United States District Court, Southern District of New York
March 31, 2003
ARCHIE COMIC PUBLICATIONS, INC., PLAINTIFF,
JOSETTE DUMONT DECARLO, EXECUTRIX OF THE ESTATE OF DANIEL S. DECARLO, DEFENDANT.
The opinion of the court was delivered by: Lewis A. Kaplan, United States District Judge
Plaintiff Archie Comic Publications, Inc. ("ACP") is a publisher of comic books including the well-known Archie, Josie, Sabrina the Teenage Witch, and Cheryl Blossom publications. The late Daniel S. DeCarlo was a comic book artist who did freelance work for ACP beginning in the early 1950s, contributed to the Josie, Sabrina and Cheryl Blossom properties, and in recent years began claiming ownership rights in those properties. ACP seeks declaratory and injunctive relief, essentially to quiet its title to these properties against recent claims by DeCarlo's estate.
The matter now is before the Court on plaintiff's motion for summary judgment on its first through fifth claims for relief.*fn1
A. Defendant's Failure to Comply With Local Civ.R. 56.1
There is a preliminary matter that must be addressed before getting to the pertinent facts.
On a motion for summary judgment, the moving party bears the burden of demonstrating that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law.*fn2 In considering such a motion, all facts and inferences reasonably drawn therefrom are construed in favor of the nonmoving party.*fn3
Local Civil Rule 56.1 of this Court, which is substantially similar to antecedents that have been in effect for many years, provides in relevant part as follows:
"(a) Upon any motion for summary judgment . . ., there
shall be annexed to the notice of motion a separate,
short and concise statement of the material facts as
to which the moving party contends there is no genuine
issue to be tried. Failure to submit such a statement
may constitute grounds for denial of the motion.
"(b) The papers opposing a motion for summary judgment
shall include a separate, short and concise statement
of the material facts as to which it is contended that
there exists a genuine issue to be tried.
"(c) All material facts set forth in the statement
required to be served by the moving party will be
deemed to be admitted unless controverted by the
statement required to be served by the opposing
"(d) Each statement of material fact by a movant or
opponent must be followed by citation to evidence
which would be admissible, set forth as required by
Federal Rule of Civil Procedure 56(e)."
The purpose of the rule "is to assist the Court in understanding the scope of the summary judgment motion by highlighting those facts which the parties contend are in dispute."*fn4
In the absence of the required statements, "the Court is forced to scour the record on its own in a search for evidence which may support that party's contention that a certain fact is not in dispute."*fn5
In order for a Rule 56.1 statement in opposition to a motion for summary judgment to serve this purpose, it must respond appropriately to the movant's statement. Thus, "[a] proper Rule 56.1 statement submitted by a non-movant should consist of a paragraph-by-paragraph response to the movant's 56.1 statement, much like an answer to a complaint" and must cite admissible evidence in support of the non-movant's contention that there is admissible evidence creating a genuine issue for trial.*fn6 And while it "is permissible for the non-movant to provide a separate statement, apart from this paragraph-by-paragraph response, in which it lists other facts it claims to be in dispute . . . [,] this separate statement is not a substitute for the paragraph-by-paragraph response. The non-movant, particularly if represented by counsel, should not leave it to the Court to cull from this separate statement the pieces of evidence which would support the contentions of the non-movant asserted in its paragraph-by-paragraph response without citation."*fn7
Defendant has ignored these requirements. Plaintiff submitted a detailed, 238-paragraph Rule 56.1 statement, each and every paragraph containing citations to the evidence upon which plaintiff relies for the asserted proposition. Defendant's responding statement, however, leaves the Court at sea as to the basis for defendant's contentions that there are genuine issues of material fact.
The section of defendant's Rule 56.1 statement that responds to ACP's statement contains three parts. The first lists the numbers of the paragraphs of ACP's statement that plaintiff does not dispute, which is entirely appropriate. The second is a list of 109 paragraph numbers which defendant disputes "on the grounds that they are variously inaccurate, misleading, irrelevant, hearsay, argumentative and/or incomplete."*fn8 It is utterly unsupported by any citations to the record, instead referring the Court to all of the transcripts and other sources cited by ACP "for an accurate presentation of the facts" although it must be noted that defendant's Rule 56.1 statement contains also a section, not directly responsive to ACP's statement, in which she asserts that certain enumerated propositions — many of which are conclusions of law and not factual assertions at all*fn9 — are disputed and includes some record citations. The third lists 78 paragraphs which, defendant contends, she cannot admit or deny "because they relate to transactions and discussions conducted out of [DeCarlo's] presence, without any participation, knowledge or consent on his part."*fn10
This response is utterly insufficient.*fn11 To the extent that defendant denies the assertions of plaintiff's Rule 56.1 statement, she has declined to provide citations to the record supporting her claim that certain of the movant's statements of allegedly undisputed facts actually are disputed. She instead has left the Court to "scour the record on its own in a search for evidence . . . that a certain fact is in dispute" and to seek "to cull from [her] separate statement the pieces of evidence which would support the contentions . . . asserted in [her] paragraph-by-paragraph response without citation."*fn12 In substance, the Court is asked "to peruse a haystack looking for needles."*fn13 To the extent she denies the ability to admit or deny those assertions, her response also is insufficient because alleged inability to admit or deny is no excuse, at least in the absence of a sufficent Rule 56(f) affidavit, and none has been submitted here.*fn14
As defendant has not submitted a sufficient Rule 56.1 statement, the facts set forth in ACP's statement are deemed established. In any case, the Court has reviewed the record and finds that the facts set forth below are undisputed, which is not surprising in view of the fact that defendant has submitted in opposition to the motion only two brief declarations by percipient witnesses and one by her attorney. Thus, the result here would be the same even if the Court disregarded entirely the defendant's failure to comply with Rule 56.1.
