THE WORK FOR HIRE TWIST OF THE GAIMAN v. MCFARLANE CASE

[MattBrady]

While the memories people have of the most recent legal go-round between Neil Gaiman and Todd McFarlane was that it closed a can of worms, it may have opened another. Or closed one …depending upon where you’re standing.

It’s a twist ending to a creator’s rights case that even Law & Order wouldn’t have seen coming.

At issue is a near-throwaway statement made by Circuit Judge Posner, in his opinion, wherein he said:

"But not when the work is a compilation, as Spawn No. 9 plainly is. For it contains, besides Gaiman's contributions and goodness knows who else's, a letter-to-the-editors column containing a number of signed letters from fans plus art work contributed by fans. As McFarlane concedes, the copyrights on those letters and on the art work are owned by the fans and his copyrighting the issue is not a claim to own their copyrights."

It all comes down to a word in Judge Posner’s ruling: compilation. By declaring Spawn #9 (the issue with Angela and Medieval Spawn, which are now co-owned by Gaiman and McFarlane) to be a compilation, that work, and by extension, all works of a similar nature are now, in the eyes of the law (more on that in a moment) are “compilations.”

So what? While it sounds like legal minutiae that only a lawyer could love, it has broader applications – especially if you’re a comics creator.

For years, comics have skirted the line in actual work for hire law, in that they didn’t fit clearly and cleanly into one of the nine categories that are set out in subsection (2) of the definition of “work made for hire” in the Copyright statute.

The closest matches for comics have been argued to be somewhere between a “collective work” and a “compilation,” but no one could ever get the comic shaped peg to fit into the legal hole. It’s small, but it’s still wiggle room that has caught the eye of a few creators – and lawyers over the years. Because the law did not specifically say that comic books are either collective works or compilations, it could be argued – somewhat tenuously, but still argued – that working on a comic book does not constitute a technical “work made for hire” situation.

The categories are defined as:

Collective work - a work, such as a periodical issue, anthology, or encyclopedia, in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole.

Compilation - a work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship. The term "compilation" includes collective works.

“Now, arguably, comics aren't compilations - although the reprints and trade paperbacks could be, as the content of the comic is essentially new, not pre-existing,” said Michael Lovitz, a copyright lawyer specializing in the comic industry. “And there is some question as to whether they constitute a collective work, other than the anthologies - although the question remains whether the addition of advertisements and/or a letters page would be sufficient to qualify a comic book as a collective work.”

So – the back and forth had continued for a few years – and the debate went on in certain circles of creators, always with the question along the lines of, “Is what I did for (insert publisher name here) really work for hire?”

In the publisher’s eyes, of course, the work done by creators is 100% “work made for hire,” and comics fall into either the compilation or collective work category of the WFH laws, and therefore, they are work made for hire.

So – if the works are work for hire, what does that mean? Legally, a lot. Under WFH laws, the company employing the creator owned the rights to the creation from the moment of creation, and the creator had no way to claim any of the rights in the work done by that creator.

This is where the history comes in – what we’re building to here doesn’t deal with or affect any of the cases that had come up or are still in negations between Golden Age creators and publishers (such as Jerry Siegel’s survivors and DC Comics over the rights to Superman). In those instances, it was argued that the characters/properties were created first and then brought to the publisher, and so were not made under WFH. Instead, the rights to the character/property were assigned to the publisher. After a set period of time, the assignment of those rights can be terminated, and reclaimed (within a set window of opportunity) by the creator.

The current WFH definitions (although they left out comic books) finally took effect in 1978, and every creator who has worked for Marvel or DC, or any other major publisher under a WFH agreement has been subject to them.

Since then though, publishers have tried to plug up any wiggle room in the definition of work for hire by putting words into each creator's contract to the effect of “if it is later ruled that this work was not in fact, a work made for hire, then you agree to give the rights fully to us.”

“While work for hire says the author never owned any rights, the law concerning the assignment of rights is that transfers are something that can be terminated and the rights revert back to the creator,” Lovitz said. “So, if comics are not eligible to be covered by ‘work made for hire,’ then the assignment language in fact does kick in, which means the reversion right kicks in as well.”

So – see what all of this has to do with Neil Gaiman, Todd McFarlane, Anglea, Medieval Spawn, and Cogliostro?

