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by Vault Law Editors | March 22, 2006

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When Disney acquired Marvel last year, it was hailed as a deal that “redraws the architecture of Hollywood.”  At the time, Carl Sanchez, the Paul Hastings partner who led the M&A team on behalf of Marvel, singled out for special praise the Paul Hastings IP team for reviewing the documents for every one of the 5,000 Marvel characters to determine the transferability of rights to Disney.  In light of yesterday’s NY Times piece on the legal battle between the heirs of Jack Kirby and Disney and Marvel, one wonders how large a role the prospect of copyright termination actions played in their analysis. 

Representing the Kirby heirs is Marc Toberoff, who is employing a provision in copyright law that potentially gives heirs the right to regain ownership of a product after a given number of years.  At stake are the massive proceeds of Kirby-created superhero franchises, including Spider Man and the Incredible Hulk.  In response to the heirs’ filing of notices to terminate 45 of the copyrights, Marvel has gone on offense, filing a lawsuit to invalidate the notices. Weil Gotshal partner James Quinn is leading the charge against the Kirby family.

The Marvel case hinges on whether Kirby produced his work as a freelancer or as an employee of Marvel.  The Copyright Revision Act of 1976, which established the sort of termination action that Kirbys are pursuing, bans termination for people who delivered work at the “instance and expense” of an employer.

The Times characterizes the dispute as “emblematic of a much larger conflict between intellectual property lawyers and media companies that … have made themselves vulnerable by building franchises atop old creations. So-called branded  … may be easier to sell to audiences, but the intellectual property may also ultimately belong in full or in part to others.”

According to Stanford law professor Paul Goldstein, Toberoff is doing some pioneering work in this area: “Any young lawyer starting out today could turn what he’s doing into a real profit center.”

                                                                                     -posted by brian

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