B. The Josie Property and the Prior Litigation
On March 8, 2000, DeCarlo sued ACP for a declaration that he owned the Josie property, including the related Pepper and Melody characters and, during the pendency of that action, sought in other ways to assert ownership of the Josie property.*fn15 On January 22, 2001, this Court ruled that DeCarlo's ownership claim arose under the Copyright Act, that it was barred by the statute of limitations, and that "DeCarlo is equitably estopped from claiming that ACP has violated his rights in the Josie property and characters, whether those claim are couched in terms of copyright, contract or some other legal theory."*fn16 The decision was affirmed on appeal.*fn17 It therefore is unnecessary to set out the facts upon which it was based, although they are set forth in detail in the Court's prior opinion.*fn18 Nevertheless, DeCarlo has come forward with some new evidence which, he implicitly claims, avoids the issue preclusive effect of the prior decision with respect to equitable estoppel and demonstrates the existence of at least one genuine issue of material fact as to ACP's equitable estoppel theory as it relates to all the properties involved in this case. As the Court rejects this contention below, it is unnecessary to go into the facts concerning the Josie property.
C. The Sabrina Characters
The concept of a teenage witch character was conceived of by current ACP co-owner Richard Goldwater ("Goldwater"), the son of ACP founder John Goldwater, in or before 1962.*fn19 According to Goldwater, he contacted a freelance writer, George Gladir, and asked him to write a story about "an attractive teenage witch."*fn20 Gladir obliged and was paid for the story. According to DeCarlo, this story was laid out in storyboard format like a rough sketch of a comic book story. The dialogue was written in balloons above the heads of stick figures drawn to represent the characters.*fn21 The story written by Gladir contained instructions as to how the story should be illustrated. It contained the character Sabrina (the teenage witch), as well as her "familiar," Salem, and the witch head Della.*fn22
The first Sabrina-related artwork that DeCarlo turned in to Goldwater was published as the "Sabrina the Teen-Age Witch" story contained within Madhouse #22.*fn23 The copyright notice in Madhouse #22 read "Copyright 1962 by Archie Comic Publication, Inc."*fn24 Sabrina stories appeared in ACP's Madhouse comics from July 1962 until August 1969.*fn25 During these years, Sabrina stories were separate from the Archie stories, that is, the characters did not interact and were not depicted as knowing each other.*fn26 Some of the Sabrina stories that were published in Madhouse were illustrated by DeCarlo, but ACP assigned the illustration work for many of them to other artists.*fn27
On September 30, 1969, ACP introduced a new comic book series, Archie's TV Laugh-Out Starring Sabrina the Teen-Age Witch ("Laugh-Out"), that featured various ACP characters that then were appearing on the animated television series being produced by ACP and Filmation Enterprises.*fn28 Unlike the Madhouse stories, the television show featured Sabrina living with her aunts Hilda and Zelda and attending Riverdale High School with the Archie characters.*fn29 In consequence, John Goldwater instructed the artists hired by ACP to draw the Sabrina stories for Laugh-Out that they should feature Sabrina living with her aunts and as a classmate of the Archie characters.*fn30 The first issue of Laugh-Out featured two Sabrina stories, neither of which was illustrated by DeCarlo.*fn31
In 1971, ACP began another new series, this one entitled Sabrina the Teen-Age Witch.*fn32 ACP published Sabrina stories in issues one through seventy seven of this series.*fn33 The "character likenesses" used in this series were "the same as those used in Laugh-Out and the Filmation cartoons."*fn34 DeCarlo was not one of the artists who regularly was assigned stories for the series.*fn35
ACP created several other lines of Sabrina stories and published them in various series of comic books.*fn36 DeCarlo admits that he never wrote any of the Sabrina stories, had no authority to add or drop characters from Sabrina stories, and had no editorial control over the content of the stories.*fn37 He further admits that many artists other than himself were assigned to illustrate Sabrina stories and that he never contested this practice.*fn38
In August 1994, ACP sold Viacom Productions, Inc. ("Viacom") an option on the live action theatrical and television motion picture rights, live action television and mini-series rights, and allied and ancillary rights in the "Sabrina series of characters as they currently appear in the comics published by [ACP], including, without limitation, the characters `Sabrina,' `Aunt Hilda,' and `Aunt Zelda,' together with all content, titles, plots, story-lines, themes, concepts, `look' and all other visual and print materials contained therein (collectively, `the Work')."*fn39 ACP represented and warranted that it was the sole owner of the Work and that it was the sole and exclusive owner of all of the granted rights.