A case to decide ownership of some characters, who, in the grand scheme of things, ended up with a ruling that has defined comics into a clear work for hire category. Something that hasn’t been done in the 26 years since the definitions went into effect.

According to the 7th Circuit Court, comic books are compilations.

But again, “So what?” some might say. “This is just some judge’s comment in a ruling that dealt with something else entirely.”

Ah – but this was said by a Circuit Judge in an on-the-record opinion. It’s not just someone talking out of school. It’s a precedent.

“This is a ruling that's pretty high up,” Lovitz said. “In the Federal hierarchy, you have District Court, followed by Circuit Court of Appeals, which cover appeals from district court rulings from multiple states, followed by the Supreme Court. Circuit Court decisions involve three judges, and are law everywhere within that particular Circuit.”

However, one Circuit does not have to follow the ruling of any other Circuit – this is why, for example, the Supreme Court will soon hear the case of whether or not the phrase “under God” should be in the US Pledge of Allegiance – the Ninth Circuit Court has said it shouldn’t be, but others…disagree. To put it mildly.

“This ruling then, has no direct influence over the Second Circuit, which covers New York, a likely venue given Marvel and DC being headquartered there, or the Ninth Circuit, which covers California. On the other hand, such a ruling can be offered as being ‘persuasive,’ especially on a novel issue, that is, one not previously addressed, such as whether or not comic books are or are not work made for hire. If there’s a split between the opinions of two Circuits, that’s often the cause of cases going to the Supreme Court to resolve those discrepancies.”

So – who would find this inadvertent ruling by Judge Posner to be important to them, personally? Creators who have created properties and/or characters that were waiting for the revision period to kick in, in order to make a run for their rights, under the assumption that the work they did was not, in fact, “work made for hire.”

Say for example, a creator came up with an amazingly successful characters for a company who was then, in essence turned into an entire franchise. Alright, for an example, let’s use Gaiman himself and Sandman. While Gaiman would have signed a work for hire contract in the late ‘80s prior to the first issue of Sandman coming out, before Judge Posner’s ruling, he could have claimed that no, in fact, since comic books do not fall into one of the categories as defined by work for hire law (and even experts in the field can’t agree upon which category they should fit into), there is no way his work for a comic book could be work for hire (and he could fight the “even if it’s not work fire hire, we own it anyway” claim by publishers as well) – and seek the reversion of Sandman rights at the appropriate time. Would he have won the case? That’s a tough call. Would he have had a case that Sandman (and all that came later) were not work fore hire? It's possible that one could be made.

Note – this is not to say in any way that there’s ever been the slightest bit of a hint of a whiff that Gaiman feels this way. He was just a good example of a creator who has created a very, very profitable franchise for a publisher under current “work for hire” rules. Gaiman and Sandman were used as an example simply because, for the past 10 or so years, there haven’t been very many examples of creators creating successful, ongoing franchises for publishers.

But – as was said, prior to Judge Posner’s ruling, there was the aforementioned wiggle room for creators. After the ruling…it could be argued (probably persuasively) that that wiggle room is now gone, and comics do, in fact, fall under one of the nine categories of work made for hire, that is, as Judge Posner said, compliations.

That said, even Posner’s ruling may not rule out some creators, both in comics and other places in popular culture, from making a go for a reversion of rights. “Personally, I think you will see creators attempt it anyway,” Lovitz said. “Partly because I'm certain that there are also numerous novel writers who created Star Trek and Star Wars novels and assigned all rights to Paramount and LucasFilm, respectively, and will want to reclaim those rights.

“The point, then, is not so much that comic creators will see the Star Trek/Star Wars authors attempt to get their rights back by contesting work for hire; rather, they will see these guys terminating the assignment and say, ‘Wait, why can't we terminate our assignments?’ But of course, if the courts now see comics as work-for-hire, and therefore not something that was assigned, no case for the comic creators - who would then have to argue not work for hire, which this case now makes more difficult, or impossible.”

So there you go – a simple phrase by a Circuit Judge in an opinion over a creators-rights issue possibly ends up sealing a legal loophole that could have allowed creators to argue that the work they produced wasn’t work for hire, in essence, firming the publisher’s claim on the rights to the characters and properties created by their creators.

[Janin]

It's amazing how McFarlane has become everything he once stood against. A classic case of how large amounts of money can change a person completely.

[spider985]

All I can say is come on MacFarlane.

