Trademark Protection For Characters Outside Copyright

As the copyright terms of many iconic, character-based works of the 20th Century near closure, owners of these works face the question as to what extent they can enjoy exclusive rights in the characters they have created. Enterprising third parties raise the related question: Does the expiration of copyright mean these works and characters can be freely exploited? Once a copyright term lapses, an original work is said to pass into the public domain, available for all to freely copy and exploit. However, continued trademark protection for a character may delay or complicate the character's passage into the public domain. A careful analysis of fundamental principles of trademark and copyright law and relevant case law illuminate certain legal guideposts for navigating through the complexities of character protection.

Copyright v. Trademark

Although copyright and trademark law are often lumped together under the intellectual-property umbrella, they hold distinct legal underpinnings, policy objectives and rules of protection. Naturally, the two bodies operate independently of one another ' 'the presence or absence of one does not affect the other.' McCarthy, J. Thomas, McCarthy on Trademarks and Unfair Competition, 4th Edition, Sec. 6.5, Sec. 6.31 (West Group 1999).

The main purpose of copyright is to provide incentives to authors and artists, through the bestowal of certain exclusive rights for a limited period of time, to encourage the creation and dissemination of good works. While literary and cartoon characters are not expressly protectable under the U.S. Copyright Act, U.S. courts have recognized copyright protection in certain original character depictions, to the extent:

• They are fully developed and distinctively marked (Second Circuit test under Nichols v. Universal Pictures Corp., 45 F.2d 119, 7 U.S.P.Q. 84 (2d Cir. 1930), cert. denied, 282 U.S. 902 (1931)); or
• They are so well delineated as to constitute the 'story being told' (Ninth Circuit test under Warner Brothers Inc. v. Columbia Broad-scasting System, 216 F.2d 945 (9th Cir. 1954), cert. denied, 348 U.S. 971 (1955)).

Under these stringent standards, very few literary characters would be entitled to copyright protection. Pictorial and cartoon characters of particularly high stature, such as Superman, Mickey Mouse and Donald Duck, on the other hand, are far more likely to receive copyright protection because they contain visual, as well as conceptual attributes. See, Walt Disney Productions v. Air Pirates, 581 F.2d 751, 755 (9th Cir. 1978); Robert E. Rice v. Fox Broadcasting Co., 148 F. Supp. 2d 1029, 1055 (C.D.CA 2001).

In the U.S., federal trademark law under the Lanham Act protects 'any word, name, symbol, or device, or any combination thereof' used to distinguish the products or services of one source from those of others. Lanham Act, Secs. 1, 2 and 45, 15 U.S.C. Secs. 1051, 1052 and 1127. Trademark law responds to several public policy concerns:

• Public interest in avoiding consumer confusion;
• Trademark owners' 'intellectual property' rights in the names and designs that carry their good will; and
• Marketplace fairness and efficiency.

Without strong trademark protection, most businesses would be reluctant to invest in marketing and promoting artistic or literary works for fear that competitors would similarly label their own products and trade off their success. In this regard, the public policy goals of copyright and trademark complement, rather than conflict with, one another.

A character name or likeness is protectable under trademark law only to the extent that it is used to distinguish the products or services of one source from those of others. For trademarks (product marks), use of a mark must be on the products themselves or on packaging, labels, tags or point of sale materials. For service marks, the mark must be used in the advertising, promotion, or rendering of the service. In either case, the mark must be set apart on its own and create a distinctive, unified commercial impression, not simply to ornament a product, but to denote its unique source. Courts have long recognized the ability of stylized drawings of literary or cartoon characters to effectively perform that function. See, eg, In Re DC Comics Inc., 689 F.2d 1042, 215 U.S.P.Q. (BNA) 394 (U.S.C.C.P.A. 1982).

Unlike copyright, trademark rights in theory may endure in perpetuity for as long as a mark continues to be used and continues to function as an indicator of source. However, they may only be obtained and preserved through continuous, affirmative and diligent action by the trademark owner. When the owner stops using a mark and does not intend to resume use, trademark rights cease.