DeCarlo was not consulted in ACP's decision to enter into the agreement with Viacom, but he admits that he knew about the movie and made no attempts to find out what the movie said regarding ownership of the Sabrina properties because he was not "interested in it."*fn40 He explained that "[ACP] did other things before on this same thing and never told me about it, so this is not an exception."*fn41 He learned about the Sabrina live action television series before it was broadcast when, in July 1996, he prepared artwork for the cover of a new Sabrina the Teenage Witch comic book that incorporated a picture of the actress who was to play Sabrina on the series.*fn42 He admits also to watching the premiere of the series.*fn43 DeCarlo took no steps to assert his ownership rights after learning of the television show.*fn44 He further admits that he never asked ACP for a royalty on sales of Sabrina comic books or merchandise.*fn45
As of his deposition on December 8, 2000, DeCarlo had never registered or renewed the copyrights in any works that included any of the Sabrina characters.*fn46
D. The Cheryl Blossom Property
Within the Archie universe, an eternal triangle involving Archie, Betty and Veronica has played itself out since the 1940s.*fn47 In 1982, Cheryl Blossom, "Riverdale's Newest Bombshell" was added to the mix.*fn48 Cheryl and her brother Jason were introduced in an Archie story titled "Dare to be Bare" that was published in Betty and Veronica #320.*fn49 Over the next two years, Cheryl, Jason, their parents and Cheryl's classmates at Pembroke Academy were written into stories that were published in various issues of several of ACP's comic book series.*fn50 Cheryl and her friends were portrayed as private school snobs who looked down on the Archie characters who attended public high school. These characters then disappeared for ten years. They were resurrected in 1994 in a "cross-over" series entitled The Love Showdown. This story found Archie receiving a "mysterious love letter," a letter that prompted Betty and Veronica into a "frenzied battle over him."*fn51
DeCarlo admitted in his deposition that Goldwater approached him with the idea of creating Cheryl and her family. Goldwater explained to DeCarlo that he wanted to create a "real sex symbol," a rich and snobby character, and he asked DeCarlo to draw her and her family.*fn52 DeCarlo drew a model sheet depicting a family as Goldwater had requested, chose the name Cheryl Blossom, and created Jason, Cheryl's twin brother, a girlfriend of Cheryl's and her parents.*fn53 There is some evidence that DeCarlo did the drawings for one or two stories written by another for the Cheryl Blossom family.*fn54 With limited exceptions, ACP has made little use of this property.*fn55
There is some debate as to who drew the first Cheryl Blossom stories. ACP's records indicate that DeCarlo's son, Daniel S. DeCarlo, Jr., was paid for illustrating the stories, although DeCarlo testified at his deposition that he thought the work looked like his own. DeCarlo, Jr., as well as all the other first hand witnesses to the matter, have passed away, making it unlikely that evidence will surface that can shed light on the matter. In the end, though, this is immaterial to the ownership of the copyright in Cheryl Blossom.
E. The Form of Voucher Agreement and Check Endorsements
During this litigation, DeCarlo produced a handwritten document which, he claimed, was a copy of an endorsement from the back of an ACP check made out to him in late 1970:*fn56
"This check is accepted as payment in full for all the
undersigned's right, title and interest in and to the
strip, copy, art, continuity, characters, story or
manuscript entitled or used in (as listed below) and
the undersigned affirms that the maker of this check
and/or its assigns are given the full rights to use
said property for publication, movies, talkies,
radio, television, broadcasting, advertising, or for
any other use. Permission is hereby granted to make
editorial changes. Endorser is the autor [sic] or
accredited agent in this sale and guarentees [sic]
that the work is free from libel or infringement."
In addition, ACP produced (a) a form of voucher agreement used in its art department whereby the artist assigned all of the artist's right, title and interest in a relevant comic strip to ACP in consideration of compensation,*fn57
and (b) copies of the fronts and backs of four cancelled checks, one of which was dated December 17, 1985 and payable to DeCarlo.*fn58
The form of voucher agreement provides in relevant part:
"KNOW ALL MEN, that I, ___ residing at ___ in
consideration of the sum of $1.00 (One Dollar) paid by
___ . . ., herein called "the Assignee", hereby sell,
assign, and transfer to the assignee all my right,
title and interest in and to the name, title, trade
mark and comic strip, including the character or
characters portrayed therein, entitled ___ together
with the world copyrights therein, and in all renewals
and extensions of said copyright, which may be secured
under the laws, now or hereafter, in force and effect
in the United States, or in any other country or
The endorsement on the recently produced checks, which was stamped on the reverse of the checks and then signed by the payee, provided in relevant part:
"This check is accepted in full payment for all the
undersigned's right, title and interest in and to the
strip, copy, art, continuity, characters, story or
manuscript entitled ___ and the undersigned agrees
that the maker of this check and or its successors
assigns are granted the full ownership rights to said
work for publication, transcription by dramatization,
movies, radio, television, broadcasting, advertising,
or for any other uses including copyright. Permission
is hereby granted to make editorial changes.
