Guest on ComixLaunch

I was once again a guest on the ComixLaunch podcast. Tyler James and I discussed many of the nuances of work-made-for-hire agreements, and generally, how best to protect yourself contractually as a creator. Give it a listen. You can find it here: http://www.comixlaunch.com/session096/.

If you want to know more about making comics or running Kickstarter campaigns, you should consider subscribing to the podcast and follow the ComixLaunch page.

Licensing Basics

           Licensing Expo kicks off this week in Las Vegas. If you’ve never heard of it, a simplified explanation is it’s a trade convention where brand owners can seek out companies interested in licensing their brands for use on other goods and services and vice versa. Licensing is important to brands for a number of reasons, but two of the biggest are additional revenue and increasing brand awareness.

Licensing Expo is a good excuse to discuss licensing for comic book creators. The first thing to keep in mind is that licensing rights are valuable. A typical licensing deal will involve an advance, a royalty percentage paid on sales, and a minimum guaranteed amount payable to the brand owner. The advance fee is usually deducted from the minimum guaranteed amount, and the licensee usually does not pay a royalty until it has sold enough to recover its advance fee payment.

For example, let’s say you signed a licensing deal with Company Z to make clothes featuring your property. If the deal terms are a $5,000 minimum guarantee with a $1,000 advance, a 10 percent royalty, over 3 years, then it means Company Z will pay you $1,000 when the deal is signed, and Company Z guarantees you will earn another $4,000 in royalty revenue by the end of the deal. They will not pay you until royalty revenue has exceeded $1,000 – the advance – and will pay the 10 percent royalty rate on goods sold thereafter. If at the end of the 3 year deal, they have not paid you $5,000 in royalty, then they have to pay you the difference.  

If you are thinking about licensing your brand, it is important to have a licensing agreement in place. At a minimum, you need to address the length of the deal, the royalty rate, and any other payment terms. It’s also important to address where the items can be sold by identifying both distribution channels (brick & mortar stores, online) and territory (U.S., Europe, Canada, etc.), implement an approval process to make sure the use of your brand meets your expectations and requirements, make sure the company licensing your brand agrees to abide by all relevant laws, require the company to indemnify you if an action they take harms you or your brand, and address the reasons for early termination of the agreement. Some of these terms are necessary for business reasons and some are necessary for legal reasons. If you are going to be licensing your brand, make sure you work with someone who understands these types of deals and can walk you through it.

Additionally, if you are signing a deal with a publisher you need to know what rights you are giving up. If a publisher is seeking the ability to license your property to others, be it on posters, apparel, drinkware, board games, or other goods, you need to be aware of it. You need to understand how much you will receive from any deals, and you need to make sure you have some say in the process.

Licensing can be a great way to increase exposure of your brand and to make additional money. It is important to understand how these deals work, and it is also important to make sure you retain some control over your brand if you decide to license it. 

The Messy Origin of the Ghost Rider

            I’ve recently written a few posts on creators attempting to reclaim ownership of the characters they created. I’ve discussed Siegel and Shuster and their attempt to reclaim Superman, Joe Simon and his attempt to reclaim Captain America, and Jack Kirby’s heirs’ attempts to reclaim most of Kirby’s creations for Marvel. Today, I’ll discuss Gary Friedrich’s attempt to reclaim ownership of the Ghost Rider character he developed for Marvel.

            Ghost Rider debuted in April 1972 in Marvel Spotlight No. 5.[1] In the comic book, Gary Friedrich was credited as having conceived and written the story.[2] The character was popular, and Marvel began publishing a Ghost Rider comic book series.[3]

            The story of how the character was created, however, is not easy to discern. In its opinion, the Second Circuit Court of Appeals acknowledges the facts around the character’s creation are heavily disputed.[4] Due to the procedural nature of the case – the lower court found for Marvel on summary judgment – the Second Circuit construed the facts “in the light most favorable to Friedrich, with all reasonable inferences drawn in his favor.”[5]

            Friedrich was working as a freelance comic book writer when he decided to pitch Marvel a character he had been developing over the years, the basics of which form the core of the Ghost Rider character.[6] Marvel agreed to publish the character in exchange for Friedrich assigning his rights in the character to the company.[7] At the time this transaction took place, there was not a written agreement.[8] Friedrich did not sign a work-for-hire agreement until 1978.[9]

            The 1909 Copyright Act applied to the creation of Spotlight No. 5, and the original copyright term for the work ended in 2000.[10] In 2005 or 2006, Friedrich learned he may have renewal rights in the Ghost Rider character and filed “a Renewal Copyright Registration in Spotlight 5 and Ghost Rider in February 2007.”[11] His company sued Marvel shortly afterwards.[12]

            In 2010, Marvel filed their answer in the lawsuit claiming Ghost Rider was made as a work-for-hire, and they filed a counterclaim against Friedrich for copyright infringement.[13] On summary judgment, the lower court found Friedrich’s signing of the 1978 agreement had conveyed all of his remaining rights to Marvel.[14] The lower court awarded damages to Marvel for Friedrich's copyright infringement, and it ordered him to stop using the Ghost Rider copyright.[15]

            On appeal, the second circuit overturned the lower court’s decision. It found the 1978 agreement did not convey any renewal rights Friedrich may have had in the Ghost Rider character, and it could not retroactively declare Ghost Rider a work-made-for-hire.[16] Additionally, the facts surrounding the creation of Ghost Rider were in dispute, which prevented the appellate court from deciding the issue.[17]

            Friedrich asked the court to reconsider his claim for summary judgment that he is the creator of Ghost Rider.[18] Applying the facts most favorably to Marvel, the court found the facts to be heavily disputed, and the facts presented by Marvel support an account of Ghost Rider contradictory to Friedrich’s.[19] Marvel’s version of events would show Friedrich had an uncopyrightable idea he presented to Marvel that was subsequently and collaboratively created by the contributions of Friedrich, Stan Lee, Roy Thomas (then-publisher of Marvel), and Mike Ploog (original artist) to Ghost Rider’s origins and appearance.[20]  

            The court sent the case back to the lower court for trial.[21] Three months later, Marvel and Friedrich settled the case.[22]

            This is a messy case, but there are two important lessons to be learned from it. First, if you don’t have a signed agreement addressing copyright ownership, you are asking for trouble. If Marvel had the appropriate contracts in place when the work was created, the whole situation would have been avoided. Second, it’s important to know your rights. Friedrich could have lost this case because he was unaware of copyright renewal rights and how they might apply to him. Fortunately for him, the appellate court revived his chances of proving himself at trial, which ultimately led to a settlement. 

---

[1] Gary Friedrich Enters., LLC v. Marvel Characters, Inc., 716 F.3d 302, 309 (2nd Cir. 2013).

[2] Id.

[3] Id.

[4] Id. at 308.

[5] Id.

[6] Id.

[7] Id.

[8] Id.

[9] Id.

[10] Id. at 310.

[11] Id. at 311.

[12] Id.

[13] Id.

[14] Id.

[15] Id. at 311-12.

[16] Id. at 314-16.

[17] Id. at 316.

[18] Id. at 320.

[19] Id. at 321.

[20] Id.

[21] Id.

[22] Eriq Gardner, Marvel Settles Lawsuit with ‘Ghost Rider’ Creator, Sept. 9, 2013, HollywoodReporter.com,  http://www.hollywoodreporter.com/thr-esq/marvel-settles-lawsuit-ghost-rider-624609 (last visited May 2, 2017).