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MARVEL CHARACTERS, INC. v. SIMON
310 F.3d 280 (2002)
United States Court of Appeals, Second Circuit.
Argued: June 3, 2002.
In sum, we hold that an agreement made subsequent to a work's creation which retroactively deems it a "work for hire" constitutes an "agreement to the contrary" under § 304(c)(5) of the 1976 Act. Therefore, Simon is not bound by the statement in the Settlement Agreement that he created the Works as an employee for hire. Because Simon has proffered admissible evidence that he did not create the Works as an employee for hire, the district court's grant of summary judgment to Marvel was erroneous. It will be up to a jury to determine whether Simon was the author of the Works and, therefore, whether he can exercise § 304(c)'s termination right. See, e.g., Medforms, Inc. v. Healthcare Mgmt. Solutions, Inc.,290 F.3d 98, 110 (2d Cir.2002) (noting that authorship is a jury question). IV.Equitable Estoppel Marvel's final contention is that Simon is barred by the doctrine of equitable estoppel from asserting that he is the author of the Works. Marvel argues that if it knew that Simon would disavow the Settlement Agreement's admission that the Works were created for hire, it would have proceeded to trial in the Prior Actions and called both Martin Goodman and Jack Kirby as witnesses. As these two men have since died, Marvel contends that Simon should not now be able to raise the issue of his authorship of the Works in this action. We find Marvel's argument unpersuasive. The doctrine of equitable estoppel can be raised "where the enforcement of the rights of one party would work an injustice upon the other party due to the latter's justifiable reliance upon the former's words or conduct." Kosakow v. New Rochelle Radiology Assocs., P.C.,274 F.3d 706, 725 (2d Cir.2001). Under federal law, applicable because Marvel's claim involves a federal statute, a party can be estopped from pursuing a claim where: (1) the party makes a misrepresentation of fact to another party with reason to believe that the other party will rely on it; (2) the other party relies on the misrepresentation to his detriment. See id. Marvel's estoppel argument is unpersuasive for three reasons. First, the doctrine of equitable estoppel does not supersede § 304(c). It is plain that § 304(c) necessarily contemplates the likelihood that long-dormant copyright ownership issues will be awakened and litigated once the original fifty-six year copyright term expires. In fact, Congress's goal in providing authors with this termination right was to enable them to reclaim long lost copyright grants. As the district court correctly recognized, virtually every copyright holder could fashion a similar equitable estoppel argument in response to an author's legitimate exercise of his termination rights. See Marvel Characters, Inc., 2002 WL 313865, at *4. Permitting such an exception, however, would contravene the plain language, intent, and purpose of § 304(c). Second, Marvel's argument ignores the fact that the termination right did not come into existence until 1978, the effective date of the 1976 Act. Therefore, it is specious to argue that Simon should be estopped from raising a claim that did not come into existence until almost a decade after the Settlement Agreement. Finally, Marvel cannot establish detriment for equitable estoppel purposes. Marvel has received the full economic benefit of the Works' twenty-eight year renewal term. Even if a jury concludes that Simon is the Works' author and can therefore
terminate Marvel's copyright in the Works, Marvel can continue to exploit every Captain America property created prior to the effective date of termination. See Mills Music, 469 U.S. at 173, 105 S.Ct. 638 (noting that pre-termination derivative works may continue to be utilized under the terms of the terminated grant).
* The Honorable Charles S. Haight, Jr., United States District Judge for the Southern District of New York, sitting by designation.
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