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Cat and Mouse: Josie and the Pussycats Creator Challenges Copyright Ownership

by Michael L. Lovitz

Summer 2001, Vol. 64, No. 2

The question of ownership of one's creativity has once again been placed in the legal spotlight, this time with a comic book basis and a Hollywood twist. Increasingly over the past few years, ownership controversies have been popping up in the comic book industry, involving characters such as Captain America, Green Lantern and Blade. Even Superman has not been immune to the issue of creator ownership.

The latest chapter in the rights of comic book artists and writers involves the character Josie and her friends Melody and Pepper, otherwise know as the Pussycats. Dan DeCarlo, a comic book artist since the 1940s, sued his (now former) employer Archie Comic Publications, Inc. (ACP) over the ownership of these characters, and with that ownership, the exclusive right to license them and control their commercialization.

On January 22, 2001, Judge Lewis A. Kaplan of the Southern District of New York ruled against DeCarlo, granting ACP's motion for a summary judgment dismissing the case. The ruling has been appealed to the Second Circuit.

In his complaint, DeCarlo claims that he created a comic strip featuring the teenage Josie (named after his wife who was the inspiration for the character) and her musical girl group while working as a freelancer in the late 1950s. DeCarlo also claimed that the cat outfits worn by the girls were modeled on one that his wife had worn to a costume party. He claims to have shown the strip later, in 1961, to ACP, which decided to publish the strip as a comic book titled She's Josie. It was later re-titled Josie, and eventually Josie and the Pussycats. ACP disputes DeCarlo's ownership claim, as well as his claim of independent creation of the characters, claiming instead that ACP had wanted a female version of Archie and had commissioned DeCarlo to draw her. ACP printed its claim of copyright ownership in the first issue, and all subsequent issues, of the comic book series.

During the years he worked on the comic book title, DeCarlo was paid a page rate for the Josie comic books he drew. From June 1966 until October 1969, DeCarlo was also paid a five percent royalty on the comic books.

In 1970, ACP licensed Josie to Hanna-Barbera for a Saturday morning cartoon and did so without consulting or involving DeCarlo. The show was broadcast on CBS from 1970 to 1974, and although DeCarlo felt ACP was "making a fortune" from the cartoon and other licensing of the characters, he neither requested nor received any additional compensation. Even when ACP licensed the release of videocassettes of the cartoon and the show was aired on the Cartoon Network, DeCarlo raised no objections or asserted any claim of ownership. DeCarlo continued to work for ACP through 2000, eventually becoming chief artist at ACP.

In 1988, DeCarlo and ACP entered into an agreement titled a Newsstand Comic Independent Contractor's Agreement concerning comic strips and comic books published by ACP, including the Josie and the Pussycats title. This agreement contained language whereby DeCarlo assigned to ACP all of his rights, title and interest in works submitted to ACP and agreed to work with ACP on a work-for-hire basis. Further, to the extent any of DeCarlo's work is deemed not to be work-for-hire, the agreement assigned all rights in any such work to ACP.

In 1996, the parties entered into another agreement, this one a Work for Hire Agreement. The 1996 agreement again included language confirming that DeCarlo was assigning to ACP all rights, title and interest in and to any of his contributions (past, pending or future ) to any ACP "properties" not otherwise deemed works-made-for-hire. "Properties" was defined to include any characters, artwork, stories, plots, trademarks, logos and other creative expressions.

Recently, ACP licensed the motion picture rights in Josie and the Pussycats to Universal City Studios. It was after the motion picture deal had been signed that DeCarlo brought his suit in New York state court. The action was removed to federal court, prompting the filing by DeCarlo of a motion to remand the case to the state court and ACP's filing of a motion for summary judgment dismissing the complaint.

Copyright Protection
In ruling in favor of ACP, the Court addressed two primary issues. The first issue was the issue of federal subject matter jurisdiction. DeCarlo argued that the complaint did not invoke the Copyright Act and claimed that he owned the Josie characters by virtue of state law. Specifically, DeCarlo contended that comic strip characters are not susceptible to federal copyright protection.

The Court disagreed, finding that, although the copyright of literary characters presents troublesome questions, "there has been no doubt that copyright protection is available for characters portrayed in cartoons . . . because the difficulties of distinguishing distinct attributes of a literary character from its embodiment of more general ideas and themes do not arise . . . with visual images." The Court further noted, quoting from the Ninth Circuit's decision in Walt Disney Products v. Air Pirates, "While many literary characters may embody little more than a protected idea, a comic book character, which has physical as well as conceptual qualities, is more likely to contain some unique elements of expression." Accordingly, DeCarlo's request for remand to state court was denied.

