Litigation
In 1993, Gaiman was contracted by Todd McFarlane to write a single issue of Spawn, a popular title at the newly created Image Comics company. McFarlane was promoting his new title by having guest authors Gaiman, Alan Moore, Frank Miller, and Dave Sim each write a single issue.
In issue #9 of the series, Gaiman introduced the characters Angela, Cogliostro, and Medieval Spawn. Prior to this issue, Spawn was an assassin who worked for the government and came back as a reluctant agent of Hell but had no direction. In Angela, a cruel and malicious angel, Gaiman introduced a character who threatened Spawn's existence, as well as providing a moral opposite. Cogliostro was introduced as a mentor character for exposition and instruction, providing guidance. Medieval Spawn introduced a history and precedent that not all Spawns were self-serving or evil, giving additional character development to Malebolgia, the demon that creates Hellspawn.
As intended, all three characters were used repeatedly throughout the next decade by Todd McFarlane within the wider Spawn universe. In papers filed by Gaiman in early 2002, however, he claimed that the characters were jointly owned by their scripter (himself) and artist (McFarlane), not merely by McFarlane in his role as the creator of the series. Disagreement over who owned the rights to a character was the primary motivation for McFarlane and other artists to form Image Comics (although that argument related more towards disagreements between writers and artists as character creators). As McFarlane used the characters without Gaiman's permission or royalty payments, Gaiman believed his copyrighted work was being infringed upon, which violated their original, oral, agreement. McFarlane initially agreed that Gaiman had not signed away any rights to the characters, and negotiated with Gaiman to effectively 'swap' McFarlane's interest in the character Marvelman (McFarlane believes he purchased interest in the character when Eclipse Comics was liquidated; Gaiman is interested in being able to continue his aborted run on that title) but later claimed that Gaiman's work had been work-for-hire and that McFarlane owned all of Gaiman's creations entirely. The presiding judge, however, ruled against their agreement being work for hire, based in large part on the legal requirement that "copyright assignments must be in writing."
The Seventh Circuit Court of Appeals upheld the district court ruling in February 2004 granting joint ownership of the characters to Gaiman and McFarlane. On the specific issue of Cogliostro, presiding Judge John Shabaz proclaimed "The expressive work that is the comic-book character Count Nicholas Cogliostro was the joint work of Gaiman and McFarlane—their contributions strike us as quite equal—and both are entitled to ownership of the copyright". Similar analysis lead to similar results for the other two characters, Angela and Medieval Spawn.
This legal battle was brought by Gaiman and the specifically formed Marvels and Miracles, LLC, which Gaiman created in order to help sort out the legal rights surrounding Marvelman (see the ownership of Marvelman sub-section of the Marvelman article). Gaiman wrote Marvel 1602 in 2003 to help fund this project. All of Marvel Comics' profits for the original issues of the series went to Marvels and Miracles. In 2009, Marvel Comics purchased Marvelman.
Gaiman returned to court over three more Spawn characters, Dark Ages Spawn, Domina and Tiffany, that are claimed to be "derivative of the three he co-created with McFarlane." The original three characters, whose first appearance was never reprinted in Spawn trade paperback collections, are just now appearing printed for the first time. The judge ruled that Gaiman was right in his claims and gave McFarlane until the start of September 2010 to settle matters.
Gaiman is a major supporter and board member of the Comic Book Legal Defense Fund.
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