Impact of Trademark

Recognizing the separate and independent legal significance of copyright and trademark protection, courts have been mostly unmoved by the argument that public domain status diminishes a character's ability to function as a trademark. In assessing cases involving potentially overlapping copyright and trademark rights, one must clearly differentiate between the work itself and the identification or promotion of the work. Courts have long recognized that it is the public, commercial impact of a mark, either through its inherent, distinctive properties or through the successful efforts on the part of the trademark owner, that determines a mark's protectability.

In Frederick Warne & Co. v. Book Sales Inc., 481 F. Supp. 1191 (S.D.N.Y. 1979), the defendant book seller argued that because the Peter Rabbit stories and illustrations had passed into the public domain, the original publisher couldn't hold valid trademark rights in certain designs of Peter Rabbit depicted prominently on its book covers. Separating the public domain character and literary material from the source-identifying elements, the federal court for the Southern District of New York disagreed and held: 'The fact that a copyrightable character or design has fallen into the public domain should not preclude protection under the trademark laws so long as it is shown to have acquired independent trademark significance, identifying in some way the source or sponsorship of the goods.' Warne, 481 F.Supp. at 1196.

Finding dual protection particularly appropriate for graphic representations of characters, the court also distinguished between titles of public domain works, which may be essential to the effective distribution of the works, and cover illustrations, which aren't. Even when works are in the public domain, such as the Peter Rabbit story and character, it doesn't necessarily follow that copies of the works may be freely identified commercially to the public by names or graphic depictions from the works. As Warne acknowledges, '[t]he better rule would protect all book covers according to the same standards that govern traditional trade dress or packaging cases.'

In Walt Disney Productions v. Filmation Associates, 628 F. Supp. 871 (C.D.Cal. 1986), the defendant started producing a 'New Classics Collection' film series based upon the public domain stories of 'Pinocchio,' 'Alice in Wonderland' and 'Jungle Book.' Disney alleged that Filmation had come too close to the classic Disney film interpretations and appropriated its titles and character depictions to advertise and solicit sales of the film series. Despite the fact that the original stories were all in the public domain, the California federal district court held that there was a material issue of disputed fact as to whether the competitor's use of the titles and character depictions created a likelihood of consumer confusion as to the origin of the competitor's films. The court also noted that some of the factors for determining the likelihood of confusion ' including similarity of the marks, relatedness of the goods and marketing channels used ' were sufficient to establish that consumers could be confused by the advertisements. Filmation, 628 F. Supp. at 880.

As a prerequisite to a trademark-infringement claim in a copyrightable character, a plaintiff must first establish the existence of a valid, protectable mark. This means the character must be used as a trademark to identify a single source. Lanham Act Secs. 1, 2 and 45, 15 U.S.C. Secs. 1051, 1052 and 1127; Rice, 148 F. Supp. 2d at 1064 (C.D.CA 2001); See also, Brookfield Communications Inc. v. West Coast Entertainment Corp., 174 F.3d 1036, 1046 (9th Cir. 1999). This also means that the character must be used in ways that are more than 'merely ornamental.' The ability of character designs to serve a source-identifying function is presumed when the design is used in normal trademark ways; for example, on tags or labels attached to products, on packaging, or on the covers or spines of books, where consumers are accustomed to seeing the identifying marks of the manufacturer or sponsor.

Similarly, in order for there to be a finding of trademark infringement, the allegedly infringing use must also constitute trademark use. A trademark must be conspicuously set apart from other word or design elements to create a unitary and distinctive commercial impression, so that consumers will identify the mark with a unique source of the products or services. For example, 'The Three Stooges' in bold lettering on billboards advertising a film festival or on T-shirt labels would constitute trademark usage. However, that would not be the case if the same words only appeared embedded in advertising text: 'Your family will love watching the Three Stooges take on the Keystone Cops.'

