Today we have a question from Hurley, who writes:
In [Ultimate Spider-Man #109] Wilson Fisk, A.K.A. the Kingpin, points out to Spider-Man that the costume he wears and his name were given to him by a now-defunct wrestling company. Kingpin bought said company [in issue #106], which he says gives him merchandising rights to all things Spider-Man related. Clothing, toys, etc. Is this legally correct?
(If you’re interested, this storyline is collected in Ultimate Spider-Man vol. 18.)
Here’s the complete history: As usual, Spider-Man tried to make some extra money on the wrestling circuit. The company that organized the matches was Hercules Wrestling, Inc., and apparently Parker signed away the Spider-Man name and merchandising rights to Hercules. Later, a Spider-Man movie came out, and the studio managed to prevent Hercules from putting out Spider-Man merch, resulting in Hercules going bankrupt. Apparently a company called C and C Licensing picked up the rights from Hercules in bankruptcy. C and C is a subsidiary of GG Enterprises, which Fisk purchased. Thus, through this chain of subsidiaries, Fisk owns the rights to the Spider-Man name as well as the licensing rights for his likeness. As a result, Fisk actually wants Spider-Man to keep doing his thing because Fisk makes more money from the merchandise sales than he loses from Spider-Man meddling in his affairs. Pretty villainous, eh?
There are three major questions here. First, what rights are involved, exactly? Second, could Fisk have purchased them that way? Third, is Spider-Man really powerless to do anything about it?
I. Name and Likeness Rights
Name and likeness rights generally fall under the right of publicity, which is something that we (and guest author Brad Desnoyer) have talked about before. As Brad noted, the right of publicity “protects an individual’s ability ‘to control the commercial use of his or her identity.’” (quoting 31 Causes of Action 2d 121). In Spider-Man’s case, the rights of publicity at issue would likely cover his “stage name” and his likeness.
Since this all happens in New York, we can use the New York right of publicity statute. The statute covers a person’s “name, portrait or picture.” N.Y. Civil Rights Law § 51. A “name” can include a stage name, if it ”has become known to the public and identifies its bearer virtually to the exclusion of his true name.” See, e.g., DeClemente v. Columbia Pictures Indus. Inc., 860 F.Supp. 30, 53 (E.D.N.Y. 1994). Under this standard, Spider-Man would qualify, as he is nationally known as Spider-Man and is essentially unknown as Peter Parker. And of course his image would qualify as a “portrait or picture.”
So the rights at issue are pretty much as described in the comics (at least at the beginning; later on Spider-Man refers to Fisk owning “his copyright,” which is not accurate, unless Spider-Man was engaging in a little fourth wall-breaking.).
II. The Chain of Title and IP Holding Companies
From what I can tell from the comic, this all seems believable enough. It’s not 100% clear to me how the movie studio drove the wrestling company into bankruptcy, but admittedly I haven’t read those earlier issues yet, so maybe that’s explained in more detail. In any event, the maze of holding companies and subsidiaries is par for the course. Many media companies have separate holding and licensing companies for characters, trademarks, and other IP. For example, Marvel Entertainment, LLC (itself now a subsidiary of The Walt Disney Company) has three IP holding companies, including Marvel Characters, Inc.
You might be wondering why businesses bother creating IP holding companies. The answer, as is so often the case with strange corporate behavior, is tax reduction:
Specifically, if a holding company is created to own the trademarks of the operating company, it can license those marks back to the operating company. In some states, tax income from royalties from license agreements owned by the holding company is exempt. Further, the state from which the income is paid, cannot tax that payment either. Finally, the operating company may deduct the royalty payments as operating expenses.
Allan J. Sternstein et al., Designing an Effective Intellectual Property Compliance Program, in Corp. Compl. Series: Intell. Prop. § 3:7 (2011). Pretty sweet setup, huh?
III. So is Spider-Man Out of Luck?
Probably, unless his original contract with the wrestling company is invalid or unenforceable. The New York statute allows a person to sign away (in writing) their right of publicity. Interestingly, if the person is a minor, then their parent or guardian must give their written consent. N.Y. Civil Rights Law § 50. Ultimate Spider-Man is apparently a minor at the time, and I doubt Aunt May or Uncle Ben (who was still alive at the time) signed off on the wrestling contract, so that might be a way out.
Another issue might be whether the contract made the right of publicity assignable or available for sublicense. If the contract was solely with Hercules Wrestling, then it might not have been properly assigned to C and C, leaving Fisk with nothing. Unfortunately, Fisk’s storyline gets wrapped up before we find out whether Spider-Man had any legal way out. Too bad, since he was already teamed up with Daredevil, and I’d think Murdock would like to not only see Fisk behind bars but also a piece of his business empire taken away from him.
This was a nice application of what should be a significant issue in comics: within the fictional comic book world, superheroes and supervillains are real people and so have rights of publicity and privacy that would be worth a lot of money. Shady licensing deals would likely abound, but some superheroes could become rich from merchandise sales and endorsements (or they could donate it to charity, as it is sometimes suggested that Superman does). At the same time, a lot of the copyright issues that surround comic books in the real world wouldn’t exist. Thus, instead of comic book authors getting raw deals, the superheroes themselves would. Progress!