Payer/Endorser is the author or accredited agent in
this outright transactions and guarantees that the
work is free from libel or copyright or other
Declarations submitted on DeCarlo's behalf state that freelance artists working for ACP were required to sign documents similar to or substantially the same as the form agreement and endorsements referred to above at least as early as 1954.*fn59
In addition, DeCarlo testified at his deposition that the handwritten copy he produced was "the contract on the back of the old checks" and that it was used in 1970, but he was unable to say precisely what wording was used at various other points in his lengthy relationship with ACP.*fn60
It is undisputed, however, that the forms were revised at least once during the period April 1966 and 1982.*fn61
F. The Parties' Agreements
1. The 1988 Agreement
On October 25, 1988, DeCarlo and ACP entered into a so-called Newsstand Comic Independent Contractor's Agreement (the "1988 Agreement").*fn62 The contract began with a series of recitals, including that
• ACP "is the publisher of comic strips and comic
books . . . of which [ACP] is the sole and exclusive
• ACP "seeks to supplement its own existing comic
strips and comic books (hereinafter the `Existing
Archie Works') by the purchase of the entire right,
title and interest in existing third party comic
strips and pages for its comic books (hereinafter
the `Existing Third Party Works'),"
• ACP "desires to retain third parties to modify
or otherwise work with the Existing Archie Works
and/or the Existing Third Party Works . . . on a
work made for hire basis, to create modified comic
strips and pages for its comic books (hereinafter
the `Modified Works')," and
• "[T]he Contractor [i.e., DeCarlo] desires to
confirm the assignment to [ACP] of the Contractor's
entire right, title and interest in and to whatever
comic strips and pages for comic books the
Contractor may have heretofore provided [ACP] in
furtherance of this project and further desires to
work with [ACP] in the future under the terms and
conditions hereinafter expressed."*fn63
It then set forth covenants in relevant part as follows:
"1. (a) The Contractor hereby assigns and conveys to
[ACP] all of its rights, title and interest in the
Existing Third Party Works heretofore submitted to
"(b) The Contractor further agrees to work with [ACP]
on a work made for hire basis to:
"(i) create and develop for [ACP's] exclusive use
Additional Works, and "(ii) perform modifications of
Existing Archie Works, Existing Third Party Works
(including Existing Third Party Works of others) and
Additional Works . . ."*fn64
"2. (a) The Contractor hereby assigns to [ACP] all
right, title and interest in and to all Works
submitted under this Agreement as well as to any
patent rights, copyrights, trademark rights and/or
applications therefore which relate thereto. The
Contractor agrees to execute all documents which are
reasonably required to perfect such assignment. It is
agreed and understood that such Works shall constitute
Works Made for Hire and shall be the sole and
exclusive property of [ACP]. To the extent any work of
Contractor shall not be deemed under law to constitute
subject matter which may be treated as work made on a
Work Made for Hire basis, then Contractor hereby
assigns and conveys to [ACP] all of its rights, title
and interest in any such work.
"(b) The Contractor hereby expressly waives all claim
of right which it may have to any ownership interest
in such Works and/or the ARCHIE property."
2. The 1996 Agreement
The 1996 Agreement is entitled a Work for Hire Agreement between DeCarlo and ACP.*fn65 It began with a series of introductory recitals:
• ACP "is in the business of producing and/or
publishing comic strips and comic books that include
characters, artwork, stories, plots, trademarks,
logos, and other creative expressions
(`Properties'). All references to `Properties' in
this Agreement will include existing and
future-created Properties that are commissioned by
[ACP] and/or used in any of [ACP's] publications or
• "All past, pending and future uses of all
Properties, including uses by [ACP's] licensees,
will be collectively referred to in this Agreement
as the `Works.'"
The 1996 Agreement then set forth provisions defining the relationship of the parties, their understanding regarding compensation, and so on. The key provisions included the following:
"5. Contractor's full and complete compensation for
each assignment . . . will be a fixed sum based on a
rate to be mutually agreed upon. . . . Contractor will
not be entitled to royalties, to income derived from
licensing or merchandising, or to additional
compensation for the creation of new
Properties. . . ."
"19. To the extent that any past, pending or future
contributions by Contractor to the Works or Properties
do not qualify as a Work for Hire, Contractor will and
hereby does assign to [ACP] any right, title and
interest that he/she has or may obtain therein,
including all copyrights, patents, trademarks and
other proprietary rights. Contractor will sign, upon
request, any documents needed to confirm that any
specific Works or Properties are Works for Hire, to
effectuate the assignment of his/her rights in any
Works or Properties to [ACP] and/or to obtain
copyright, trademark and/or patent protection for any
of the Works or Properties."
