The Siegel-Superman case that Newsarama has been covering for nearly ten years to the day, took another step yesterday as Judge Larson of the US District Court ruled on the licensing between DC Comics and Warner Bros., finding that the two entities did indeed engage in a “fair market deal,” and as such, the Siegels are not entitled to further payments above and beyond the deals made between DC and Warner Bros. Download the entire opinion here.
Prior to this, the Siegels claimed that by virtue of their relationship – DC Comics and Warner Bros. are both part of the larger Time-Warner conglomerate – Warner Bros. paid licensing fees to DC from 1999 until the present for the Superman properties that were below market value and were, in fact, a “sweetheart deal.” The licenses in question were for Superman Returns and Smallville. Since 1999, the heirs of Superman co-creator Jerry Siegel have co-owned the Superman copyright with DC Comics.
The relationship between DC Comics and Warner Bros. has occasionally caused a raised eyebrow among fans, but as the businesses run, even though they are both owned by the same parent, DC holds the rights to all the DC Comics characters, and other divisions of the larger company pay DC a licensing fee to use them. Techincally, while he ruled in favor of Warner Bros. and DC Comics, Judge Larson said that there was "insufficient evidence that the 'Superman' film agreement between DC Comics and Warner Bros., whether judged by its direct economic terms or its indirect ones, was consummated at below its fair market value."
Following the Court’s decision, Warner Bros. Entertainment and DC Comics issued the following statement:
DC Comics and Warner Bros. Entertainment are very gratified by the court’s thorough and well-reasoned decision in this matter. The decision validates what DC and Warner Bros. have maintained from the beginning, which is that when they do business with each other, they always strive for – and achieve – fair market value in their transactions. We are very pleased that the court found there was no merit to plaintiffs’ position that the Superman deals were unfair to DC Comics and, by extension, the plaintiffs.
Siegel attorney Marc Toberoff also issued a written statement, saying:
"This trial was only an interim step in the multifaceted accounting case which remains, in that it only concerned the secondary issue of whether DC Comics, or DC Comics and Warner Bros., would have to account to the Siegels. To put this in further perspective, the entire accounting action pales in comparison to the fact that in 2013, the Siegels, along with the estate of Joe Shuster, will own the entire original copyright to Superman, and neither DC Comics nor Warner Bros. will be able to exploit any new Superman works without a license from the Siegels and Shusters."
Toberoff's date is significant, in that during the bench trial, Warner Bros.' Alan Horn testified that Warner Bros. currently has no Superman film in development, and the earliest one could be released would be 2012.
From Variety's report on the decision:
Toberoff also asseted that Larson found that Warner Bros. should have paid three to four times the amount actually paid for the Superman film rights and that he had found it "inequitable" that DC transferred the Superman film rights to Warner Bros. without the standard term providing for reversion for lack of ongoing exploitation.
"The Court pointedly ruled that if Warner Bros. does not start production on another Superman film by 2011, the Siegels will be able to sue to recover their damages," Toberoff added. "The Siegels look forward to the remainder of the case, which will determine how much defendants owe them for their exploitations of Superman."
Larson also set a December 1st trial date for determining the allocation of profits to the Siegel heirs.
For commentary on Judge Larson’s ruling, read what Jeff Trexler has to say here.