He is the only one of the image founding fathers to stick to his guys and go it alone, unlike Lee or Silvestri or even Larsen.

For standing by his guns alone he deserves my respect.

Note how I have completely erased Spawn/Batman from continuity like it deserves to be.

[MisterE]

Your comment makes no sense as McFarlane hasn't personally worked on Spawn in ages whereas Larsen writes, draws and inks every issue of Savage Dragon for the last 114+ issues.

McFarlane hasn't stuck to anything. He got rich, tipped his hat, bid the industry that made him wealthy goodbye and danced off into the night with his bags of cash.

Nothing wrong with that, of course, but it does point out how your portrait of him as the Patron Saint of Comics and "sticking to his guns" is illogical and incorrect.

[spider985]

My comment is merely reflecting the point that when the original Image creators left, they did so due to Marvels heavy handed editorial and creative interference, yet many of them, e.g. Jim Lee have left for DC, Liefeld is back at Marvel, Laresen has flirted with Marvel in the past and Marc Silvestri guested on New X-Men.

Whereas the Toddmiester stayed at Image.

yeah so he may have made a lot of money but so have the others.

Christ, this is what reading comics as a child does to you, loyalty to people you have never met.

Laters dude.

[from the gutter]

The new MAD magazine does a good natured rip on Neil Gaimen. Instead of Gaimen its Neil Gravemen and the book is "The BLANDMAN-Enless Tripe" Its pretty funny.


EDIT- I may be wrong but when Lee and the others co-created Image it wasnt because they never wanted to ever have anything to do with Marvel or DC ever again in the history of their careers. That would be limiting your creativity, if you have a story to tell that involves one of the great heroes or villians from Marvel or DC and can get a reasonable deal then why not do it. And if the company that you started becomes something you are not comfortable with why wouldnt you change if the occasion arises?

I have a different view of comics than I do with music. To me putting music out under a major label is bullshit. It has been proven that you can make your own music and have it on a label like Dischord and make a descent living. When I see all those losers on American Idol crying because now their dream is over it makes me want to puke. DO IT YOURSELF!! Now the independent industry may not be a furtile ground for pop music for the most part, but it has been proven to make money when signed to the right label or if you DIY and know how to market it.(not that I care if they sign or not, they are more likely to make the kind of mind numbing music that is written by writers in cubicals(sp?) with no redeaming message) Comics on the other hand are a different beast alltogether. Its not easy to make a living making your own xeroxed comic. And if your an amazing artist I see no problem going to work for DC or Marvel. Hell its not like Image is some underground phenom either. Its as mainstream as you can get without being co-owned by Viacom. So leaving Image for DC doesnt seem like a sellout to me, just a move to another major organization with different biz practices.

[crunch-o-matic]

All I have for McFarlane is contempt.

The utter smarm that comes from him even when he knows he is wrong absolutely turns me off from wanting his (or related by association) products in my store. It is a shame that this is the mark McFarlane will leave on the comics industry, even a win against him is a blow for creators rights but a loss would have been even worse.

Let's just hope his giant head has shrunk a little

[samnoir]

It just occured to me that Extreme Studios produced some Angela crossover books with Glory and maybe others. I wonder how that issue was handled or if it was covered in this case as well.

For that matter, what is the ownership status of a character like Over(t)kill who was created on a How To video in collaboration with Stan Lee and Rob Liefeld. Did Lee and Liefeld get any compensation when this character appears as an action figure or video game character (did he also appear in the animated TV show?).

_________________________________

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[MisterE]

Originally posted by spider985

Whereas the Toddmiester stayed at Image.

Thanks for the clarification. I do disagree, however. My own perspective is that Todd hasn't done something elsewhere is because he's given up on the biz to better enjoy his wealth. He doesn't do anything for his own title so it's logical he wouldn't do something elsewhere.

So while all those people you mention have strayed from Image, they are at least still active in the business in a creative capacity whereas Todd is not.

It's unfortunate though that Todd gave up his creative influence so quickly (starting somewhere in Spawn's teens IRC).

[spider985]

Originally posted by MisterE
Thanks for the clarification. I do disagree, however. My own perspective is that Todd hasn't done something elsewhere is because he's given up on the biz to better enjoy his wealth. He doesn't do anything for his own title so it's logical he wouldn't do something elsewhere.

