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`A PPELLATE CASE NO. 12-57245
`O
`ral Argument Scheduled for May 23, 2013
`(Reinhardt, J.; Thomas, J.; Sedwick, D.J.)
`UUUU NITED N ITED NITED NITED SSSS TATES T ATES TATES TATES CCCC OURT OF O URT OF OURT OF OURT OF AAAA PPEALSP PEALS PPEALSPPEALS
`FOR THE F OR THE FOR THE FOR THE NNNN INTH I NTH INTH INTH CCCC IRCUITI RCUIT IRCUITIRCUIT
`
`D
`C COMICS,
`Plaintiff – Appellee,
`v.
`PACIFIC PICTURES CORPORATION; IP WORLDWIDE, LLC; IPW, LLC;
`MARC TOBEROFF; MARK WARREN PEARY, as personal representative of the
`Estate of Joseph Shuster; LAURA SIEGEL LARSON, individually and as personal
`representative of the Estate of Joanne Siegel; JEAN ADELE PEAVY,
`Defendants – Appellants.
`
`A PPELLANTS’ REPLY BRIEF
`
`A
`ppeal From The United States District Court for the Central District of
`California,
`Case No. CV-10-03633 ODW (RZx), Hon. Otis D. Wright II
`
`
`TOBEROFF & ASSOCIATES, P.C.
`Marc Toberoff (188547)
` mtoberoff@toberoffandassociates.com
`Keith G. Adams (240497)
` kadams@toberoffandassociates.com
`22337 Pacific Coast Highway #348
`Malibu, California 90265
`Telephone: (310) 246-3333
`Facsimile: (310) 246-3101
`
`Attorneys for Defendants-Appellants
`
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`TABLE OF CONTENTS
`
`INTRODUCTION ..................................................................................................... 1
`
`ARGUMENT ............................................................................................................. 4
`
`I. THE ORDER IMPROPERLY GRANTED DC’S FIRST CLAIM ................ 4
`
`A. Congress Intended To Protect The Termination Right Against
`Contractual Erosion ............................................................................... 4
`
`B. The Cases Turn On The Presence Or Absence Of Termination
` Leverage To Re-Negotiate A Pre-1978 Copyright Grant ..................... 6
`
`1. DC’s Arguments Are Unpersuasive ......................................... 10
`
`C. The 1992 Agreement Is Not A “Revocation” of Joe Shuster’s
`Superman Grants Nor A “Re-Grant” Of His Copyrights .................... 13
`
`1. DC’s New York Law Arguments Fail ...................................... 17
`
`D. The Record Belies DC’s Claim ........................................................... 21
`
`E. The Order Drew Improper Inferences Against Defendants ................ 25
`
`F. The Order Contravenes Congress’ Intent And Enables Easy
`Circumvention Of The Termination Right .......................................... 26
`
`II. DC’S REMAINING FIRST CLAIM ARGUMENTS CAN BE
`DISPOSED OF .............................................................................................. 29
`
`III. DC’S THIRD CLAIM SHOULD BE DENIED ............................................ 30
`
`CONCLUSION ........................................................................................................ 30
`
`CERTIFICATE OF COMPLIANCE ....................................................................... 31
`
`CERTIFICATE OF SERVICE ................................................................................ 32
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`TABLE OF AUTHORITIES
`Albany Sav. Bank, F.S.B. v. Halpin,
`117 F.3d 669 (2d Cir. 1997) ............................................................................... 17-18
`
`Arlington Cent. Sch. Dist. Bd. of Educ. v. Murphy,
`548 U.S. 291 (2006) ................................................................................................. 12
`
`Associated Food Stores, Inc. v. Siegel,
`205 N.Y.S.2d 208 (1960) ......................................................................................... 18
`
`Beck v. Manufacturers Hanover Trust Co.,
`481 N.Y.S.2d 211 (1984) ........................................................................................ 18
`
`Blair & Co. v. Otto,
`171 N.Y.S.2d 203 (1958) ......................................................................................... 20
`
`Bourne Co. v. MPL Commc’ns, Inc.,
`675 F. Supp. 859 (S.D.N.Y. 1987) .......................................................................... 30
`
`California Pro-Life Council, Inc. v. Getman,
`328 F.3d 1088 (9th Cir. 2003) ........................................................................... 29-30
`
`Classic Media, Inc. v. Mewborn,
`532 F.3d 978 (9th Cir. 2008) ............................................................................passim
`
`Classic Media, Inc. v. Mewborn,
`2006 U.S. Dist. LEXIS 90957 (C.D. Cal. Feb. 16, 2006) ....................................... 15
`
`Fair Hous. Council v. Riverside Two,
`249 F.3d 1132 (9th Cir. 2001) ................................................................................. 25
`
`Fred Fisher Music Co. v. M. Witmark & Sons,
