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In 1938, Jerry Siegel and Joe Shuster gave away the copyright to Superman to Detective Comics, Inc., the predecessor of DC Comics. In 1948, National Comics (another predecessor) settled ownership and royalties disputes and paid $94,013.16 for Superman and Superboy rights. In 1969, a court ruled that Siegel and Shuster's grant of copyright included their renewal rights. Shuster died in 1992 and his heirs re-granted their rights for a $25,000 annual stipend. In 2001, the Siegel heirs took back their rights using the termination provision of the Copyright Act of 1976 and accepted a new purchase offer from Warner.
Later in 2001, the heirs tried to reclaim their rights after Marc Toberoff made a better offer. The Central District court of California ruled in 2008 that the Siegel heirs can cancel the Warner purchase, but this was overturned in 2012 on appeal to the 9th circuit. Thus, DC Comics currently holds the copyright to Superman.
National Allied Publications was founded in 1934 by Malcolm Wheeler-Nicholson. Due to financial difficulties, Wheeler-Nicholson formed a corporation with Harry Donenfeld and Jack Liebowitz called Detective Comics, Inc. In January 1938, Wheeler-Nicholson sold his stake in National Allied Publications and Detective Comics to Donenfeld and Liebowitz as part of a bankruptcy settlement. On September 30, 1946, these two companies merged to become National Comics Publications.[1] On June 29, 1961, the company became known as National Periodical Publications. In 1967 National Periodical Publications was purchased by Kinney National Company, which later purchased Warner Bros.-Seven Arts and became Warner Communications. In 1976, National Periodical Publications changed its name to DC Comics. Since 1940, the publisher had placed a logo with the initials "DC" (as in "Detective Comics") on all its magazine covers, and consequently "DC Comics" became an informal name for the publisher.[2]
In 1933, writer Jerry Siegel and artist Joe Shuster conceived the fictional comic strip character Superman. For the next five years, they tried selling Superman to various newspaper syndicates, with no success.
In 1935, Siegel and Shuster began working for New York comic magazine publisher National Allied Publications, producing detective and adventure stories. They refused, however, to sell Superman, their prize creation, to National Allied because it was a poorly-managed business.[6]
On December 4, 1937, Siegel and Shuster signed an employment contract with Detective Comics, Inc. (an affiliate of National Allied Publications) that gave Detective Comics, Inc. the right of first refusal over any comic material they produced for the next two years, and stipulated a pay rate of $10 per page.
The Employer hereby agrees to employ, and does hereby employ the Employees as Artists, for a period of two years, commencing with December 4, 1937 and terminating December 3, 1939, and pay them for such services and for all of the matters hereinafter set forth, the sum of Ten Dollars ($10) per page. [...] It is understood that any new and additional features which the Employees produce for use in a comic magazine are to be first submitted to the Employer, who reserves the right to accept or reject same within a period of Sixty days.
In January 1938, Detective Comics, Inc. offered to publish Superman. Siegel and Shuster by now had given up on the newspapers and agreed to sell Superman to Detective Comics, Inc. They produced 13 pages of comic stories, which they submitted to Detective Comics, Inc. in late February. In March, they signed a contract in which they released the copyright for Superman to Detective Comics, Inc.[7] The contract for the sale, signed in March 1938, read:
In consideration of $130.00 agreed to be paid me by you, I hereby sell and transfer such work and strip, all good will attached thereto and exclusive right to the use of the characters and story, continuity and title of strip contained therein, to you and your assigns to have and hold forever and to be your exclusive property and I agree not to employ said characters by their names contained therein or under any other names at any time hereafter to any other person firm or corporation, or permit the use thereof by said other parties without obtaining your written consent therefor. The intent hereof is to give you exclusive right to use and acknowledge that you own said characters or story and the use thereof, exclusively. I have received the above sum of money.
On September 22, 1938, Siegel and Shuster signed a 10-year contract with Detective Comics wherein they agreed to give Detective right of first refusal with a duration of six weeks over any comics stories they created for the next five years.
