §304(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
`
`
`
` xii
`
`17 U.S.C.§304(c)
`
`. . . . . . . . . . . . . . . . . . . . . . . passim
`
`17 U.S.C. §304(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . 9
`
`17 U.S.C. §304(c)(4)(A) . . . . . . . . . . . . . . . . . . . . . . . 9
`
`17 U.S.C. §304(c)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . 8
`
`17 U.S.C. §304(c)(6)(A) . . . . . . . . . . . . . . . . . . . . . . . 9
`
`17 U.S.C. §304(c)(6)(D) . . . . . . . . . . . . . . . . . . . . . . . 9
`
`17 U.S.C. §304(d) . . . . . . . . . . . . . . . . . . . . . . . 2, 3, 10
`
`28 U.S.C. §1254(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
`
`OTHER AUTHORITIES
`
`Black’s Law Dictionary, 2d Ed. (1910) . . . . . . . . . 15
`
`Copyright Term Extension Act,
`Pub. L. 105-298 (1998) . . . . . . . . . . . . . . . . . . . . . 9
`
`H.R. Rep. No. 94-1476 (1976) . . . . . . . . . . . . . . . 8, 38
`
`H.R. Rep. No. 105-452 (1998) . . . . . . . . . . . . . . . . . 10
`
` 3 Melville Nimmer and David Nimmer,
`. . . . . . . . . . . . . . . . passim
`Nimmer on Copyright
`
`Josh Patashnik, Bringing a Judicial Takings
`Claim, 64 Stan. L. Rev. 255 (2012) . . . . . . . . . . 34
`
`2 W. Patry, Patry on Copyright
`
`. . . . . . . . . . . . . . . 23
`
`
`
` xiii
`Barbara A. Ringer, Copyright Law Revision Study
`No. 31 “Renewal of Copyright” (June 1960) . . . 16
`
`Stenographic Report of the Proceedings of the
`Librarian’s Conf. on Copyright, 2d Sess. 188
`(Nov 1-4, 1905), reprinted in 2 Legislative
`History of the 1909 Copyright Act (1976) . . . . . 16
`
`B. Varmer, Copyright Law Revision Study No. 13,
`“Works Made for Hire and on Commission,”
`Studies Prepared for the Copyright Office,
`Reprinted by the Senate Subcommittee on
`Patents, Trademarks and Copyrights of the
`Committee on the Judiciary, 86th Cong., 2d
`Sess. 127 (1960) . . . . . . . . . . . . . . . . . . . . . . . . . 17
`
`
`
` 1
`PETITION FOR A WRIT OF CERTIORARI
`
`Lisa R. Kirby, Neal L. Kirby, Susan N. Kirby and
`Barbara J. Kirby respectfully petition for a writ of
`certiorari to review the judgment of the U.S. Court of
`Appeals for the Second Circuit.
`
`OPINIONS BELOW
`
`The Second Circuit’s opinion is reported at 726 F.3d
`119 and reprinted at App.1-48. The opinion of the U.S.
`District Court for the Southern District of New York is
`reported at 777 F.Supp.2d 720 and reprinted at
`App.49-112. The Second Circuit’s order denying
`rehearing and rehearing en banc is unreported but
`reprinted at App.113-14.
`
`JURISDICTIONAL STATEMENT
`
`The Second Circuit filed its opinion on August 8,
`2013, and denied rehearing and rehearing en banc on
`October 22, 2013. Justice Ginsburg extended the time
`for filing a petition for writ of certiorari to March 21,
`2014. App.123-24. This Court has jurisdiction under
`28 U.S.C. § 1254(1).
`
`CONSTITUTIONAL AND STATUTORY
`PROVISIONS INVOLVED
`
`The U.S. Constitution’s Copyright and Patent
`Clause, art. I, § 8, cl. 8, provides, in relevant part:
`
`The Congress shall have Power . . .
`. . . .
`
`
`
` 2
`To promote the Progress of Science and useful
`Arts, by securing for limited Times to Authors
`and Inventors the exclusive Right to their
`respective Writings and Discoveries;
`. . . .
`
`The U.S. Constitution’s art. I, § 1, provides:
`
`All legislative powers herein granted shall be
`vested in a Congress of the United States, which
`shall consist of a Senate and House of
`Representatives.
`. . . .