`318 U.S. 643 (1943) ................................................................................ 1, 3-4, 27-28
`
`Goldbard v. Empire State Mut. Life Ins. Co.,
`171 N.Y.S.2d 194 (1958) ......................................................................................... 19
`
`Goldome Corp. v. Wittig,
`634 N.Y.S.2d 308 (1995) ................................................................................... 19-20
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`Healy v. Healy,
`594 N.Y.S.2d 90 (1993) ....................................................................................... 3, 18
`
`Hemlani v. Guerrero,
`902 F.2d 1412 (9th Cir. 1990) ................................................................................. 29
`
`Independent Energy Corp. v. Trigen Energy Corp.,
`944 F. Supp. 1184 (S.D.N.Y. 1996) ........................................................................ 20
`
`Larry Spier, Inc. v. Bourne Co.,
`953 F.2d 774 (2d Cir. 1992) ................................................................................. 5, 27
`
`Marvel Characters v. Simon,
`310 F.3d 280 (2d Cir. 2002) ....................................................................................... 5
`
`Milne v. Stephen Slesinger, Inc.,
`430 F.3d 1036 (2005) (9th Cir. 2005) ...............................................................passim
`
`Music Sales Corp. v. Morris,
`73 F. Supp. 2d 364 (S.D.N.Y. 1999) ......................................................................... 5
`
`N.F.L. Ins. by Lines v. B & B Holdings,
`874 F. Supp. 606 (S.D.N.Y. 1995) .......................................................................... 21
`
`N.Y. Times v. Tasini,
`533 U.S. 483 (2001) ................................................................................................... 5
`
`National American Corp. v. Federal Republic of Nigeria,
`597 F.2d 314 (2d Cir. 1979) ..................................................................................... 20
`
`Palm Desert Art, Inc. v. Mohr,
`2001 U.S. Dist. LEXIS 620 (N.D.N.Y Jan. 26, 2001) ............................................. 20
`
`Penguin Group (USA) Inc. v. Steinbeck,
`537 F.3d 193 (2d Cir. 2008) ..............................................................................passim
`
`Private One of N.Y., LLC v. JMRL Sales & Serv.,
`471 F. Supp. 2d 216 (E.D.N.Y. 2007) ..................................................................... 20
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`Ray Charles Found. v. Robinson,
`2013 U.S. Dist. LEXIS 21273 (C.D. Cal. Jan. 25, 2013) ................................ 5-6, 27
`
`Russ v. Morrison,
`695 F. Supp. 2d 33 (S.D.N.Y. 2010) ....................................................................... 18
`
`Stewart v. Abend,
`495 U.S. 207 (1990) ............................................................................................... 1, 5
`
`Trans-Orient Marine Corp. v. Star Trading & Marine, Inc.,
`736 F. Supp. 1281 (S.D.N.Y. 1990) .................................................................. 18, 20
`
`Vermont Teddy Bear Co. v. 538 Madison Realty Co.,
`1 N.Y.3d 470 (2004) ................................................................................................ 17
`
`Wang v. Chen,
`1992 WL 7840 (S.D.N.Y. Jan. 10, 1992) ................................................................ 18
`
`Woods v. Bourne Co.,
`60 F.3d 978 (2d Cir. 1995) ....................................................................................... 21
`
`Statutes
`
`17 U.S.C. § 203 .................................................................................................. 12, 28
`
`17 U.S.C. § 301 ........................................................................................................ 28
`
`17 U.S.C. § 304(c) ............................................................................................passim
`
`17 U.S.C. § 304(d) ..................................................................................................... 1
`
`Other Sources
`
`H.R. Rep. No. 1476, 94th Congress, 2d Sess. (1976) .......................................... 4, 12
`
`H. Comm. On The Judiciary, 88th Cong., Discussion And Comments On The
`Report Of The Register Of Copyrights (Comm. Print 1963) .................................. 26
`
`
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`INTRODUCTION
`For two centuries, Congress has provided authors and their families with the
`right to recover previously-transferred copyrights, to allow them to participate in the
`real value of their works and to remedy the sharp imbalance between publishers and
`authors. Stewart v. Abend, 495 U.S. 207, 218-21 (1990). Under all copyright acts,
`the renewal copyright was intended to revert to the author so as “to provide for [his]
`family … after his death.” Id. at 217. However, Fred Fisher Music Co. v. M.
