Legal Victory Overturned Against "Ghost Rider" by "Marvel"

The 2nd Circuit remands for trial the issue of who holds rights to the popular comic book character.

Comic book author Gary Friedrich has kept alive his long-running case against Marvel over rights to Ghost Rider.

Friedrich introduced Ghost Rider's origin story in 1972′s Marvel Spotlight #5, and mostly disappeared from the comic world in the late 1970s due to reported bouts of alcoholism. But a decade ago, he heard about a planned movie version of Ghost Rider -- a motorcycle-riding superhero with supernatural powers and a flaming skull for a head -- and asserted that he still controlled rights to what has been over the years one of Marvel's most successful comic book franchises.

In late 2011, after a movie starring Nicolas Cage had come out, a federal judge ruled that Friedrich had handed over rights to Marvel in contracts as a freelancer working for the studio in the 1970s.

On Tuesday, the Second Circuit Court of Appeals vacated that ruling, saying that the judge had erred in granting summary judgment and that the contracts that Friedrich signed were "ambiguous" and needed further investigation at trial. Here's the full ruling.

Like many contributors to Marvel's stable, Friedrich worked under the so-called "Marvel Method" of creation, and in this dispute, Marvel asserted that the Ghost Rider characters and story were created through a collaborative process with Marvel personnel and resources.

At primary issue in this case is who controls the renewal term of the Ghost Rider copyright. Copyright law confers multiple terms -- an initial term of 28 years and a renewal term of 67 years. When Congress enacted changes to copyright law in the mid-'70s, the purpose of the renewal term was to "provide authors a second opportunity to obtain remuneration for their works" and "to renegotiate the terms of the grant once the value of the work has been tested."

After learning that copyright law allowed a renewal of the term to vest with the original author, Friedrich filed for, and received, a renewal and copyright registration for his work in Spotlight #5, and then sued Marvel and their licensees for copyright infringement and other claims.

At the District Court level, a judge ruled that Friedrich's 1978 agreement with Marvel where he agreed to grant "to Marvel forever all rights of any kind and nature in and to the Work" precluded Friedrich's claims over ownership, as he had given up the renewal term.

But 2nd Circuit appellate judge Denny Chin says not so fast, saying that the 1978 contract "is ambiguous on its face," pointing to a sentence that defined the work as "ungrammatical and awkwardly phrased" and unclear "whether it covered a work published six years earlier" and "whether it conveys renewal rights."

"The contract contains no explicit reference to renewal rights and most of the language merely tracks the 1976 Act's definition of 'work made for hire,'" writes Judge Chin. "The Agreement could reasonably be construed as a form work-for-hire contract having nothing to do with renewal rights."

As the judge notes, there is a strong presumption against the conveyance of renewal rights, and in this decision, Judge Chin goes out of his way to give Friedrich the benefit of the doubt. At the time of the 1978 deal, the appeals judge says:

                           "Spotlight 5 had been published six years earlier by a different corporate entity (Magazine Mgmt.) and had grown so popular that Marvel had already reprinted it once and had launched a separate Ghost Rider comic book series. Given that context, it is doubtful the parties intended to convey rights in the valuable Ghost Rider copyright without explicitly referencing it. It is more likely that the Agreement only covered ongoing or future work. Hence, there is a genuine dispute regarding the parties' intent for this form contract to cover Ghost Rider."

The judge adds that when Friedrich made his deal with Marvel in 1978, he could have entered into an "employee for hire" relationship, but not necessarily one that rendered Ghost Rider as a "work made for hire" ex post facto.

Marvel also argued that Friedrich's claims were barred by the statute of limitations because it had repudiated his ownership claims long before the comic book writer had brought his lawsuit. Marvel also pointed to widely circulated news reports about a movie that allegedly implicitly repudiated Friedrich's ownership claims. The Second Circuit says it is too soon to give Marvel these points, but the statute of limitations does appear to be an issue that will be addressed now that the dispute has been remanded back down to the trial court for more consideration.

In today's ruling, the appeals court also has to consider whether the trial judge erred by denying Friedrich's own motion for summary judgment that he is the unquestionable author of Ghost Rider.

Hinting at where this case is going next, Judge Chin writes, "When construed in Marvel's favor, the record reveals that Friedrich had nothing more than an uncopyrightable idea for a motorcycle-riding character when he presented it to Marvel because he had not yet fixed the idea into a tangible medium."

The judge adds that a jury could reasonably conclude that artists and others at Marvel at the time developed Ghost Rider through collaborative efforts, which would indeed make it a "work made for hire" and Marvel, the sole statutory author.

But that will be decided at trial, assuming there's no settlement or some unexpected twist.

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