In a possibly historic ruling, a federal judge Wednesday determined that the heirs of Superman co-creator, Jerry Siegel, are now the rightful owners of one-half of the copyright of Superman, and have been since 1999.
The New York Times reported today that Judge Stephen Larson of the Central District of California had delivered a whopping 72 page ruling on the matter of who owns the copyright of Superman, establishing that "Action Comics" #1, the first appearance of Superman, was not considered to be a product of work-for-hire, making the copyright for that issue (and, naturally, the character of Superman) eligible for termination by Siegel's heirs. What that means in simpler terms -- the Siegel's now own half of the Superman copyright.
The ruling was based upon changes made in 1976 to the Copyright Act, extending the total length of copyright protection for a character like Superman from 56 years to 75 years since creation. This change also allowed any copyright transfers to be terminated so that the original copyright owner (or his/her heirs) could gain the benefit of those extra 19 years of protection (with the presumption being that it would be unfair to the original copyright owners, as any deals they made before the change in law were based upon the 56 year duration, not 75).
DC has an array of defenses, but their best one was that "Action Comics" #1 was a work-for-hire, which means that DC would be considered the creator of the copyright. Larson ruled against DC on this point, stating that Siegel and Shuster sold their property (and the copyrights therein) to DC for $130, in a standard copyright transfer. It is this transfer that Siegel's heirs filed for termination, which would have become effective in 1999, which Larson confirmed Wednesday.
There are a number of details still at play here, of course. The most notable right now is that DC will certainly appeal Larson's decision. The second is that Larson left it open to a jury to determine both how much money Time Warner (owner of DC Comics) owes the Siegels for the usage of Superman since 1999 (note this is only for US rights of Superman, DC still maintains full international rights), and how many rights the Siegels have to characters created after "Action Comics" #1 (as those later issues were work-for-hire, but how many of these characters were derivatives of Superman?).
Finally, the most notable event for future details is that this opens up an extremely interesting situation in 2013. In 2013, Joe Shuster's estate is eligible to terminate their half of the Superman copyright. You see, Shuster had no heirs, so his estate was unable to terminate those extra 19 years mentioned before, as the changes in 1976 to the Copyright Act were only available to authors or their heirs. In 1998, however, the Copyright Term Extension Act was passed, giving an additional 20 years to all copyrights established before 1978. Unlike the previous Copyright Act extension, the Act passed in 1998 gives the estate of Authors the right to terminate, as well. Therefore, in 2013, Shuster's estate (represented by Shuster's nephew Mark Peary) will terminate just like Siegel's heirs, meaning DC might very well lose the copyright to Superman entirely until 2033, at which point Superman would enter the public domain. Of course, who knows whether Congress will pass another extension before then.