So while all those people you mention have strayed from Image, they are at least still active in the business in a creative capacity whereas Todd is not.

It's unfortunate though that Todd gave up his creative influence so quickly (starting somewhere in Spawn's teens IRC).

I agree with you about his inactive role at Image, since I believe it is due to him that the ten year anniversary hard back from Image was delayed, and I have absolutely no problem with any artist working on books that I like.

I suppose I have less reapect for those guys though since some of them, even though they are working in contemporay comics, they have strayed away from their own creations. I would pay good money for Jim Lee to draw Wildcats again, or Silvestri to take over the chores on Darkness or Witchblade.

Laters.

[halflingsinger]

Gaiman = Sandman, Tim Hunter

McFarlane = Spawn, CYGOR (yes that is short for cybernetic gorilla)

You make the call.

[magellan]

On a somewhat unrelated note, I stopped liking MacFarlane ever since he all but destroyed Bendis' amazing Sam And Twitch series. Bendis leaves, MacFarlane took over, and 3 years later, his arc STILL hasn't been finished. By the time Bendis left the series it was the best thing to come out of Spawn in years. Present day, its STILL the best thing that ever came out of Spawn. That and the first season of the TV Show on HBO ;-)

[classicist]

It hasn't been made clear on the posts on this so far, but Posner is more than a little famous as an outspoken opinionated Judge. Once he found out that he was never going to make the Supreme Court (due to a couple of articles he wrote), he decided that he would say whatever the hell he wanted, Which was a lot (type his name into Amazon and see what you get). He'd be thrilled that people are analyzing one of his actual decisions - not just one of his Chicago School books - with such vigor.

[RDuarte]

Stop bashing Larsen! This guy has WRITTEN, PENCILED, and INKED (and sometimes colored) 114 consecutive issues of Savage Dragon. Unlike any other founding father, he has stuck with his original book, and will stick with it until he dies or issue 301 (whichever comes first).

Someone said he "flirted" with Marvel. He took extra assignments (writing Wolverine and penciling ASM, Thor, and an issue of Spider-Woman), but HE NEVER LEFT Savage Dragon. He's said many times that Savage Dragon doesn't make him rich, but it's a labor of love. The man has bills to pay, you know.

I just wish he wasn't publisher... It's going to keep him away from the drawing board.

[ParisCub]

I concur,

Posner is known for saying lots of things (most of them cr*p) on everything, and none of them very relevant in my opinion.

As for Todd McFarlane... Even if he was the 90s golden boy with Spawn, he went from famous to infamous, for his poor decisions and handling of his business.

And he's doing to other people what he actually reproached Marvel when he left... Sticking to his guns? I don't think so...

SOaking in his wealth and self-importance? Most probably

[Piferelli]

Is it me, or have we come to a point where the only time we read Tood McFarlane's name in articles anymore is when he's in court "fighting" for something. I could be poking and prodding a bit too much, but I could have sworn he was some kind of comic artist back in the day. Hey, didn't he do some cool stuff with that Spider-man character? Damn, I can't remember anymore...it was probably just a dream, or my dymensia creeping to the surface again.

[Primate]

It's a good thing the judge didn't arbitrarily say something like, "The Spawn franchise, which is owned by DC Comics..."

If we're taking everything this guys says as gospel when he's wearing his little black gown, it could be the makings of a legal nightmare! I can see it now...

"I rule that the jury, even the vegetarians, will have roast beef sandwiches for lunch...I rule that the prosecuting and defense attroneys must dance a tango for my amusement...I rule that anyone wearing blue has to leave the courtroom..."

[mrhelm]

I was going to post about the interesting ramifications for creator's right that this excellent article brings up, but it wouldn't be a conversation about Todd McFarlane, so I guess it doesn't go here.

Did anyone actually read this?

[Kody]

Here's the way I see it. McFarlane wanted to create Image so he could have control over what he created, and not hand his creation(s) over to a publisher. He wanted control over HIS creations, which he now has. Although some see the move as him fighting for OTHER creators to own their creation, that's also true. It's called Image Central.

I really feel that anyone going into a deal where they're working on a franchised character rather than pitching a creator owned book to Image Central is faced with the reality that the creator/owner of that book will have control over that book. Doing a book for Image Central that you own, and working on someone else's book that they own is not the same situation. My alalogy would be to apply the same situation to your home. You build your home, you want to retain control over that home. If you hire someone to add on a room or drop a pool in the back yard, you still own the house, the new room and the pool.

