Superman charity auctions cancelled by Warner Brothers

Above: Be careful what you wish for . . .

Remember a week or so ago when I posted that charity is not a viable defense to IP infringement? Some well-meaning folk in the charity biz said I was being "contentious," but the fact is, this is the law. You can defy it or pretend it doesn't exist, but if you do there can be serious consequences.

Case in point: the cancellation of the Say It Backwards Superman auctions for Candlelighters. Whether or not you think the move is good PR, Time Warner--if it did indeed file the objection--has solid legal grounds for asking eBay to pull the items containing its trademarks or copyrighted characters.

Why would a company risk a backlash by taking action against charity? And what about the common practice of artists selling commissioned works featuring DC or Marvel heroes? I'm in the middle of grading exams so our overview will have to be brief, but here are a few important things to note:

Superman: Note that the first two auctions targeted for withdrawal featured Superman. As we've discussed at length elsewhere, DC is in a particularly sensitive situation regarding profits derived from this character. If there were any property that Time Warner lawyers would want to control to the fullest extent possible, Superman would be it.

Charity: Even if you are donating the proceeds to charity, selling others' intellectual property or using it to solicit donations typically constitutes infringement if you do it without permission. Nonprofits have skirted by on this for years, but the market is growing too large to ignore.

Maintaining the mark: Even if it is infringement, why would a company want to take money away from a charity? The following observation from Counterfeit Chic applies to DC as well--

The simplest answer is that their job is to protect [the company's] trademarks. And, legally speaking, they're supposed to object to unauthorized commercial distribution of those marks. A trademark holder that doesn't enforce its rights can ultimately lose them, as the marks may be considered abandoned or even generic. Every time you ask for a Kleenex instead of a tissue or make a Xerox instead of a photocopy, a trademark lawyer somewhere gets another grey hair.

The first sale doctrine: A commenter on Boing Boing brought up the first sale doctrine, but that doesn't apply here. In a nutshell, the first sale doctrine is what allows you to sell or otherwise dispose of an authorized copy of material that you've purchased. For example, if you bought a Superman comic you can sell or lend that copy to someone else without DC's permission. The same is true, say, for legally distributed original art from a published comic book.

However, that's not what appears to have been pulled from the auction. It seems that these drawings were unauthorized--DC never gave the artists permission to use its protected material. Even if someone else had previously purchased the items and donated them to the auction, DC had the right to try to take these drawings off the market. From a legal perspective, the items were no different from a bootleg t-shirt.

Artist commissions: Yes, it's true that a number of comic artists sell commissioned artwork depicting DC and Marvel characters, but that doesn't mean it's all legal. Some of it may indeed be authorized, expressly allowed under a provision in the artist's contract with the company. Yet absent an agreement allowing an artist to sell such work, a commission is arguably infringing a company's intellectual property to the extent that it includes trademarked or copyrighted material.

There are several reasons why DC and Marvel have turned a blind eye to such unauthorized artwork, such as the desire to maintain positive relations with certain artists or the relatively small and inconspicuous scale of the trade. However, as the market for commissioned work grows and efforts to protect company marks generally become more rigorous, the likelihood of legal action stands to increase.

In this regard, pay particular attention to the artists in SIB auction. These weren't just pros with an established relationship with DC--there were also amateurs offering their own interpretations of company characters. For instance, one of the artists listed is Paul Salvi, who, if it's the same guy, is currently one of the people trying to win a DC deal through the Zuda Comics competition.

Which brings us to . . .

Derivative works: If you read my series on Blog@, you might recall a creator who adds distinct new elements to a company's copyrighted material may hold the copyright to that original work. It's why a court held that Neil Gaiman owns Medieval Spawn, and the same legal doctrine was recently cited--unsuccessfully--by one fan artist in a lawsuit to claim the copyright in Batman Beyond.

A lawyer looking at a burgeoning trade in unauthorized art will at least think about the possibility that someone may turn around and sue DC for copyright infringement. One way to reduce the likelihood of such a suit succeeding is for the company to state that it has a policy of not reviewing unsolicited work; another strategy is to discourage artists from producing such material without a contract defining the rights.

Parting thoughts: As some have said, Time Warner could have held back or sought a negotiated solution, and it's possible that the company might relent. Nonetheless, it is also important for charities and fundraisers to understand that at a time when unauthorized copying is rampant, companies are becoming more aggressive in policing their rights. To avoid an unpleasant situation, the best time to address intellectual property issues is before the C&D.

UPDATE: SIP has a few additional comments on the situation. Because a couple of them seem to refer to this post, I'll address them:

(1) My reference to the C&D is in the last paragraph, where I was advising charities generally re what to do. I did not state that SIP itself received a C&D. I debated using something incident-specific like "takedown notice" but went with the broader term. Re the present situation, as I indicated in the second paragraph above, I'm not even stating as fact that the WB itself filed the original complaint to eBay, since I haven't seen the original notice; rather, my post simply addresses the applicable legal principles that could prompt such an action.

(2) Even if SIP meant it wryly after the fact, putting up the S-shield with the comment quoted above was not the wisest course of action if the aim is to work out an agreement to resume the charitable auction, nor does it do any favors for the aspiring professionals contributing to the auction. Lawyers are all too familiar with artists trying to make their name off of others' IP; the post in question links the blog to an agenda that they might not exactly help the contributors' own bid for advancement. This sort of thing is precisely why companies are becoming so rigorous in policing their marks.

We should add to the above another concern with which most folks supporting charity may not be familiar: namely, the heightened scrutiny of charitable fundraising and sales. Indiscriminate association of a company's marks with a charity could have serious negative repercussions for the brand. Is the money indeed going to charity? Who monitors this? Is the charity legitimate and is it using the funds effectively? If a well-meant charitable effort turns out to be problematic, it could severely tarnish the mark, which is why companies may prefer to vet a charity itself before allowing its marks to be used to raise funds.

Again, I'm speaking generally regarding the considerations that guide corporate action; I'm not making any allegations about the charity in question here or about SIP. My primary aim is to help charities understand the current environment and how they can avoid unwanted situations.