`
`The Fifth Amendment of the U.S. Constitution
`provides, in relevant part:
`
`No person shall be . . . deprived of life, liberty,
`or property, without due process of law; nor shall
`private property be taken for public use, without
`just compensation.
`. . . .
`
`Section 26 of the 1909 Copyright Act, 17 U.S.C. § 26
`(1976 Ed.) provides in relevant part: “The word author
`shall include an employer in the case of works made for
`hire.”
`. . . .
`
`The pertinent provisions of 17 U.S.C. §§ 304(c), (d)
`are set forth in the appendix to this petition (App.115-
`22).
`
`
`
` 3
`STATEMENT OF THE CASE
`
`The 1976 Copyright Act provides authors and their
`heirs with a vital right to recover copyrights for the
`extended renewal term by statutorily terminating prior
`copyright assignments. 17 U.S.C. §§203(a), 304(c), (d).
`Congress’ objective in enacting the termination
`provisions was to remedy authors’ unequal bargaining
`positions, and to benefit authors and their families once
`the true value of a work is established. The sole
`exemption are “works for hire” as to which the
`employer is deemed the “author” and owner of the work
`at inception. Id.
`
`Jack Kirby, who died in 1994, was one of the most
`influential comic book artists and creators of all time.
`App.3. In 2009, the petitioners, Kirby’s four children,
`served Marvel with notices of termination under
`section 304(c), regarding the characters Kirby had
`created or co-created as an independent contractor in
`1958-63, including The Fantastic Four, X-Men, The
`Mighty Thor, The Incredible Hulk and The Silver
`Surfer. App.52.
`
`Marvel filed suit for a declaratory judgment that
`petitioners’ statutory termination was void. App.10.
`Marvel claimed that Kirby’s freelance creations were
`all “works for hire” under section 26 of the 1909
`Copyright Act (“The word author shall include an
`employer in the case of works made for hire.”). Id.
`
`For the first six decades of the 1909 Act, including
`1958-63 when Kirby created his works, section 26
`applied solely to conventional employment, not to
`independent contractors. App.34-35. Four years
`
`
`
` 4
`before the enactment of the 1976 Act, Picture Music,
`Inc. v. Bourne, Inc., 457 F.2d 1213 (2d Cir. 1972)
`expanded section 26 to encompass independent
`contractors, via the so-called “instance and expense”
`test, misinterpreting implied assignment cases as
`“work for hire” cases. App.36.
`
`Here, although most of the parties resided in
`California, Marvel raced to New York to take
`advantage of the Second Circuit’s presumptive
`“instance and expense” test, which invariably finds
`that the pre-1978 work of an independent contractor is
`“work for hire” under the 1909 Act. App.10, 36, Joint
`Appendix (filed in Second Circuit Case No. CV-11-3333,
`“JA”)(I) 21, 68, 72, 76. The “instance” prong turns on
`whether the publisher was “the motivating factor”
`which induced the work’s creation. App.84. The
`“expense” prong turns on whether the publisher paid “a
`sum certain” for the freelance work.
` App.92.
`Satisfaction of this easily satisfied test creates an
`almost irrebuttable presumption that the parties
`intended that the work be “for hire.” App.84.
`
`The district court granted Marvel summary
`judgment, holding the “test” satisfied, depriving Kirby
`of his original copyrights under the 1909 Act, “as a
`matter of law,” and his children of their valuable
`termination interests under the 1976 Act. App.49-112.
`
`The court of appeals affirmed. App.1-48. It found
`undisputed, however, that in 1958-63: (1) Kirby
`worked solely as an independent contractor from his
`home, and shouldered all costs of creation (App.7);
`(2) that “Marvel paid Kirby…for [only] those pages it
`accepted…[and] was free to reject Kirby’s pages and
`
`
`
` 5
`pay him nothing for them.” (App.44); and (3) the only
`contemporaneous agreement between the parties
`consisted of legends on the backs of Marvel’s checks,
`assigning Kirby’s copyrights in that work Marvel chose
`to buy. App.47.
`
`It is a cardinal rule of statutory construction that
`where words in a statute have a well-known meaning
`at common law they are presumed to have been used in
`that sense unless the statute indicates otherwise. This
`Court has thus construed “employer” and “employee” in
`numerous statutes under the common law of agency,
`differentiating “independent contractors.” The 1909
`Act’s reference to “employer” is no different.