`Witmark & Sons, 318 U.S. 643 (1943), effectively gutted Congress’ plan by
`allowing renewal rights to be pre-assigned, and publishers to insist on this.
`When Congress extended the renewal term in the 1976 Copyright Act, it
`therefore provided authors and their families with an inalienable right to recover
`their copyrights for the extended term by terminating old grants. In reaction to
`Fred Fisher’s frustration of its objectives, Congress spoke unequivocally:
`“Termination of the grant may be effected notwithstanding any agreement to the
`contrary….” 17 U.S.C. § 304(c)(5). By use of the word “any,” Congress
`mandated that this clause cover as broad a range of agreements as possible.
`In 1998 Congress reaffirmed its objectives in the Copyright Term Extension
`Act (“CTEA”), coupling a further term extension with a second termination right
`(Section 304(d)); expanding the class of statutory heirs to include an author’s
`estate; and again ensuring that this right could not be anticipatorily waived, settled
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`or otherwise alienated.
`In adopting DC’s erroneous arguments that a 1992 pension agreement with
`Shuster’s siblings barred the termination right, the district court’s order (ER-1-18;
`“Order”) invites all manner of opportunistic behavior to frustrate Congress’ goals.
`The Order misconstrued and contravened this Court’s holdings in Milne v.
`Stephen Slesinger, Inc., 430 F.3d 1036 (2005) (9th Cir. 2005) and Classic Media,
`Inc. v. Mewborn, 532 F.3d 978 (9th Cir. 2008), along with Penguin Group (USA)
`Inc. v. Steinbeck, 537 F.3d 193 (2d Cir. 2008), on which it purported to rely.
`In light of Section 304(c)(5) and Congress’ clear intent to protect the
`termination right, those cases narrowly held as follows: Where a statutory heir uses
`her termination rights as leverage to re-negotiate an author’s pre-1978 copyright
`grant, her express post-1978 revocation and re-grant will not be viewed as an
`“agreement to the contrary” because it achieves “the very result envisioned by
`Congress when it enacted the termination provisions.” Milne, 430 F.3d at 1047; see
`also Mewborn, 532 F.3d at 987-88; Steinbeck, 537 F.3d at 202, 204. Where the
`termination right is not used as bargaining leverage, an heir’s purported post-1978
`re-grant, though alleged to supersede a pre-1978 grant, does not bar the termination
`right. Mewborn, 532 F.3d at 989.
`The 1992 Agreement fails to satisfy this vigilant standard in every way.
`Prior to CTEA’s passage in 1998, no one held Shuster termination rights.
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`Shuster’s siblings could hardly have “leveraged” a non-existent right.
`DC also failed to provide any evidence that the parties even intended a
`“revocation and regrant.” The simple pension agreement purports to do neither,
`unlike the very explicit agreements in both Milne and Steinbeck. This is
`unsurprising – in 1992, there was no plausible reason for DC to revoke Shuster’s
`venerable Superman grants that had been upheld in two Court judgments. ER-113-
`15 ¶¶13-15.
