UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

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MARVEL WORLDWIDE, INC.,

MARVEL CHARACTERS, INC. and

MVL RIGHTS, LLC,

Plaintiffs,

- against -

LISA R. KIRBY, BARBARA J. KIRBY,

NEAL L. KIRBY and SUSAN N. KIRBY,

Defendants.

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Civil Action No. 10 Civ. 141 (CM) (KNF)

LISA R. KIRBY, BARBARA J. KIRBY,

NEAL L. KIRBY and SUSAN N. KIRBY,

Counterclaim-Plaintiffs,

- against -

MARVEL ENTERTAINMENT, INC.,

MARVEL WORLDWIDE, INC.,

MARVEL CHARACTERS, INC., MVL

RIGHTS, LLC, THE WALT DISNEY

COMPANY and DOES 1 through 10,

Marvel.

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PLAINTIFFS’ AND COUNTERCLAIM-DEFENDANTS’ MEMORANDUM OF LAWIN SUPPORT OF THEIR MOTION TO STRIKE DEFENDANTS’ JURY DEMAND

Marvel Worldwide, Inc. et al v. Kirby et alDoc. 53Dockets.Justia.com

Plaintiffs Marvel Worldwide, Inc., Marvel Characters, Inc., and MVL Rights, LLC(collectively, “Plaintiffs”) and Counterclaim-Defendants Marvel Entertainment, LLC (successorby merger to Marvel Entertainment, Inc. and together with Plaintiffs, “Marvel”) and The WaltDisney Company (“Disney”) respectfully submit this Memorandum of Law in Support of theirMotion to Strike the Defendants’ Jury Demand.

PRELIMINARY STATEMENT

Following the dismissal of all but one of Defendants’ counterclaims, the sole issue in thiscase is whether Plaintiffs are entitled to declaratory judgment that certain copyright terminationnotices are invalid or whether Defendants are entitled to declaratory judgment that they are valid.As this issue and the relief sought are purely equitable in nature, “there is no federal right to a jury trial,” and Defendants’ jury demand should be stricken.

See

P. 39(a).This case was set into motion two weeks after Disney announced its plan to purchase theMarvel companies when Defendants – the children and legal heirs of comic book artist Jack Kirby – served forty five notices (the “Termination Notices”), claiming to have future copyrightownership rights to various Marvel comic books published between 1958 and 1963 (the“Works”) featuring many famous characters, including The Fantastic Four, The Incredible Hulk,The Mighty Thor and The X-Men. The Termination Notices assert that Kirby transferred hisrights in the Works to Marvel’s predecessor in 1972 and that Defendants seek to “recapture”those rights by invoking the provisions of section 304(c) of the Copyright Act of 1976 (the“Copyright Act”). However, under federal copyright law, because the Works were created asworks made for hire, Marvel is the author, Kirby never had any rights to transfer, there is nothingto recapture, and the Termination Notices are invalid.

- 2 -Marvel submits that the undisputed record evidence is that the Works were works madefor hire and thus no triable issue of fact will remain. Nevertheless, if the case goes to trial, asneither Marvel nor Defendants seeks or is entitled to damages or any other legal remedy, Marvelrespectfully submits that it should be tried before the Court without a jury.

PROCEDURAL HISTORY

On January 8, 2010, Marvel brought a single cause of action seeking a declaratory judgment that, because the Works were created as works made for hire, the Copyright Act’stermination provisions are inapplicable and the Termination Notices are thus invalid and of noforce or effect. (Docket No. 1). This Court denied Defendants’ motion to dismiss for lack of personal jurisdiction. (Docket No. 27). Defendants then filed an answer and five counterclaimson April 28, 2010, seeking (1) a declaratory judgment that the Termination Notices are valid, (2)a declaratory judgment with respect to the principles to be applied in an accounting of profits, (3)damages for conversion, (4) damages for breach of contract and (5) damages for allegedviolations of the Lanham Act. (Docket No. 30). Defendants’ Answer and Counterclaimscontained a demand for a jury trial on Marvel’s claim and their counterclaims. Plaintiffs movedto dismiss all of Defendants’ counterclaims, and on November 22, 2010, this Court grantedMarvel’s motion to dismiss all but the first of Defendants’ counterclaims. (Docket No. 49). Allof Defendants’ claims for damages have been dismissed and Defendants’ only survivingcounterclaim is a cause of action for a declaratory judgment that the Termination Notices arevalid. An exemplar of the Termination Notices is attached to the Declaration of Jodi A. Kleinick (“Kleinick Decl.”) as Exhibit 1.The sole legal issue remaining in this case concerns the future copyright ownership in theWorks because “the validity of the Termination Notices hinges on the work-for-hire status of the