`
`As to the 1976 Act, Community for Creative Non-
`Violence v. Reid, 490 U.S. 730 (1989) criticized and
`rejected the overbroad “instance and expense” test, and
`per the same canon of statutory construction,
`determined “work for hire” employment based on the
`common law of agency. Though leading commentators
`view CCNV as effectively overruling the “instance and
`expense” test, the Second Circuit both in Estate of
`Burne Hogarth v. Edgar Rice Burroughs, Inc., 342 F.3d
`149, 163 (2d Cir. 2003) and this case dismissed CCNV’s
`fundamental analysis as mere “dicta” with regard to
`the 1909 Act. App.37, n.8.
`
`The courts below confirmed that “work for hire”
`turns on the mutual intent of the parties, and that
`“instance and expense” establishes presumptive intent.
`App.33-46, 83-95. But neither court would address how
`the parties could have intended Kirby’s work to be “for
`hire” when in 1958-63 this applied solely to traditional
`employment. App.35, 1-112. Nor could they address
`
`
`
` 6
`the contradiction between a test held satisfied by post-
`creation contingencies, like Marvel’s discretionary
`payment for only those works it chose to accept, and
`the
`fundamental
`copyright principle
`that
`authorship/ownership of a work vests upon its creation.
`Id.
`
`It is beyond dispute that in 1958-63, when Kirby
`authored his works as an independent contractor, he
`owned the original copyrights under section 26 of the
`1909 Act, both as written and construed in binding
`precedent. App.7, 35. The court of appeals’ wholesale
`transfer of Kirby’s original copyrights to Marvel, by
`expanding section 26, contrary to the canons of
`statutory construction and Supreme Court precedent,
`violated the Fifth Amendment. See Stop the Beach
`Renourishment, Inc. v. Florida Department of
`Environmental Protection, 560 U.S. 702, 715 (2010).
`
`This is the first case to use the controversial
`“instance and expense” test for “work for hire” under
`the 1909 Act to eviscerate the 1976 Act’s inalienable
`termination right, and it did so with respect to a major
`independent artist and numerous invaluable works.
`App.3, 7. Kirby, the creative genius who redefined an
`industry from a small drafting board in his basement,
`without financial security or any participation in the
`success of his creations, epitomizes the very
`author/publisher imbalance Congress sought to remedy
`in enacting the termination provisions. App.7. If this
`unsupported, overbroad “test” is left unchecked, the
`“work for hire” exception will swallow the rule, and gut,
`as it did here, the vital termination interests of
`numerous authors and heirs as to a vast number of
`works.
`
`
`
` 7
`This case presents a clean vehicle where the
`presumptive “instance and expense” test was held
`dispositive, and it demonstrates its worst features. The
`judicial re-drafting of the 1909 Act, permitting easy
`circumvention of the 1976 Act, requires this Court’s
`intervention. Only this Court can realign “em-
`ployment” under the 1909 Act with the common law of
`agency, as mandated by its precedent, bring uniformity
`and predictability to this important area of federal
`copyright law, and salvage the concerted congressional
`objective of the 1976 Act’s termination provisions.
`
`A. Statutory Background
`
`1. “The economic philosophy behind the [Copyright]
`clause … 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 [] in ‘[] useful Arts.’” Mazer v. Stein, 347 U.S.
`201, 219 (1954). Under the Constitution, “it is
`Congress that has been assigned the task of defining
`the scope of the limited monopoly that should be
`granted to authors.” Sony Corp. v. Universal Studios,
`464 U.S. 417, 429 (1984). Commencing with the
`Copyright Act of 1831, Congress has used this power to
`provide authors and their families with the right to
`recover transferred copyright interests and has
`strengthened those rights over time. See Stewart v.
`Abend, 495 U.S. 207, 217-20 (1990).
`
`2. Under the Copyright Act of 1909, copyright
`protection was divided into two separate 28-year terms:
`the “initial” and “renewal” terms. 17 U.S.C. §24 (1976
`Ed.). Congress intended the renewal copyright to
`benefit authors and their families. See Stewart, 495
`
`
`
` 8
`U.S. at 219. Effective January 1, 1978, the Copyright
`Act of 1976 significantly enhanced authors’ rights. 17
`U.S.C. §101 et seq. It extended the renewal term under
`the 1909 Act from 28 to 47 years. 17 U.S.C. §304(a).