`Nor does New York law salvage DC’s frivolous claim, as it naturally
`requires evidence of a “clear and definite” intent to revoke and replace a prior
`contract. Healy v. Healy, 594 N.Y.S.2d 90, 91 (1993).
`The Order’s misconstruction of the 1992 Agreement to “impliedly”
`eliminate the termination right – when all the evidence pointed to a contrary
`conclusion – flies in the face of Congress’ intent to safeguard the right.
`Under the Order, all that is needed to eradicate the termination right is some
`post-1978 quitclaim by non-statutory heirs that references copyrights. That is not
`the law, and is blatantly inconsistent with the statute, Congress’ clear objectives,
`and binding precedent. If allowed to stand, the Order would make a mess of this
`Court’s carefully-circumscribed decisions in Milne and Mewborn, turn a vital
`federal right into a state contract free-for-all, and pave the way for its easy
`circumvention. Fred Fisher, all over again.
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`ARGUMENT
`I. THE ORDER IMPROPERLY GRANTED DC’S FIRST CLAIM
`A. Congress Intended To Protect The Termination Right Against
`Contractual Erosion
` Congress has long recognized that authors, to see their works published,
`often agree to one-sided copyright transfers that publishers make as expansive as
`possible for as little compensation as possible. The termination provisions were
`designed to “to ‘safeguard authors against unremunerative transfers’ and improve
`the[ir] ‘bargaining position.’” Milne, 430 F.3d at 1046 (citations omitted).
`A provision of this sort is needed because of the unequal bargaining
`position of authors, resulting in part from the impossibility of
`determining a work’s value until it has been exploited.
`
`H.R. Rep. No. 1476, 94th Congress, 2d Sess. (“H.R. Rep. 94-1476”) at 124 (1976).
`This concern was “even more persuasive under section 304” as to pre-1978 grants:
`[T]he extended [renewal] term represents a completely new property
`right, and there are strong reasons for giving the author, who is the
`fundamental beneficiary of copyright under the Constitution, an
`opportunity to share in it.
`
`Id. at 140; see Mewborn, 532 F.3d at 984 (same), 985 (“This term extension was
`intended, once again, to benefit authors and their heirs, and not to serve as a
`windfall for grantees.”).
` Publishers had long contracted around Congress’ efforts to protect authors
`and their families, facilitated by Fred Fisher. To prevent such contractual erosion
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`and judicial frustration of the termination right, Congress was clear: “Termination
`of the grant may be effected notwithstanding any agreement to the contrary….” 17
`U.S.C. § 304(c)(5). The plain meaning is that termination rights may be exercised
`despite any contractual device or interpretation that divests them.
` This provision, combined with Section 304(c)(6)(D), barring re-grant of
`recaptured copyrights before termination notices are served, protects the right by
`preventing the preemptive settlement or sale of the termination interest, no matter
`how beneficial this might appear. No one – not authors, statutory or testamentary
`heirs – can alienate termination rights, as “[Section 304(c)] was drafted so as to
`leave no doubt about the family’s power to recapture the [author’s] copyright.”
`Larry Spier, Inc. v. Bourne Co., 953 F.2d 774, 779 (2d Cir. 1992). See N.Y. Times
`v. Tasini, 533 U.S. 483, 496 n.3 (2001) (noting the “inalienable authorial right to
`revoke a copyright transfer”); Stewart, 495 U.S. at 230 (“inalienable termination
`right”); Mewborn, 532 F.3d at 985, 986 (noting “inalienable” nature of right);
`Marvel Characters v. Simon, 310 F.3d 280, 282 (2d Cir. 2002) (same).
` “[T]he right cannot be waived in advance or contracted away.” H.R. Rep.
`94-1976 at 125. See Music Sales Corp. v. Morris, 73 F. Supp. 2d 364, 372
`(S.D.N.Y. 1999) (“Neither the author nor the statutory heirs may contract away
`their termination right….”); Ray Charles Found. v. Robinson, 2013 U.S. Dist.