The Three Stooges and Zorro

In Comedy III Productions v. New Line Cinema, 200 F.3d 593 (9th Cir. 2000), the Ninth Circuit weighed these principles against the plaintiff's trademark infringement claim. The issue was whether a 30-second portion of a public domain 'Three Stooges' film appearing on a background television set in the film 'The Long Kiss Goodnight' infringed Comedy III's limited rights in the name and certain likenesses of 'The Three Stooges.' Comedy III alleged trademark rights in not only the name and certain logo depictions, but also in the Three Stooges film clip itself. Applying the two-prong validity and infringement test, the court concluded that Comedy III failed the first prong: The film clip didn't have either the distinctiveness or secondary meaning required to function as a valid trademark.

Acknowledging that trademark rights in a film clip might be possible in different contexts, the court nevertheless concluded that Comedy III hadn't articulated a trademark interest in the clip to prevent New Line from using it in a motion picture. If the same 30-second clip were used in a commercial to advertise consumer goods, there might have been a different outcome.

In Sony Pictures Entertainment Inc. v. Fireworks Entertainment Group Inc., 137 F. Supp. 2d 1177 (C.D. CA 2001), the plaintiff attempted to assert trademark rights in the public domain character Zorro merely based on its uses within dramatic works. However, the plaintiff failed to evidence any actual uses of the Zorro name or likeness as a trademark. The court rejected the claim, stating: 'Given that Plaintiffs cannot point to a specific mark at issue, and that it is unclear whether Plaintiffs have the right to license the character Zorro, Plaintiff's trademark claim at this time remains undefined and unfocused.'

It is clear from both case law and fundamental principals of trademark and copyright law that trademark rights in character names or likeness will be examined by courts in much the same way that other marks are examined, by paying close attention to whether the character name or likeness properly functions as a unique identifier of source for a particular product or service. The question of whether the character may or may not have once been protected under copyright is largely irrelevant to the trademark analysis.

As the copyright terms of many iconic, character-based works of the 20th Century near closure, owners of these works face the question as to what extent they can enjoy exclusive rights in the characters they have created. Enterprising third parties raise the related question: Does the expiration of copyright mean these works and characters can be freely exploited? Once a copyright term lapses, an original work is said to pass into the public domain, available for all to freely copy and exploit. However, continued trademark protection for a character may delay or complicate the character's passage into the public domain. A careful analysis of fundamental principles of trademark and copyright law and relevant case law illuminate certain legal guideposts for navigating through the complexities of character protection.

Copyright v. Trademark

Although copyright and trademark law are often lumped together under the intellectual-property umbrella, they hold distinct legal underpinnings, policy objectives and rules of protection. Naturally, the two bodies operate independently of one another ' 'the presence or absence of one does not affect the other.' McCarthy, J. Thomas, McCarthy on Trademarks and Unfair Competition, 4th Edition, Sec. 6.5, Sec. 6.31 (West Group 1999).

The main purpose of copyright is to provide incentives to authors and artists, through the bestowal of certain exclusive rights for a limited period of time, to encourage the creation and dissemination of good works. While literary and cartoon characters are not expressly protectable under the U.S. Copyright Act, U.S. courts have recognized copyright protection in certain original character depictions, to the extent:

• They are fully developed and distinctively marked (Second Circuit test under Nichols v. Universal Pictures Corp ., 45 F.2d 119, 7 U.S.P.Q. 84 (2d Cir. 1930), cert. denied , 282 U.S. 902 (1931)); or
• They are so well delineated as to constitute the 'story being told' (Ninth Circuit test under Warner Brothers Inc. v. Columbia Broad-scasting System , 216 F.2d 945 (9th Cir. 1954), cert. denied , 348 U.S. 971 (1955)).