G. Plaintiff's Claims
ACP here seeks (1) declarations against DeCarlo's executrix that (a) the estate is barred on various theories from challenging ACP's exclusive rights, title and interest in and to the Sabrina, Josie and Cheryl Blossom properties, (b) DeCarlo's contributions to the Sabrina property were works for hire owned ab initio by ACP, and (c) Notices of Termination of Copyright and Related Licenses and Rights served by DeCarlo on ACP and its licensees, which purported to terminate transfers of copyright in the Sabrina and Josie properties, are ineffective, and (2) an injunction barring DeCarlo's successors in interest from (a) commencing or prosecuting any action challenging ACP's exclusive ownership of all rights, title and interest in and to the Sabrina, Josie and Cheryl Blossom properties, or (b) purporting to exercise rights of termination pursuant to Section 203 of the Copyright Act.*fn66
H. Prior Proceedings in this Action
DeCarlo initially interposed counterclaims relating to his ownership of the Sabrina property on a number of theories. In passing on ACP's motion to dismiss the counterclaims, the Court held that DeCarlo failed to state a claim either for breach of fiduciary duty or under the Lanham Act.*fn67 Defendant, in turn, moved unsuccessfully to dismiss four of plaintiff's claims. In denying the motion, the Court held that plaintiff was entitled to the declaration it sought with respect to the validity of the termination notices.*fn68 It further held that defendant's position that he was "free to sue plaintiff and others based on claims for infringement arising within the three year period immediately preceding the filing of any complaint" "ma[de] little sense and [was] against the great weight of authority."*fn69
In resisting a motion for summary judgment, it is not enough for the nonmoving party to allege the existence of a genuine issue of material fact. When, as here, the moving party has proffered affidavits and other admissible evidence to demonstrate the absence of any factual issues, the nonmoving party must come forward with probative evidence that points to the existence of a factual dispute that precludes summary judgment.*fn70 Moreover, not any factual dispute will defeat a motion for summary judgment.*fn71 The dispute must be genuine, that is to say the evidence must be "such that a reasonable jury could return a verdict for the nonmoving party."*fn72 And it must relate to a material fact, that is a fact that will affect the substantive outcome of the case.*fn73
A. Ownership of the Properties
The Court already has decided that, as between ACP and DeCarlo, DeCarlo is equitably estopped to assert any claim to ownership of copyright in the Josie property.*fn74 As defendant now asserts, a sine qua non of that conclusion was a determination "that ACP was `ignorant of the facts alleged by DeCarlo, i.e., that he claim[ed] ownership in the characters' and object[ed] to ACP's exploitation fo [sic] them."*fn75
DeCarlo now argues that the recently produced documents — the form of agreement and the check endorsements referred to above — "plainly refutes this finding and bars any finding of equitable estoppel in this (or the prior) case."*fn76 Even assuming, for the sake of argument, that the evidence, if offered in DeCarlo I, would have raised a genuine issue of material fact sufficient to defeat ACP's motion for summary judgment on equitable estoppel grounds, which is doubtful for reasons suggested below, defendant nevertheless overlooks the fact that the judgment in DeCarlo I has preclusive effects here.
To begin with, DeCarlo's claim in DeCarlo I was that he owned the Josie property. "Under established principles, a final judgment on the merits `prevents litigation of all grounds for, or defenses to, recovery that were previously available to the parties, regardless of whether they were asserted or determined in the prior proceeding.'"*fn77 In consequence, the judgment in DeCarlo I bars any subsequent claim by which defendant might seek ownership of the Josie property, regardless of whether the particular grounds were asserted in the prior action. The estate's contention that ACP is not entitled to "a declaration that DeCarlo may not challenge ACP's exclusive ownership of the Josie property" is just such a claim. Its position in this case therefore is foreclosed by the judgment in DeCarlo I.
The same result would be reached by issue preclusion.
"Litigants who have had a full and fair opportunity to
litigate ordinarily will not be heard to relitigate an
issue actually, finally and necessarily decided
against them in a prior action. In order for this
doctrine of issue preclusion to apply, four
requirements must be satisfied:
"(1) the issues in both proceedings must be
identical (2) the issue in the prior proceeding must
have been actually litigated and actually decided,
(3) there must have been a full and fair opportunity
for litigation in the prior proceeding, and (4) the
issue previously litigated must have been necessary
to support a final judgment on the merits.'"*fn78
Each of these criteria is satisfied here.
As noted, DeCarlo I was decided on the ground that DeCarlo was equitably estopped to challenge ACP's ownership. ACP makes precisely that claim here. The question whether ACP was ignorant of DeCarlo's claim of ownership in the Josie property was essential to the decision in DeCarlo I, actually litigated and necessarily decided. DeCarlo had a full and fair opportunity to litigate it. The estate therefore is collaterally estopped by the finding in DeCarlo I from contesting ACP's ignorance of DeCarlo's claim of ownership in the Josie property.
The recent production of the form of agreement and the check endorsements does not alter this conclusion. Res judicata and collateral estoppel apply even in the face of a claim that the prior judgment was erroneous as long as that judgment stands.*fn79 In any case, DeCarlo had his copy of the check endorsement used in 1970 and access to Messrs. Bolling and Edwards and the documents they possessed at the time DeCarlo I was litigated. He has offered no explanation for his failure in that case to raise the contention he now makes. In all the circumstances, defendant is precluded by DeCarlo I from asserting any claim of ownership in the Josie property.