`LEXIS 21273, at *21-22 (C.D. Cal. Jan. 25, 2013) (“[T]he Copyright Act prevents
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`the Court from interpreting the agreements signed by Defendants as limiting their
`statutory termination rights.”). While otherwise enforceable, contracts used to
`block statutory termination, directly or indirectly, are prohibited “agreements to the
`contrary” under Section 304(c)(5), with one narrow exception described below in
`Section I.B. Id. (“[A]greements [] interpreted to waive Defendants’ rights to
`recapture the copyrights at issue … are plainly ‘agreements to the contrary’ of the
`Copyright Act’s termination provisions and are unenforceable to that extent.”).
`B. The Cases Turn On The Presence Or Absence Of Termination
`Leverage To Re-Negotiate A Pre-1978 Copyright Grant
` In examining whether a post-1978 re-negotiation that effectively eliminated
`the termination right was void as an “agreement to the contrary,” Milne, Mewborn
`and Steinbeck all focused on whether a statutory heir had leveraged his/her
`termination right and achieved its legislative purpose. In denial, DC spends nine
`pages arguing that the decisions do not require a termination right. Dkt. 24-1
`(“AB”) 35-44. DC’s claim falls apart on reading the three cases, which all
`highlight this critical element.
` Milne spent paragraph after paragraph explaining that Christopher Milne’s
`post-1978 renegotiation, though effectively eliminating the termination right, was
`not “contrary” to Congress’ objectives, because Christopher held and fully
`leveraged his termination right:
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`Christopher …. us[ed] the bargaining power conferred by his
`termination right … result[ing], by some estimates, in a net gain of
`hundreds of millions of dollars....
`
`Milne, 430 F.3d at 1040-41 (emphasis added).
`The beneficiaries of the Pooh Properties Trust were able to obtain
`considerably more money as a result of the bargaining power
`wielded by the author’s son, Christopher, who was believed to
`own a statutory right to terminate the 1930 grant under section
`304(c)…. Although Christopher presumably could have served a
`termination notice, he elected instead to use his leverage to obtain
`a better deal....
`
`Id. at 1044-45 (emphasis added).
`Congress sought to foster this purpose [of safeguarding
`authors/heirs against unremunerative transfers and improving
`their bargaining position] by permitting an author’s heirs to use
`the increased bargaining power conferred by the imminent threat
`of statutory termination to enter into new, more advantageous
`grants. This is exactly what Christopher and the other
`beneficiaries of the Pooh Properties Trust did in 1983.
`After more than 50 years of advancement of the Pooh works in the
`marketplace, their value was sufficiently demonstrated, and the 1976
`Copyright Act provided Christopher a window for termination.
`The Pooh Properties Trust recognized the perceived right to
`terminate as a valuable bargaining chip, and used it to obtain an
`advantageous agreement that doubled its royalty share relative to
`SSI’s share. Thus, the 1983 agreement exemplifies the increased
`bargaining power that Congress intended to bestow on authors
`and their heirs by creating the termination right under the 1976
`Copyright Act. As the 1983 agreement appears to be the type
`expressly contemplated and endorsed by Congress, we do not
`consider it to be a prohibited “agreement to the contrary” under
`section 304(c)(5).
`
`Id. at 1046 (emphases added). Two more paragraphs were spent explaining how
`Christopher’s post-1978 re-negotiation achieved “the very result envisioned by
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`Congress when it enacted the termination provisions” and “the very purposes for
`which Congress enacted the termination right.” Id. at 1046-47, 1048.
` Consistent with Milne, Mewborn focused on the heir’s lack of termination
`leverage in a post-January 1, 1978 re-grant, in contrast to Christopher’s
`“immediately investative” (532 F.3d at 989) termination rights:
`Mewborn’s predicament is a far cry from Christopher Milne’s. Milne had–
`and knew that he had–the right to vest copyright in himself at the very time
`he revoked the prior grants and leveraged his termination rights….