`Congress intended to give the benefit of these
`additional years to authors rather than to grantees for
`whom the automatic grant of the extension would be a
`windfall. See H.R. Rep. No. 94-1476 at 140 (1976). It
`therefore coupled the extension with a new right of
`authors and their families to recapture their copyrights
`by
`terminating decades-old copyright
`transfers
`“notwithstanding any agreement to the contrary.” 17
`U.S.C. §304(c)(5).
`
`“The principal purpose…was to provide added
`benefits to authors...More particularly, the termination
`right was expressly intended to relieve authors of the
`consequences of
`ill-advised and unremunerative
`grants…”. Mills Music, Inc. v. Snyder, 469 U.S. 153,
`172-73 (1985). Congress recognized that publishers
`held
`far greater bargaining power and
`that
`consequently, authors commonly agreed to one-sided
`grants which precluded them from sharing in the
`success of their works. Id. The results were often
`supremely unfair, as when a work proved to have
`enduring commercial value, but enriched only the
`grantee. Congress created termination rights to
`“safeguard[] authors against unremunerative
`transfers” made before their works were commercially
`exploited, and to give authors and their families a
`second chance to obtain a more equitable portion of a
`copyright’s value when it is no longer conjectural. H.R.
`Rep. No. 94-1476, at 124 (1976); see N.Y. Times v.
`Tasini, 533 U.S. 483, 496 n.1 (2001) (recognizing
`Congress’ intent to re-adjust “the author/publisher
`
`
`
` 9
`balance” by providing an “inalienable authorial right to
`revoke a copyright transfer”).
`
`Termination is carried out by serving advance
`notice of termination on the original grantee or its
`successor. 17 U.S.C. §304(c)(4)(A). Authors and their
`heirs may terminate pre-1978 grants during a five-year
`window beginning fifty-six years after copyright was
`secured by publication. 17 U.S.C. §304(c)(3). The
`termination provisions reflect a deliberate balance of
`competing interests determined by Congress.1 For
`instance, it is no coincidence that the 1909 Act provided
`fifty-six years of copyright protection, and that the
`1976 Act provided for termination of pre-1978 transfers
`after fifty-six years. That symmetry ensured that
`transferees were not deprived of any benefits for which
`they bargained under the 1909 Act.
`
`In the Copyright Term Extension Act, Pub. L. 105-
`298 (1998), Congress reaffirmed its objectives with
`respect to the 1976 Act’s termination provisions by
`
`1 For instance, the 1976 Act gives a terminated grantee a
`competitive advantage in reacquiring copyrights recaptured under
`its termination provisions. See 17 U.S.C. §304(c)(6)(D); 3 Melville
`Nimmer and David Nimmer, Nimmer on Copyright (“Nimmer”)
`§11.08[A], n.6. As the Act has no extraterritorial application,
`termination applies only to the U.S. copyright, id. §11.02[B][2] at
`11-19, and in the case of joint works, like comic books, only to the
`terminating co-author’s pro-rata share thereof. Both make
`exploitation independent of a terminated grantee practically
`impossible. A terminated grantee can continue to distribute pre-
`termination derivative works, 17 U.S.C. §304(c)(6)(A); and new
`derivative works, when termination is by the co-author of a joint
`work, subject to a duty to account to the co-author. See 1 Nimmer
`§6.12[A].
`
`
`
` 10
`coupling a further renewal term extension with a
`second termination right in 17 U.S.C. §304(d). See
`H.R. Rep. No. 105-452, 105th Congress, 2d Sess., at 8
`(1998) (the intention is for “original authors of works
`and their beneficiaries to benefit from the extended
`copyright protection”).
`
`3. “Works for hire” are the sole exemption from
`termination under 17 U.S.C. §304(c) and (d), which
`apply only to pre-1978 works of authorship. The 1909
`Act governs whether a work published before 1978 is a
`“work for hire.” 17 U.S.C. §62 (renumbered to §26 in
`1947, text unchanged, repealed 1978).
`
`B. Factual and Procedural History
`
`1. Jack Kirby was a prolific comic book creator and
`illustrator who revolutionized the industry, and created
`or co-created Marvel’s most enduring and profitable
`superheroes including Captain America, The Fantastic
`Four, The Mighty Thor, The Incredible Hulk, and The
`X-Men. App.6, 51.