If Gaiman really wanted to own Angela and Cog I don't believe he would have added those characters to an already established book, he would have simply created a new book under his name with the characters with a creator owned publisher, or Image Central. This is why I believe it's sour grapes from the MiracleMan battle and nothing more.

[B.AllanDempsey]

But of course, if the courts now see comics as work-for-hire, and therefore not something that was assigned, no case for the comic creators - who would then have to argue not work for hire, which this case now makes more difficult, or impossible.”

I know this sentence is in English, but damned if I have any idea what it's saying.

BAD

[MudshovelForYou]

Originally posted by Kody
Here's the way I see it. McFarlane wanted to create Image so he could have control over what he created, and not hand his creation(s) over to a publisher. He wanted control over HIS creations, which he now has. Although some see the move as him fighting for OTHER creators to own their creation, that's also true. It's called Image Central.

I really feel that anyone going into a deal where they're working on a franchised character rather than pitching a creator owned book to Image Central is faced with the reality that the creator/owner of that book will have control over that book. Doing a book for Image Central that you own, and working on someone else's book that they own is not the same situation. My alalogy would be to apply the same situation to your home. You build your home, you want to retain control over that home. If you hire someone to add on a room or drop a pool in the back yard, you still own the house, the new room and the pool.

If Gaiman really wanted to own Angela and Cog I don't believe he would have added those characters to an already established book, he would have simply created a new book under his name with the characters with a creator owned publisher, or Image Central. This is why I believe it's sour grapes from the MiracleMan battle and nothing more.

That's not the problem. This comes down to the way McFarlane has treated the contract with Gaiman and then screwing around with the contract.

Furthermore, even if this is just over MiracleMan, it wouldn't be sour grapes, as there is evidence to suggest that McFarlane could have never purchased the rights legally, because of the way the contracts with Eclipse worked.

[classicist]

The most important ramification of all of this is that any comic creator can now claim that they own the rights to characters they created as if they had created them, and then sold them to the comics companies. So all of the hubbub we've seen about the rights to Captain America could potentially happen to any character. So Len Wein and Herb Trimpe could contest Marvel's ownership of Wolverine, despite the fact that he was created specifically for their run on Hulk (assuming that he was created under a WFH agreement, which would be legally questionable under the ruling).

While this ruling may be nice for creators, it has negative ramifications for capitalizing on characters, as the rights to them may always be in doubt. Marvel's financial motivation to make movies about Wolvie would be serious diluted if they have to pay off all of the creators in order to do so, and even less so if there's the prospect of an expensive civil trial hanging over their heads.

Of course, this is absolutely against what Posner would actually want. Uncertainty about rights increases the transaction costs of buying and selling properties so much that mutually beneficial exchanges (such as someone buying the rights to make a Wolvie movie from Marvel; Marvel wants to sell, and they want to buy, and can find a mutually agreeable price) might never happen. If Posner thought that his decision would lead to market distortions, he would use his gavel on his own head.

But it's probably a moot point: I would hope that the courts have learned to ignore most of what Posner says.

[classicist]

Originally posted by MudshovelForYou
That's not the problem. This comes down to the way McFarlane has treated the contract with Gaiman and then screwing around with the contract.

Furthermore, even if this is just over MiracleMan, it wouldn't be sour grapes, as there is evidence to suggest that McFarlane could have never purchased the rights legally, because of the way the contracts with Eclipse worked.

Ironically, it turns out that McFarlane never really owned the rights to MM in the first place - just some logos. At least that's what Gaiman now believes. Of course, if he tried to capitalize on that at this point, he'd get sued.

Sigh.

[Kody]

Maybe all the problems with ownership and rights to old characters will have a positive effect in that comics will move on and creators will continue to create, rather than recreate.

[Primate]

Originally posted by B.AllanDempsey
I know this sentence is in English, but damned if I have any idea what it's saying.

Oh, come ON, Dempsey! It's not THAT difficult. Look, let me spell it out for you...If creators are able to assertain that their rights...wait, that's not quite it...uhm, the comics companies, through their assignments, or contracts, or contractual assignmentations...or uhm, asinine contractualities...uh, make it impossible for creators to...uh...do something else related to the, uh...higher work for hire workings...

Uh...

Well, then. Never mind.