`Mewborn, on the other hand, would not have the right to serve the
`advance notice that would vest her rights under § 304(c)(6)(B) until at
`the very earliest six years later. Thus, unlike Milne, Mewborn had
`nothing in hand with which to bargain.
`
`Id. (emphasis added).
`The district court misrelied upon Milne. Milne presented quite a distinct
`factual scenario with very different statutory implications. Whereas
`Mewborn in 1978 did not even have the right to serve an advance notice
`of termination … for another six years as to the story and eight for the
`novel, the heir in Milne had the present right to serve an advance notice
`of termination, and could exercise it at any moment. Thus when the
`Milne heir chose to use the leverage of imminent vesting to revoke the
`pre-1978 grant and enter into a highly remunerative new grant of the
`same rights, it was tantamount to following the statutory formalities,
`and achieved the exact policy objectives for which § 304(c) was enacted.
`
`Id. at 987 (citations omitted; emphases added).
`Our court in Milne did not find waiver or relinquishment of any right. What
`it did conclude was that the particular negotiated deal before it was not “any
`agreement to the contrary;” it was an agreement consistent with, and
`which fully honored Christopher’s right of termination which could vest
`immediately if he served notice. …. The avenue chosen by Christopher
`and the studio secured the exact equivalent result for him and his fellow
`heirs, and in no way subverted the termination rights and the
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`congressional purpose underlying them.
`
`Id. at 988 (emphasis added).
` While not binding here, Steinbeck engaged in a strikingly similar analysis,
`noting Elaine Steinbeck’s use of her termination right as leverage and how her
`post-1978 renegotiation comported with Congress’ intent:
`[N]o termination right was exercised prior to the 1994 Agreement, but
`Elaine Steinbeck did renegotiate and cancel the 1938 Agreement while
`wielding the threat of termination. Indeed, this kind of renegotiation
`appears to be exactly what was intended by Congress.
`
`Id. at 202 (emphasis added).
`It should be noted that under our view, authors or their statutory heirs
`holding termination rights are still left with an opportunity to threaten
`(or to make good on a threat) to exercise termination rights and extract
`more favorable terms from early grants of an author’s copyright. But
`nothing in the statute suggests that an author or an author’s statutory heirs
`are entitled to more than one opportunity, between them, to use termination
`rights to enhance their bargaining power or to exercise them. In this case,
`Elaine Steinbeck had the opportunity in 1994 to renegotiate the terms of
`the 1938 Agreement to her benefit, for at least some of the works
`covered by the agreement were eligible, or about to be eligible, for
`termination. By taking advantage of this opportunity, she exhausted the
`single opportunity provided by statute to Steinbeck’s statutory heirs to
`revisit the terms of her late husband’s original grants of licenses to his
`copyrights. It is no violation of the Copyright Act to execute a
`renegotiated contract where the Act gives the original copyright owner's
`statutory heirs the opportunity and incentive to do so.
`
`Id. at 204 (emphases added; citation omitted).
` In short, both this Court and the Second Circuit based their decisions about
`whether an alleged post-1978 “revocation and regrant” could effectively eliminate
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`the termination right, or was prohibited by Section 304(c)(5), on whether it had
`leveraged the contracting heir’s termination right – thereby achieving “the very
`purposes for which Congress enacted the termination right.” Milne, 430 F.3d at
`1048.
`1. DC’s Arguments Are Unpersuasive
` DC’s strained attempts to satisfy these binding precedents are to no avail.
` (i) To impersonate Milne, DC vaguely argues that Jean (without counsel)
`was aware of “termination.” AB-38. DC refers to hearsay in a letter from Frank
`(ER-1242), and Jean’s 1999 letter, saying she would not bring a “claim.” SER-
`114. The Order erroneously implied that this somehow satisfied Milne. ER-4, 10-
`11, 13. Both letters are legally irrelevant. As a matter of law, Jean and Frank had
`no termination rights or leverage in 1992 and “nothing in hand with which to
`bargain.” Mewborn, 532 F.3d at 589. In 1992, termination rights were still limited
`under Section 304(c)(2) to an author’s surviving spouse, children and
`grandchildren. Joe Shuster had none. DC knew this and told Jean, in 1992, that
`“we’ve done extensive research into the copyright act and any potential rights that
`you and Frank may have as Joe’s siblings and survivors. It is our firm conviction
`based on that research and expert counsel, that you don't have any legal rights or
`claims whatsoever.” ER-706. The 1992 Agreement was certainly not the “‘one
`opportunity … to use termination rights,’” as the Order incorrectly held. ER-11
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`(quoting Steinbeck); ER-13.