`
`Jack Kirby began his career in the Depression.
`App.5. With Joe Simon, he created Captain America
`and many other characters that they sold to publishers,
`including Marvel. App.5-6. They disbanded in 1956.
`This case concerns the works created by Kirby and
`published by Marvel in 1958-1963. App.7.
`
`The following facts were held undisputed and
`supported by the record. In 1958-63, Kirby worked
`solely as an independent contractor, out of the
`basement of his home, set his own hours, paid his own
`overhead and all expenses of creating and selling his
`
`
`
` 11
`work, which Marvel did not reimburse. App.7. Like
`other freelancers, Kirby was paid neither a fixed wage
`nor for his services, but was paid only for that work
`Marvel chose to purchase. Id. If work was rejected,
`Kirby was not compensated, and personally took the
`loss. App.44. Marvel did not withhold any taxes, or
`provide Kirby with any benefits. App.91. Kirby was
`free to sell and sold work to other publishers while
`selling to Marvel. App.8. Kirby was also free to use
`rejected work he had created for a Marvel project in
`work that he sold to other publishers. JA(IV) 1084-86
`¶¶17-20; JA(V) 1123-1131.
`
`Marvel asserted economic power in lean times, but
`as to creative matters Kirby largely had a “free hand.”
`App.9 (“It is beyond dispute, moreover, that Kirby
`made many of the creative contributions, often
`thinking up and drawing characters on his own,
`influencing plotting, or pitching fresh ideas.”).
`
`
`In 1958-1963, and until the mid-seventies, Marvel
`avoided any written engagement agreement or legal
`obligations to Kirby. App.7; 103; 44 (“Marvel paid
`Kirby a flat rate for those pages it accepted…[and] was
`free to reject Kirby’s pages and pay him nothing for
`them.”). Conversely, Kirby had no legal obligations to
`Marvel. Everything pointed to the simple purchase
`and assignment in 1958-63 of those Kirby works
`Marvel accepted for publication – the converse of “work
`for hire.”
`
`Thus the only contemporaneous agreements
`between Marvel and Kirby consisted of legends on the
`back of Marvel’s checks to Kirby expressly assigning
`his copyrights in the work Marvel purchased. App.105.
`
`
`
` 12
`The first formal contract, dated June 5, 1972, was
`entitled “Assignment,” and detailed Kirby’s assignment
`to Marvel of all his work that Marvel had published.2
`App.51.
`
`2. In late 2009, petitioners served Marvel with
`notices under 17 U.S.C. §304(c) to recover their father’s
`copyright interests by statutory termination of his
`assignments
`to Marvel,
`including
`the 1972
`“Assignment.” App.52.
`
`
`3. On January 8, 2010, Marvel sued the Kirby
`children in New York, though two of three Marvel
`plaintiffs, their owner Disney, and two of the four
`Kirbys resided in California. App.10. Marvel contested
`the Kirbys’ notice of termination, claiming “work for
`hire” (17 U.S.C. §304(c)’s sole exclusion) under the
`Second Circuit’s “instance and expense” test. Id.
`
`The district court granted Marvel summary
`judgment. App.49-112. It held that “instance” is
`satisfied if Marvel was a “motivating factor” in the
`works’ creation and had “the power” to accept or reject
`Kirby’s work, and that “in this Circuit, the ‘expense’
`requirement is satisfied ‘where a hiring party simply
`pays an independent contractor a sum certain for his or
`her work.’” App.92 (citation omitted). As this applies
`
`2 Consistent with the assignment agreement on Marvel’s checks,
`its March 24, 1975 agreement with Kirby specifies Marvel’s
`ownership with copyright assignment language. App.103. As late
`as 1976-1977, Marvel still couched its freelancer relationships in
`terms of the purchase and assignment of their material, not “work-
`for-hire.” JA(VII) 1885 ¶7, 1894 ¶7; Confidential Appendix (filed
`in Second Circuit Case No. CV-11-3333)(I) 87 ¶7, 96 ¶7, 105 ¶7.
`
`
`
` 13
`to nearly all published works, the court found the “test”
`easily satisfied, and held that “Marvel is presumed to
`be the[] ‘author’ [of all Kirby works published by it in
`1958-63], and the holder of the statutory copyright as
`a matter of law.” App.8
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