In the event you shall do or make any other art work or continuity suitable for use as comics or comic strips, you shall first give us the right of first refusal thereof by submitting said copy and continuity ideas to us. We shall have the right to exercise that option for six weeks after submission to us at a price no greater than offered to you by any other party.
On December 19, 1939, Siegel and Shuster signed a contract which increased their pay rate to $20 per page and promised them 5% of net proceeds from any commercial exploitation of Superman beyond magazines, books, and newspapers.[12]
In November 1938, Siegel proposed to Detective Comics that he do stories of Superman's childhood adventures, with the character calling himself "Superboy". Detective rejected Siegel's pitch.[13] In December 1940, Siegel pitched the idea again with a complete script for the first story, but Detective did not respond within the contractual six weeks.[13]
Siegel served in the US Army from June 1943 to January 1946,[14] and spent most of his service in Hawaii. During this time, his work was taken over by ghostwriters, but Siegel was still paid for each strip.[15] Shuster was also paid for work done by ghost-artists.[16]
In 1944, while Siegel was serving in Hawaii, Detective Comics published a Superboy story in More Fun Comics #101. The story was partially based on the script Siegel had submitted in 1940, and was illustrated by Shuster.[17] Detective had done this without informing Siegel; he learned about it in a letter from Shuster.
In 1947, Siegel and Shuster sued National Comics Publications for the rights to both Superman and Superboy and a "just share" of all profits that National and its partners made off the character. The suit was filed with the Supreme Court of the State of New York, in Westchester County.[18] The case was presided over by Judge J. Addison Young.
Siegel and Shuster argued that the March 1, 1938 contract in which they sold Superman to Detective Comics, Inc. should be voided because it lacked sufficient consideration for Siegel and Shuster. Judge Young ruled that the $130 mentioned in the contract was not payment for the copyright to Superman but their wages for the thirteen pages of Superman stories they made for Action Comics #1. Young referred to their December 4, 1937 employment contract, which gave Detective Comics, Inc. the right of first refusal over any comic magazine material Siegel and Shuster produced, and which stipulated a pay rate of $10 per page. The $130 mentioned in the March 1, 1938 contract was therefore a superfluous assessment of their wages which were already owed, and not payment for the copyright to Superman.
It is quite apparent that the $130.00 which is the recited consideration in said instrument was already due and owing the plaintiffs before the instrument was executed. It was therefore past consideration and insufficient to support Plaintiffs' Ex. 11. [...] The terms of the contract of December 4th, 1937, though primarily relating to the features specified therein, also related to future dealings between plaintiffs and Detective Comics as to other features and as to these other features Detective Comics, Inc. were given a first option to accept or reject them. In effect, therefore, the instrument of March 1st, 1938 represented the exercise by Detective Comics of the option granted to it by the December 4th, 1937 agreement. It is therefore argued that the specific mention of $130.00 as a consideration in the March 1st, 1938 instrument was superfluous and unnecessary to its validity so far as the element of consideration is concerned...
...the plaintiffs' desire to see Superman in print and the realization of that desire by Detective Comics' acceptance of the strip for publication and actually publishing it were the most vital elements of the consideration supporting the instrument date March 1st, 1938.
Siegel and Shuster also argued that the March 1938 contract lacked mutuality, saying that at the time Superman was an idea not fully developed and thus there was no clear concept on what was being sold. Judge Young disagreed, and concluded that the strips that appeared in Action Comics #1 were based on a fully developed concept that Siegel and Shuster submitted before March 1938, and this is what Detective Comics, Inc. had purchased in the contract.
...the fact stands out that the first Superman release had been delivered for publication prior to March 1st, 1938 and this release certainly contained a full delineation of the character Superman and though the story or continuity might vary from time to time, it did I believe constitute a formula for the continuing series to come and in my opinion this was assignable and was purchased by the defendant.
National argued that Superboy was a work made for hire, but Judge Young rejected this argument because Detective Comics, Inc., on both occasions Siegel proposed his idea, had not indicated within six weeks of submission that it wished to publish Superboy, thereby effectively refusing it under the terms of their September 1938 contract.
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