ACP asserts ownership of the Sabrina property on a number of grounds. The Court begins with the contention that DeCarlo's contributions to each were works for hire in consequence of which ACP owns the copyrights.
(a) Sabrina Works Prior to January 1, 1978
Works created before January 1, 1978, the effective date of the Copyright Act of 1976 (the "1976 Act"), are governed by the Copyright Act of 1909 (the "1909 Act"). Under that statute, a work by an independent contractor such as DeCarlo, in the absence of an agreement to the contrary, was a work for hire if it was created at the "instance and expense" of the hiring party.*fn80 The instance and expense test is satisfied if the putative employer was the motivating factor that induced the creation of the work.*fn81 An essential element of this relationship was the right of the hiring party to control and supervise the manner in which the work was created.*fn82 The expense requirement was met if "a hiring party simply [paid] an independent contractor a sum certain for his or her work."*fn83
The first Sabrina story, as well as the model sheet, assuming there was one, was prepared in or perhaps before 1962. ACP quite clearly induced the creation of the Sabrina works.*fn84 It retained editorial and stylistic control over anything submitted by DeCarlo. DeCarlo was paid for his contributions to the Sabrina properties.*fn85 Those contributions therefore presumptively were works for hire, and ACP is entitled to judgment unless DeCarlo has adduced admissible evidence which, construed in his favor, could justify a finding that the parties agreed that DeCarlo would own the copyright notwithstanding DeCarlo's admission that he understood "[ACP] thought that they were owners, that they owned the copyright,"*fn86 an admission very much in tension with any contention that ACP agreed that DeCarlo owned the copyright. This he has failed to do.
First, the lynchpin of DeCarlo's contention that there indeed was an agreement or agreements to the contrary is the form of voucher agreement and the check endorsements to which reference already has been made. But he has produced no such agreement with respect to any Sabrina contributions. Rather, he has adduced evidence that there were, or perhaps were, voucher agreements and check endorsements relating to his Sabrina contributions — all of which have been lost — and that their terms were "similar" or "identical" to the forms that he has proffered, at least so far as a couple of witnesses remember decades later.
The best evidence rule ordinarily requires that the terms of a written instrument be proved by the instrument itself.*fn87 Where, as here, the original instrument has been lost, its contents may be proved by other evidence.*fn88 And that is what DeCarlo has sought to do. The question is whether the evidence is sufficient to raise a genuine issue of material fact.
The standard governing this question is reasonably clear. As Judge Pollack has written, "[r]elief for an alleged breach of a written contract cannot be granted where the alleged contract has not been produced, plaintiff's testimony regarding the alleged contract is inconclusive, [and] essential terms of the alleged contract are in doubt. . . ."*fn89 Indeed, the cases cited in the margin, the strength of the presumption of a work for hire relationship absent proof of a contrary agreement, and the Nimmers support the view that plaintiff is obliged to produce evidence sufficient to justify a finding of a contrary agreement by clear and convincing evidence.*fn90
There is considerable uncertainty as to the language of the forms of voucher agreement and check endorsements that were used in the 1960's when Sabrina was created and at any other time prior to the effective date of the 1976 Act. The evidence concerning the voucher agreement was that a form of voucher agreement has been used in the art department to pay for work produced for ACP, but there is no proof as to when that practice started.*fn91 One ACP witness testified that the form used in 2000 is "similar" to the 1981 version produced during discovery.*fn92 Two freelance artists aver that they were required by ACP for many years to sign voucher forms containing language similar or identical to that on the 1981 version, although neither was able to quote or produce the language.*fn93
The situation with respect to the check endorsements is similar. We have DeCarlo's handwritten copy of an endorsement he says he signed in 1970, but he was not able to say precisely what wording was used at various other points during his relationship with ACP.*fn94 The only surviving check endorsed by DeCarlo (it bears the form of endorsement quoted above) is dated January 3, 1986,*fn95 long after the effective date of the 1976 Act. The declarations of the two other artists that defendant has submitted are equally unilluminating. Mr. Bolling has produced a form of endorsement used in 1980 that is identical to that on DeCarlo's 1986 check,*fn96 which suggests that this particular form was in use at least during the period 1980 through early 1986. And Mr. Edwards avers that he signed hundreds of check endorsements over nearly four decades which were "similar" to that form, whatever that means.*fn97
In the last analysis, it is DeCarlo's burden to produce evidence which, if credited, would permit a trier of fact reasonably to conclude, by clear and convincing evidence, that DeCarlo and ACP agreed that DeCarlo would own the copyright to his pre-1978 contributions to the Sabrina property notwithstanding the "almost irrebutable"*fn98 presumption that these were works for hire.
While there is evidence as to a form of endorsement used in the period from 1980 until 1986 and as to a form of voucher agreement used in 1981, the Copyright Act provisions dealing with works for hire changed with the enactment of the 1976 Act. The evidence demonstrates also that the form of endorsement used in at least part of the 1980's differed from that which DeCarlo copied down in 1970, thus confirming that the language changed at least once in the 1970-1980 period.*fn99 Beyond that, we have nothing as to the wording that was used either in the endorsements or in the voucher agreement at any time prior to the effective date of the 1976 Act beyond conclusory assertions, decades after the fact, that it was similar or identical to that used later on.