Ownership
The second issue addressed by the Court was DeCarlo's claim of ownership in the Josie and the Pussycats property and the characters featured therein. DeCarlo claims that his original sketches from which the comic strip was derived constituted the underlying work upon which the Josie comic book series was derived and that he therefore owns the characters as the creator of those sketches. ACP disputes DeCarlo's claim and the origins of those design sketches.

The Court did not address the issue of the origination of the Josie characters, relying instead on DeCarlo's delay in bringing his suit as grounds for dismissing the claims. Specifically, because DeCarlo was aware of ACP's claim of ownership in Josie since 1963, his claim was barred under the statue of limitations for failure to bring the action within three years after the claim accrued, as required under Section 507(b) of the Copyright Act. The Court also found that DeCarlo was equitably estopped from claiming that ACP had violated his rights in the Josie property and characters, whether the claims were couched in terms of copyright, contract or any other legal theory.

Work-For-Hire
Although not addressed by the Court, the circumstances surrounding the creation of a comic book property such as Josie is critical to the issue of ownership of that property. Specifically, it is the "work made for hire" provision in the Copyright Act that is of greatest interest to comic book creators and of greatest concern to comic book publishers. Whether a work is a "work for hire" impacts on the ownership of that work, not only now but also in the future.

The Copyright Act establishes a bundle of rights that may be exercised by the owner of a copyright in a work. The author of the work is deemed the owner of those rights initially, although the rights can be transferred, in whole or in part, at any time such as through license or assignment. The Copyright Act provides the original author the right to revoke a transfer of ownership at a time in the future, under certain circumstances. Under the "work made for hire" doctrine, it is the employer (or hiring party) that is deemed to be the author and owner of all rights in the work created by the employee (or independent contractor). For independent contractors, the parties must intend that the work be a "work made for hire," agree to the same in writing, and the work must fall within one of a limited number of categories of works.

Virtually every major comic book publisher engages creators as independent contractors preparing works that are deemed to be "works made for hire." As in the 1996 agreement between DeCarlo and ACP, creators are asked to sign work-for-hire agreements that contain language assigning rights in the event the work does not qualify as a work for hire. This is important to the publishers, as comic books do not necessarily fall within the "work made for hire" categories specifically delineated in the Copyright Act.

Thus, if ACP can prove its claim, the original design work done by DeCarlo would be deemed "work made for hire" (under the 1909 Act), as confirmed by the 1988 and 1996 agreements signed by DeCarlo.

However, should DeCarlo establish that he created the Josie characters and then brought them to ACP, he would be the author and would initially have been the owner of the copyright rights in the characters and designs. His rights may have been transferred to ACP subsequent to creating the work, but he would still be deemed the author and initial owner of those rights.

As a result, it would be possible under the terms of the Copyright Act for DeCarlo to terminate the transfer of ownership at a time in the future. Specifically, the Copyright Act provides for the termination of transfers in ownership by the original author (or the author's heirs) during a five-year window. This right of termination is not available in the case of work-made-for-hire, as under that doctrine the employer is considered the original author (and current copyright owner), not the actual creator of the work.

To effect termination, the original author need only file notice of the termination with the Copyright Office and the current owner of the copyright. The original author can provide notice up to five years in advance of the termination period; however, notice must be received no less than two years from the requested date of termination. The timing of the termination window depends on when the work was published and when the rights were transferred. For works created prior to 1978 (such as the original designs for Josie and the first issue of the comic book), termination may be effected for the five-year period beginning at the end of fifty-six years from the date copyright was secured. Similarly, for those works whose copyright term was extended by the 1998 amendments to the Copyright Act, termination can be effected for five years starting at seventy-five years from the date copyright was secured.

For DeCarlo, the good news is that even if his appeal fails, he may still have a chance to win back his darling Josie at some time in the future. The bad news is that his heirs may have to be the ones to wage that battle.

Update
On May 3, 2001, Judge Kaplan issued a ruling in a second action involving DeCarlo and ACP, this time concerning the creation and ownership of Sabrina the Teenage Witch. DeCarlo claimed that he created "the physical appearance, mannerisms, personality and 'look' of Sabrina and her supporting characters. Sabrina subsequently appeared in an issue of Archie's Madhouse and, in 1971, gained her own series. DeCarlo requested relief on the grounds that ACP "wrongfully transferred control" over DeCarlo's "property" in the characters under New York state law. Judge Kaplan found that the rights DeCarlo claimed under state law, and DeCarlo's claims for relief, fall within the Copyright Act and were federally preempted. "In view of the Josie decision, there is no basis for DeCarlo's contention that he has any ownership rights in the Sabrina comic strips or characters except to the extent, if any, that he owns such rights under the Copyright Act," The judge wrote. Judge Kaplan dismissed DeCarlo's counterclaims in all respects, finding again that there is no basis for DeCarlo's contention that he has any ownership rights in the Sabrina comic strips or characters.