Opinion ID: 899620
Heading Depth: 4
Heading Rank: 3

Heading: Implied Repudiation

Text: Finally, there is a genuine dispute as to whether Marvel's exploitation of the Ghost Rider copyright during the renewal term, 15 without paying royalties, implicitly repudiated Friedrich's claim to ownership. In Merchant v. Levy, 92 F.3d 51 (2d Cir. 1996), and Stone v. Williams, 970 F.2d 1043 (2d Cir. 1992), the alleged co-owners were 15 Marvel's extensive exploitation of Ghost Rider during the initial term is irrelevant, as it would be merely consistent with Friedrich's claims that he is the author and assigned only the initial copyright term to Marvel. - 38 - charged with notice of their ownership claim once they knew they were entitled to receive royalties, but the works in both those cases were hit songs regularly played on the radio. See Merchant, 92 F.3d at 52-53, 56 (Why Do Fools Fall in Love by Frankie Lymon and the Teenagers); 16 Stone, 970 F.2d at 1046, 1048 (songs of Hank Williams). In contrast, Marvel used the Ghost Rider copyright sparingly and in non-obvious ways between 2001 and 2004. Cf. Zuill, 80 F.3d at 1370 (analogizing statute of limitations for ownership claims to doctrine of adverse possession, which requires an express or implicit ouster to put the owner on notice); 3 Am. Jur. 2d Adverse Possession § 62 (2d ed. supp. Feb. 2013) (explaining that the possession of the adverse claimant must be open and notorious). During the renewal period but before 2004, Marvel merely: published six issues of a short-lived Ghost Rider comic book series from August 2001 to January 2002; advertised a single Ghost Rider toy in each of its 2003 and 2004 toy catalogs; and used Ghost Rider for a cameo appearance in a video game 16 In Merchant, the jury decided when the alleged co- owners should have been charged with knowledge of their claim. See Merchant, 92 F.3d at 56. - 39 - entitled Spider-Man. There is a genuine dispute as to whether a reasonably diligent person would have been put on notice by this activity. Marvel points out that its agreement to license a Ghost Rider movie had been highly publicized since 2000 and argues that this implicitly repudiated Friedrich's ownership of the renewal copyright. We conclude that there are genuine disputes of fact regarding whether these news reports repudiated Friedrich's claim. First, it is unclear whether this conduct even occurred during the renewal term. Because the copyright appears to have been first secured in 1972, the renewal term would not have vested in Friedrich until January 1, 2001. See 17 U.S.C. § 304(a)(2)(A)(i); 3 Nimmer on Copyright § 9.05[C][2] (explaining that the initial term for a work first published on March 12, 1969 would end December 31, 1997 -- at the end of the twenty-eighth year -- and the renewal term would vest on January 1, 1998). Marvel entered the license agreement on May 15, 2000, before the initial term expired. Therefore, news of - 40 - that agreement would not necessarily have repudiated Friedrich's ownership of the renewal term. Second, it was not clear that Marvel would refuse to pay royalties to Friedrich when the movie was released. According to Merchant and Stone, an ownership claim is triggered by knowledge of an entitlement to royalties that are not being paid, rather than by mere knowledge of the exploitation. See Merchant, 92 F.3d at 53, 56; Stone, 970 F.2d at 1048. Of course, in many cases, these two will go hand-in-hand. For example, a co-owner is aware of his claim of co-ownership from the moment the work is created, see Merchant, 92 F.3d at 56, and thus learning that another joint author is exploiting the work is sufficient notice that royalties are due. Here, however, Friedrich alleges primarily that he is sole author and alternatively that he is a joint author. As to his claim of sole authorship, Friedrich would not have a right to royalties with respect to the movie, but a claim for damages. But as explained above, it is not clear that entering the agreement infringed Friedrich's ownership rights as it may have occurred during - 41 - the initial term. With respect to the alternative coauthorship claim, it is unclear whether the agreement entitled Friedrich to any royalties before the movie was released and began generating profits in 2007. Moreover, there is evidence that Marvel did pay Friedrich royalties when it reprinted Spotlight 5 in 2005, suggesting that Marvel also might pay him royalties when the movie was released. Hence, a jury could find that a reasonably diligent person would not have known that Marvel was exploiting Ghost Rider, without paying royalties, during the renewal term but before April 4, 2004. Because there are genuine disputes regarding whether Friedrich should have known about Marvel's repudiation of his claim of ownership, his claim is not untimely as a matter of law. 17 17 We also reject Marvel's arguments that Friedrich is barred by the doctrines of laches, see New Era Publ'ns Int'l, ApS v. Henry Holt & Co., 873 F.2d 576, 584-85 (2d Cir. 1989), and equitable estoppel, see Veltri v. Bldg. Serv. 32B-J Pension Fund, 393 F.3d 318, 326 (2d Cir. 2004). Marvel has not suffered any prejudice, New Era Publ'ns, 873 F.2d at 584, or injustice, Veltri, 393 F.3d at 326, warranting the invocation of these equitable remedies. The loss of evidence and the deterioration of key witnesses' memories are the products of the twenty-eight year initial copyright term and the parties' joint failure to properly document the ownership of the Ghost Rider copyright at the time of its creation. Furthermore, Marvel was on notice of a competing claim to the Ghost Rider renewal - 42 -