In these circumstances, any determination by a trier of fact as to what the text was during the relevant period, even with the benefit of the vague testimony of Messrs. Edwards and Bolling, would be speculation. Hence, even assuming that knowledge of the language would answer the work for hire question, DeCarlo has failed to sustain his burden of adducing admissible evidence which, if credited, would permit a rational finding, by clear and convincing evidence, as to the substance of that language. Indeed, the Court would reach precisely the same result under a preponderance of the evidence standard, as this Circuit does "not permit an issue to go to trial on the basis of mere speculation in favor of the party that bears the burden of proof."*fn100 "[A]n inference is not a suspicion or a guess. It is a reasoned, logical decision to conclude that a disputed fact exists on the basis of another fact (that is known to exist)."*fn101 The evidence before the Court does not permit a reasoned, logical decision as to the terms of any voucher agreements and check endorsements during the relevant period.
Second, even if one were to assume that the check legends and voucher agreement forms used from 1960 through the end of 1977 were the same as the endorsement DeCarlo copied down in 1970, the assumption would not permit an inference (under either a clear and convincing or a preponderance standard) that ACP and DeCarlo agreed that DeCarlo would retain copyright in his contributions to the Sabrina property. The 1970 endorsement confirms that ACP's "check is accepted as full payment for all the undersigned's right, title and interest in and to the strip, copy, art, continuity, characters, story or manuscript entitled or used in" the story identified on the check. It "affirms that the maker of this check and/or its assigns are given the full rights to use said property for publication, movies, talkies, radio, television, broadcasting, advertising, or for any other use" and have the right to make editorial changes. And it represents that the "endorser is autor [sic] or accredited agent in this sale and guarentees [sic] that the work is free from libel or infringement." Thus, the endorsement, far from suggesting that DeCarlo retained copyright in the contribution for which the endorsed check was issued, supports the view that ACP was the sole owner of all rights.
The Second Circuit's decision in Playboy Enterprises*fn102 confirms this conclusion. Playboy paid for certain of the works there at issued with checks that were stamped with what the Circuit referred to as Legend A, which provided in relevant part that the payee, "[b]y endorsement of this check, . . . acknowledges payment in full for the assignment to Playboy Enterprises, Inc. of all right, title and interest in and to" enumerated works.*fn103 The trial court found that this endorsement evidenced an agreement that the artist would retain copyright, reasoning that the endorsement would have stated that the relationship was an employment for hire if that in fact had been the intention.*fn104 The Court of Appeals, however, concluded that this finding was clearly erroneous and ruled that the relationship was an employment for hire:
"[W]e find it impossible to discern the intent of the
parties from the language of Legend A. The legend
acknowledges an assignment of rights, but it does not
specifically mention copyright — let alone
common law copyright. It could intend the transfer of
a one-time use right, . . . or of common law
copyright, as Playboy argues, or of all rights
— including both copyright and possessory
rights. As Legend A is not clear, and as Playboy's
explanation for the agreement is at least plausible,
we are not convinced that the legend either proves or
disproves that the parties intended something other
than a work-for-hire relationship.
"Given the controverted evidence of a contrary
agreement between Playboy and Nagel, we conclude that
it was clearly erroneous for the district court to
find that Dumas met her burden of proving that the
parties intended a relationship other than work for
hire. Hence, by presumption, Playboy is the `author'
of the works created before January 1, 1978 that were
made for hire."*fn105
This analysis governs here. The language of the 1970 endorsement copied down by DeCarlo does not even expressly acknowledge an assignment. The acceptance of the payment "for all of the undersigned's right, title and interest" in the enumerated works might have reflected a transfer of a limited right, whether one-time use or something else. But it is equally plausible that it was in the nature of a quitclaim — a transfer of DeCarlo's interest, if any, in the works — or perhaps of common law copyright or possessory rights. It simply is not clear. And the result in such a situation, Playboy teaches, is that the presumption of a work for hire relationship prevails.
Third, the 1988 Agreement assigned to ACP all of DeCarlo's "rights, title and interest in the Existing Third Party Works heretofore submitted to Archie"*fn106 and conveyed to ACP any rights that DeCarlo had in any of the comic strips and pages that he previously had "submitted to Archie," which included all of his Sabrina artwork.*fn107
(b) Sabrina Works After January 1, 1978
As an initial matter, DeCarlo's assignment in the 1988 and 1996 Agreements to ACP of any rights he may have had to any Sabrina works is dispositive of ACP's claim of ownership with respect to these works. As discussed above, the 1988 Agreement assigned to ACP all of DeCarlo's "rights, title and interest in the Existing Third Party Works heretofore submitted to Archie" and conveyed to ACP any rights that DeCarlo had in any of the comic strips and pages that he previously had "submitted to Archie," which included all of his Sabrina artwork. Under the 1996 Agreement, DeCarlo assigned to ACP any of his "past, pending or future contributions . . . to the Works or Properties," which included all characters that appear in any of ACP's comic books, comic strips or licensed products.*fn108 But this is not the only basis on which the Court finds that ACP owns the post-1978 Sabrina property.