`(ii) Unable to satisfy Milne and Mewborn, DC seeks refuge in Steinbeck,
`falsely claiming that Elaine Steinbeck lacked termination rights. AB-36-38. The
`Second Circuit specifically noted that “Elaine Steinbeck held a one-half interest in
`the statutory termination rights.” 537 F.3d at 198 n.3. Under Section 304(c)(1),
`she needed only one of the author’s children to terminate, which was easily
`foreseeable. Contemporaneously with her 1994 agreement, Elaine entered into a
`second agreement concerning other works that Steinbeck’s children swiftly
`ratified. Id. at 196 n.1. Elaine also had a power of attorney that arguably allowed
`her to exercise the children’s termination rights. Id. at 203 n.5. Thus, when Elaine
`negotiated the 1994 Agreement, she “wield[ed] the threat of termination.” Id. at
`202. At most, DC’s mischaracterization of Steinbeck does not salvage its claim,
`but simply conflicts with Milne and Mewborn, which control. The Order
`nonetheless adopted and relied heavily on DC’s misleading rendition of Steinbeck.
`ER-8-9, 11-13.
` (iii) DC also repeatedly cites an out-of-context snippet from the
`voluminous legislative history of the 1976 Act to argue that alleged successors
`may eliminate the termination right by entering into a new contract “at any time.”
`AB-4, 22, 24-25, 36-37, 43. This fails for many reasons.
` Milne, far from endorsing DC’s position, simply cited this legislative
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`statement to note that a party with termination rights “may contract, as an
`alternative to statutory termination, to revoke a prior grant by replacing it with a
`new one,” and then emphasized Christopher’s “use [of] the increased bargaining
`power conferred by the imminent threat of statutory termination to enter into new,
`more advantageous grants.” 430 F.3d at 1045-46.
` DC misleadingly truncates the actual legislative history:
`Section 203 would not prevent the parties to a transfer or license
`from voluntarily agreeing at any time to terminate an existing grant
`and negotiating a new one, thereby causing another 35-year period to
`start running.
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`H.R. Rep. 94-1476 at 127. The reference to Section 203 is crucial. Section 203
`allows termination of an author’s post-1978 grants after thirty-five years; a re-grant
`by an author is not an “agreement to the contrary” because it does not eliminate the
`termination right, but merely resets the clock. In contrast, a post-1978 “revocation
`and re-grant” by an author’s successor eradicates the Section 304 termination right,
`evoking Section 304(c)(5).
` Finally, even if DC’s legislative history argument supported it, this cannot
`reverse Section 304(c)(5)’s clear text. See Arlington Cent. Sch. Dist. Bd. of Educ.
`v. Murphy, 548 U.S. 291, 304 (2006).
` (iv) DC attacks an “adequacy of consideration” straw man. AB-19, 38,
`44-45. Courts examine whether the consideration reflects the bargaining leverage
`of termination. See Milne, 430 F.3d at 1047-48; Steinbeck, 537 F.3d at 196, 204;
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`Mewborn, 532 F.3d at 989. The amount is not dispositive, particularly here, where
`there was no termination right. The 1992 Agreement’s modest $25,000/year
`pension, split two ways, simply underscores the absence of any bargaining
`leverage regarding the extremely valuable Superman copyright.1
`C. The 1992 Agreement Is Not A “Revocation” of Joe Shuster’s Pre-
`1978 Superman Grants Nor A “Re-Grant” Of His Copyrights
` DC’s argument that a post-1978 “revocation and re-grant” by an author’s
`beneficiary, with no termination right, can eliminate the termination