Under these stringent standards, very few literary characters would be entitled to copyright protection. Pictorial and cartoon characters of particularly high stature, such as Superman, Mickey Mouse and Donald Duck, on the other hand, are far more likely to receive copyright protection because they contain visual, as well as conceptual attributes. See, Walt Disney Productions v. Air Pirates , 581 F.2d 751, 755 (9th Cir. 1978); Robert E. Rice v. Fox Broadcasting Co. , 148 F. Supp. 2d 1029, 1055 (C.D.CA 2001).

In the U.S., federal trademark law under the Lanham Act protects 'any word, name, symbol, or device, or any combination thereof' used to distinguish the products or services of one source from those of others. Lanham Act, Secs. 1, 2 and 45, 15 U.S.C. Secs. 1051, 1052 and 1127. Trademark law responds to several public policy concerns:

• Public interest in avoiding consumer confusion;
• Trademark owners' 'intellectual property' rights in the names and designs that carry their good will; and
• Marketplace fairness and efficiency.

Without strong trademark protection, most businesses would be reluctant to invest in marketing and promoting artistic or literary works for fear that competitors would similarly label their own products and trade off their success. In this regard, the public policy goals of copyright and trademark complement, rather than conflict with, one another.

A character name or likeness is protectable under trademark law only to the extent that it is used to distinguish the products or services of one source from those of others. For trademarks (product marks), use of a mark must be on the products themselves or on packaging, labels, tags or point of sale materials. For service marks, the mark must be used in the advertising, promotion, or rendering of the service. In either case, the mark must be set apart on its own and create a distinctive, unified commercial impression, not simply to ornament a product, but to denote its unique source. Courts have long recognized the ability of stylized drawings of literary or cartoon characters to effectively perform that function. See, eg, In Re DC Comics Inc., 689 F.2d 1042, 215 U.S.P.Q. (BNA) 394 (U.S.C.C.P.A. 1982).

Unlike copyright, trademark rights in theory may endure in perpetuity for as long as a mark continues to be used and continues to function as an indicator of source. However, they may only be obtained and preserved through continuous, affirmative and diligent action by the trademark owner. When the owner stops using a mark and does not intend to resume use, trademark rights cease.

Impact of Trademark

Recognizing the separate and independent legal significance of copyright and trademark protection, courts have been mostly unmoved by the argument that public domain status diminishes a character's ability to function as a trademark. In assessing cases involving potentially overlapping copyright and trademark rights, one must clearly differentiate between the work itself and the identification or promotion of the work. Courts have long recognized that it is the public, commercial impact of a mark, either through its inherent, distinctive properties or through the successful efforts on the part of the trademark owner, that determines a mark's protectability.

In Frederick Warne & Co. v. Book Sales Inc., 481 F. Supp. 1191 (S.D.N.Y. 1979), the defendant book seller argued that because the Peter Rabbit stories and illustrations had passed into the public domain, the original publisher couldn't hold valid trademark rights in certain designs of Peter Rabbit depicted prominently on its book covers. Separating the public domain character and literary material from the source-identifying elements, the federal court for the Southern District of New York disagreed and held: 'The fact that a copyrightable character or design has fallen into the public domain should not preclude protection under the trademark laws so long as it is shown to have acquired independent trademark significance, identifying in some way the source or sponsorship of the goods.' Warne, 481 F.Supp. at 1196.

Finding dual protection particularly appropriate for graphic representations of characters, the court also distinguished between titles of public domain works, which may be essential to the effective distribution of the works, and cover illustrations, which aren't. Even when works are in the public domain, such as the Peter Rabbit story and character, it doesn't necessarily follow that copies of the works may be freely identified commercially to the public by names or graphic depictions from the works. As Warne acknowledges, '[t]he better rule would protect all book covers according to the same standards that govern traditional trade dress or packaging cases.'