Between January 1, 1978, the effective date of the 1976 Act, and October 25, 1988, the date of the 1988 Agreement, DeCarlo illustrated only three short stories, three short gags, some covers and a fashion page involving Sabrina.*fn109 ACP contends that none of these projects contained any new Sabrina material. Its Rule 56.1 Statement, which stands admitted, states:
"[t]he original look, personalities and
interrelationships of the Sabrina characters, as well
as the original on-going plot elements of the
property, were developed in the first Sabrina
stories, the Filmation programs and the stories
published in the early issues of Laugh-Out. . . . None
of [the works illustrated by DeCarlo between January
1, 1978 and October 25, 1988] contain any new
delineation of the Sabrina property or
Copyright in a character is vested when the character is "completely developed."*fn111
In view of the fact that DeCarlo's minimal contributions to the Sabrina property in the 1978-1988 period contained no new delineation of the property or characters, ACP owns those works.
In any case, Sabrina works created after October 25, 1988, the date of the 1988 Agreement, qualify as works for hire owned by ACP. Works created on or after January 1, 1978 are governed by the 1976 Act. To constitute a work for hire, a work must fit into one of nine categories,*fn112 be specially ordered or commissioned, and the parties must agree expressly that the work constitutes a work for hire.*fn113 The "specially ordered or commissioned" prong incorporates much of the "instance and expense" test from the 1909 Act: a work is specially ordered or commissioned within the meaning of the 1976 Act if the hiring party was the "motivating factor" behind the work and the independent contractor was paid for the work.*fn114 Although the hiring party often retains artistic control over the work, such control is not an absolute requirement of the work for hire test.*fn115
The Sabrina works fall within the periodical categories covered by the 1976 Act. All were specially ordered or commissioned by ACP.*fn116 Moreover, the 1988 Agreement expressly provided that all works DeCarlo submitted to ACP would constitute works for hire,*fn117 and the 1996 Agreement further stated that "[t]his is a Work for Hire agreement between Archie Comic Publications, Inc. . . . and Daniel S. DeCarlo."*fn118 In consequence, any contributions by DeCarlo to the Sabrina property created after October 25, 1988, the date of the 1988 Agreement were works for hire.
3. Cheryl Blossom Properties
The Cheryl Blossom works are part of the Archie property.*fn119 Paragraph 2(b) of the 1988 Agreement provides that DeCarlo "hereby expressly waives all claims of right which [he] may have to any ownership interest in such works and/or the ARCHIE property." In consequence, ACP also is the owner of any copyright interests in the Cheryl Blossom property. Moreover, for reasons discussed above, DeCarlo assigned any rights he may have had to any such works in the 1988 and 1996 Agreements.
B. The Termination Notices
The Court held in Archie II that "any right [DeCarlo] may have to terminate rights transferred pursuant to the 1988 and 1996 Agreements must be exercised during the five year period beginning at the end of thirty-five years from the date on with the relevant grants were executed."*fn120
In consequence, the purported notices of termination, to the extent DeCarlo has a right to serve them, are premature. ACP is entitled to a declaration that they are null and void.
C. Injunctive Relief Sought by ACP
Plaintiff's third claim for relief seeks an injunction barring defendant from suing or threatening to sue ACP and its licensees with respect to the Josie, Sabrina and Cheryl Blossom properties. In view of the Court's determination that ACP, and not defendant, owns the copyrights in those properties, and in view also of the clear threat of further harassment by this litigious defendant, ACP is entitled to that relief.
ACP's motion for summary judgment is granted to the extent that ACP shall recover judgment:
(1) declaring that defendant is equitably estopped
from challenging ACP's exclusive ownership of all
rights, title and interest, including copyrights, in
and to the Josie property;
(2) declaring that defendant's testator's
contributions to the Sabrina property were works for
hire owned ab initio by ACP and, in any case, that any
right, title and interest therein, including
copyrights, which he ever had were assigned by him to
(3) declaring that all right, title and interest of
defendant's testator's contributions to the Cheryl
Blossom property, if any, were assigned by him to
(4) declaring that the Notices of Termination of
Transfer of Copyright and Related Licenses and Rights
referred to in the complaint are null and void; and
(5) enjoining defendant from:
(a) commencing any action against ACP, its
successors, its licensees and its licensees'
successors which challenges ACP's ownership of the
Josie, Sabrina and/or Cheryl Blossom properties,
and/or any character or characters depicted
therein, which challenges ACP's ownership thereof,
including without limitation, copyrights therein,
premised on the assertion that defendant's testator
has and/or ever has had any rights therein; and
(b) serving and/or recording any notice of
termination of transfer of copyright pursuant to
17 U.S.C. § 203 with respect to the Josie,
Sabrina and/or Cheryl Blossom properties, and or any
character or characters depicted therein, premised
on the assertion that defendant's testator has
and/or ever has had any rights therein.
Settle judgment on five business days notice.