Marvel Characters, Inc v. Kirby

726 F.3d 119 (2nd Cir. 2013)

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Nature of the Case

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Facts

Jack Kirby's career in comic book illustration spanned more than half a century. His influence was substantial. In 1951 alone, 308 pages of Kirby's work appeared in published comic books. That was a typical year for Kirby. It is undisputed that Kirby was a freelancer. He did not receive benefits and was not reimbursed for expenses or overhead in creating his drawings. He set his own hours and worked from his home. When drawings were accepted, Kirby was paid by check at a per-page rate. In 1940, P purchased the first ten issues of Captain America from Kirby and Joe Simon. Kirby and Simon would soon move on to a competitor, DC Comics. To replace them, P hired Stanley Lieber. Lieber would come to be known by his pen name, Stan Lee. In 1958, Kirby began producing drawings for P once again. And by 1961, P's fortunes began to change. That year, Marvel released the first issues of The Fantastic Four. On its heels were releases of the first issues of some of Pl's most enduring and profitable titles, including The Incredible Hulk, The X-Men, and Spider-Man. This litigation concerns the property rights in 262 works published by P between 1958 and 1963. It is beyond dispute that Kirby made many of the creative contributions, often thinking up and drawing characters on his own, influencing plotting, or pitching fresh ideas. In September 2009, Ds served various P entities with documents entitled 'Notice of Termination of Transfer Covering Extended Renewal Term' (Termination Notices). The Termination Notices purport to exercise statutory termination rights under section 304(c)(2) of the Copyright Act of 1976 with respect to 262 works in all. Each notice states an effective date sometime in the future, presumably between 2014 and 2019. The effective dates are calculated according to section 304(c)'s timing provision, which states in relevant part that 'termination . . . may be effected at any time during a period of five years beginning at the end of fifty-six years from the date copyright was originally secured . . . .' P filed this lawsuit on January 8, 2010, seeking a declaration that Ds have no termination rights under section 304(c)(2). P claims that all of the works were 'made for hire' by Jack Kirby for Marvel within the definition of section 304(c). Ds filed a motion to dismiss the complaint. Lisa and Neal Kirby, residents of California, sought dismissal on the ground that they were not subject to personal jurisdiction in New York State. Susan and Barbara Kirby, are residents of New York and do not contest personal jurisdiction. Ds argued that Lisa and Neal are indispensable to the action under Fed. R. Civ. P. 19, and that P's entire suit must therefore be dismissed as against all parties. The district court denied the motion. It concluded that it had personal jurisdiction over Lisa and Neal under New York's long-arm statute and that the exercise of this jurisdiction was consistent with constitutional due process. It never addressed indispensability. In early 2011, after discovery was complete, the parties cross-moved for summary judgment. The court relied upon case law applying the so-called 'instance and expense test' to determine whether a work is 'made for hire' under section 304(c). The court concluded that undisputed facts in the record establish as a matter of law that the works at issue were made at P's instance and expense, and were, therefore, works made for hire. Ds appealed.