An attempt to untangle the legal web as Spider-Man goes to court...
There's a lot of poorly informed commentary flying around the internet with wild claims that comics and movies are to be cancelled and anger about the various parties involved. Much of the confusion is rooted in a misunderstanding about US copyright laws and just what is actually happening. So here is an attempt to explain it all.
US copyright law has changed over time and one of the consequences is that the length of copyright terms has been extended. So when Spider-Man was created in 1962 the US copyright term was a total of 56 years from publication. This was set down in the 1909 Copyright Act (PDF). The 1976 Copyright Act (PDF) was a massive overhaul of US copyright law with many changes to the law. And there are many provisions where the situation is different for works created before the Act took effect (at the start of 1978) and afterwards.
For pre 1978 works the copyright term was extended from 56 years to 75 years. Legal creators (a term I'll come back to as these cases often hinge on how that's defined) or their heirs (tightly defined at the time) were given the right to reclaim their copyrights for the additional period of copyright by terminating the assignment (or "transfer") to another party. This termination right can only be exercised in a strict window of time around the 56th anniversary.
Later on the 1998 Sonny Bono Copyright Term Extension Act (PDF) extended the term for pre 1978 works again, this time to 95 years. It provided the opportunity to terminate the transfer around the 75 year anniversary and also widened the definition of heirs who could terminate transfers (previously only the creator, their widow/er, children and grandchildren could do so).
The principle of creators being able to reclaim their copyrights years later has a long history going back to at least the 1710 Statute of Anne in Great Britain and was present in the first US copyright law, the 1790 Copyright Act. However it previously worked on the basis of there being two copyright terms with the creator having the power to renew for a second term otherwise it would go into public domain at the end of the first term. (This is why some US works from the 1920s to the 1960s are public domain and others are not.) The renewal right was also heavily undermined by initial contracts that included the renewal rights and thus gave publishers both terms, with the US Supreme Court upholding this in a 1943 ruling. The 1976 Act is trying to undo some of this by giving the creator an inalienable termination right that can't be signed away by an earlier contract no matter what it says. Heirs also have rights now as the longer copyright terms mean that often the creator will have died by the time the relevant anniversaries are reached.
However one key problem is the definition of who is the legal creator.
The concept of a "work made for hire" is mentioned in the 1909 Act but not defined in all circumstances. A staff writer on a company salary is clearly doing work for hire. A person who writes a story and then offers the complete manuscript for sale is clearly the creator transferring a copyright. But when a freelancer is commissioned fell into a void of uncertainty with courts having to decide.
It should also be noted that prior to the 1976 Act there was very little practical difference between someone doing work for hire and someone assigning all their rights to another. In both cases the payer wound up with a copyright that they would have for 56 years and the person who did the work would get whatever payment was agreed at the time. So a lot of contracts, agreements and paperwork did not always bother to go into specifics on what seemed like hair splitting. And Marvel was not very well organised in the early 1960s, often not having written contracts and what paperwork exists did not foresee the significance of later changers in the law.
US courts developed what became known as the "instance and expense test" whereby the circumstances under which it was decided to create something became critical. The 1976 Act did include a clear definition of work for hire and required written contracts specifying something was a work for hire to be signed in advance of creation for freelancers. But this did not apply retroactively.
Marvel's early 1960s situation was litigated some years ago when Jack Kirby's heirs sought to terminate the copyright transfer on the works he created for Marvel between 1958 and 1963. However Marvel sued to stop this and every court that heard the case ruled in Marvel's favour and that Kirby had been doing work for hire. The case was submitted to the US Supreme Court but got settled privately before the Court could decide whether to hear it or not. Opinion amongst commentators is divided as to whether Kirby's heirs stood much chance of getting the "instance and expense test" overturned and Marvel/Disney settled to avoid the legal ruling or whether the decision to settle was a political/commercial one to avoid bad headlines and a battle with the Hollywood talent unions who had shown a formal interest in the case.
The precedent of the Kirby case suggests that the Ditko estate and others are not going to get their portions of the copyrights and are most likely to settle for a monetary sum. It should also be noted that even if the copyright transfers were terminated then Marvel would still hold the portion of the copyright for Stan Lee's contributions (and likely also Jack Kirby's). So Marvel/Disney would be very unlikely to lose the characters at all.
I've seen some people bringing up the cases brought by Jerry Siegel, Joe Shuster and their heirs over the Superman copyright. That situation is quite different as Superman was created in a comic strip that Siegel & Shuster had been offering around for some years before DC Comics (to use the modern name) purchased it. As long ago as 1974, an appeal court ruled that this was not a work for hire but rather a copyright transfer (although it also ruled that Siegel & Shuster had assigned their renewal rights in a previous settlement) and so their estates have been able to seek termination. The situation there was complicated by other agreements signed by the estates over the years so it doesn't offer any precedent on what may happen.
So in summary this is not a case of Ditko's heirs suddenly waking up and deciding they want a bigger slice of Spider-Man's success. Nor is it an attempt to retroactively change an agreement made in 1962. Rather this a case based on the copyright term having been extended and determining who has the right to claim it. And it is not going to stop Marvel producing Spider-Man comics and movies anytime soon.
(Oh and also watch out for all the wild claims that US copyright terms have been extended just because Disney lobbied the US Congress to keep Mickey Mouse in copyright. Disney has certainly benefited from the extensions and was one of many bodies lobbying for the 1998 Act but was hardly the only factor. A lot of the changes in US copyright law in the last 60 plus years have been driven by international developments and a recognition that as the US is now a net copyright exporter it benefits from stronger protections and reciprocal international agreements. Probably the single most important factor in the 1990s was the European Union harmonising copyright lengths to a minimum of life of (last surviving) creator plus 70 years, an increase in length of 20 years over the minimum specified in the Berne Convention. This was a length already reached by Germany back in the 1960s.)
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