In Walt Disney Productions v. Filmation Associates , 628 F. Supp. 871 (C.D.Cal. 1986), the defendant started producing a 'New Classics Collection' film series based upon the public domain stories of 'Pinocchio,' 'Alice in Wonderland' and 'Jungle Book.' Disney alleged that Filmation had come too close to the classic Disney film interpretations and appropriated its titles and character depictions to advertise and solicit sales of the film series. Despite the fact that the original stories were all in the public domain, the California federal district court held that there was a material issue of disputed fact as to whether the competitor's use of the titles and character depictions created a likelihood of consumer confusion as to the origin of the competitor's films. The court also noted that some of the factors for determining the likelihood of confusion ' including similarity of the marks, relatedness of the goods and marketing channels used ' were sufficient to establish that consumers could be confused by the advertisements. Filmation, 628 F. Supp. at 880.

As a prerequisite to a trademark-infringement claim in a copyrightable character, a plaintiff must first establish the existence of a valid, protectable mark. This means the character must be used as a trademark to identify a single source. Lanham Act Secs. 1, 2 and 45, 15 U.S.C. Secs. 1051, 1052 and 1127; Rice, 148 F. Supp. 2d at 1064 (C.D.CA 2001); See also, Brookfield Communications Inc. v. West Coast Entertainment Corp ., 174 F.3d 1036, 1046 (9th Cir. 1999). This also means that the character must be used in ways that are more than 'merely ornamental.' The ability of character designs to serve a source-identifying function is presumed when the design is used in normal trademark ways; for example, on tags or labels attached to products, on packaging, or on the covers or spines of books, where consumers are accustomed to seeing the identifying marks of the manufacturer or sponsor.

Similarly, in order for there to be a finding of trademark infringement, the allegedly infringing use must also constitute trademark use. A trademark must be conspicuously set apart from other word or design elements to create a unitary and distinctive commercial impression, so that consumers will identify the mark with a unique source of the products or services. For example, 'The Three Stooges' in bold lettering on billboards advertising a film festival or on T-shirt labels would constitute trademark usage. However, that would not be the case if the same words only appeared embedded in advertising text: 'Your family will love watching the Three Stooges take on the Keystone Cops.'

The Three Stooges and Zorro

In Comedy III Productions v. New Line Cinema , 200 F.3d 593 (9th Cir. 2000), the Ninth Circuit weighed these principles against the plaintiff's trademark infringement claim. The issue was whether a 30-second portion of a public domain 'Three Stooges' film appearing on a background television set in the film 'The Long Kiss Goodnight' infringed Comedy III's limited rights in the name and certain likenesses of 'The Three Stooges.' Comedy III alleged trademark rights in not only the name and certain logo depictions, but also in the Three Stooges film clip itself. Applying the two-prong validity and infringement test, the court concluded that Comedy III failed the first prong: The film clip didn't have either the distinctiveness or secondary meaning required to function as a valid trademark.

Acknowledging that trademark rights in a film clip might be possible in different contexts, the court nevertheless concluded that Comedy III hadn't articulated a trademark interest in the clip to prevent New Line from using it in a motion picture. If the same 30-second clip were used in a commercial to advertise consumer goods, there might have been a different outcome.

In Sony Pictures Entertainment Inc. v. Fireworks Entertainment Group Inc., 137 F. Supp. 2d 1177 (C.D. CA 2001), the plaintiff attempted to assert trademark rights in the public domain character Zorro merely based on its uses within dramatic works. However, the plaintiff failed to evidence any actual uses of the Zorro name or likeness as a trademark. The court rejected the claim, stating: 'Given that Plaintiffs cannot point to a specific mark at issue, and that it is unclear whether Plaintiffs have the right to license the character Zorro, Plaintiff's trademark claim at this time remains undefined and unfocused.'

It is clear from both case law and fundamental principals of trademark and copyright law that trademark rights in character names or likeness will be examined by courts in much the same way that other marks are examined, by paying close attention to whether the character name or likeness properly functions as a unique identifier of source for a particular product or service. The question of whether the character may or may not have once been protected under copyright is largely irrelevant to the trademark analysis.