Cultural Icons Spawn Lawsuits Worth Close Looks

According to the allegations in the Phillies' complaint, in 1978 Phillies executive vice president Bill Giles and other Phillies personnel worked with an outside company, Harrison/Erickson (H/E), to develop a costume for a new Phillies mascot. H/E is a New York design firm specializing in character design and development and is known for its work in creating the appearances of many professional sports mascots. Its principal, Bonnie Erickson, created and designed Miss Piggy, among other well-known Muppet characters.

To summarize some of the complaint allegations, license agreements between H/E and the Phillies, entered into in 1978 and 1979, covered the Phillies' initial use of the Phillie Phanatic costume. In 1984, H/E terminated the 1979 license agreement and the parties negotiated a 1984 assignment of all of H/E's rights in the Phanatic costume to the Phillies "forever." The Phillies' complaint asserts that in June 2018, the Phillies received a letter from H/E's attorneys purporting to give notice of termination of the 1984 assignment. According to the Phillies' complaint, the letter stated that H/E could potentially "make the Phanatic a free agent."

This has raised a number of questions under copyright law. For example, if the 1984 assignment said that it gave the Phillies the rights to the Phillie Phanatic "forever," how could H/E seek to terminate that assignment? Could the Phillies really lose their beloved and iconic Phanatic, and perhaps even more tragically, see the Phanatic capering for a competing baseball team?

To properly consider the question of "when is forever not forever?" under copyright law, one must revisit §203 of the U.S. Copyright Act, "Termination of transfers and licenses granted by the author." Under §203, for a copyright license or assignment executed on or after Jan. 1, 1978, the author or the author's heirs have the right to terminate such a grant after 35 years from the date of execution of the grant. This section of the U.S. Copyright Act gives authors a chance to regain control of their creative works. After 35 years, an author may terminate that original contract, even with perpetuity language, and may have much more bargaining power at a later stage in his or her career.

According to allegations of the Phillies complaint, H/E had already terminated the earlier Phillie Phanatic-related license with the Phillies. Therefore, the Phillies allege H/E should not be given another chance to terminate a Phillie Phanatic-related 1984 assignment.

The complaint also claims that the Phillies are at least co-authors of the Phillie Phanatic costume because Phillies' personnel contributed expressive content to the design of the mascot character. Under the Copyright Act, when multiple authors create a single "joint work" with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole, each contributing author has equal copyrights to the "joint work." Thus, the Phillies allege, by dictating elements of the Phillies Phanatic character (e.g., green color, large waistline and large nose), they have joint copyrights.

In addition, the Phillies allege that the original copyright registration filed by H/E with the Copyright Office was filed improperly because it described the Phillie Phanatic costume display as an "artistic sculpture." While sculptures may be protected by copyright, costume designs, with some very specific exceptions, are not generally copyrightable, as they are considered to be "useful articles." In Star Athletica v. Varsity Brands, 137 S. Ct. 1002 (2017), the U.S. Supreme Court held that the features of a "useful article" such as a cheerleading uniform, could be eligible for copyright protection if the features could be perceived as two- or three-dimensional works of art separate from the article, and would qualify as protectable pictorial, graphic or sculptural works if imagined separately from the useful article. Here, the Phillies effectively claim that the copyright registration was for a costume and was only obtained by miscategorizing the work.

From a practical standpoint, if the Phillie Phanatic were to "become a free agent" and move to another team, the character would likely, at a minimum, need to be renamed. While copyrights protect works of authorship, do not forget that trademarks protect words, names, symbols or designs used in commerce to identify and distinguish the goods or services of one seller from those of another and to indicate the source of the goods or services. Even if H/E regains the copyright to the appearance of the originally designed Phillie Phanatic costume, the Phillies remain the owners of numerous federal trademark registrations to the name "Phillie Phanatic" as well as the owners of the trademark registrations to two-dimensional logos of the Phillie Phanatic. The trademark rights, which belong to the owner who uses such trademarks in commerce, would not "leave" with the costume. This presents an interesting question for the court and for the parties to the lawsuit.

Of course, most Phillies fans would hate to see the Phanatic in another uniform with another name or cheer for a new mascot named the Phillie Phanatic with a completely different aesthetic than the friendly green giant fans have become accustomed to. Fans will have to wait to see if the parties play ball.

The California federal court lawsuit involves the whistle jingle from Old Spice television. Procter & Gamble (P&G), proprietors of the Old Spice brand, did not create the whistle jingle and does not own the copyright to the jingle composition. Rather, P&G entered into a license agreement with the whistle jingle's original composer and performer to use the jingle in its advertising campaigns.

The original creator of the whistle jingle is award-winning composer and performer H. Scott Salinas, who has composed numerous original scores and compositions for TV and film. The license agreement that Salinas and P&G entered into expired, and Salinas now contends that P&G has continued to use a recording of a whistling tune that is nearly identical to the one he created.

Salinas filed a federal copyright and trademark lawsuit in the U.S. District Court for the Central District of California against Procter & Gamble alleging that P&G exceeded the scope of the original license to use the whistle jingle, and thus misappropriated and unlawfully exploited Salinas' creation through P&G's Old Spice advertising campaigns.

In Salinas v. Procter & Gamble Co., 2:19-cv-06794, Salinas alleges in his complaint that once the license period ended, P&G continued to use an audio work in the Old Spice marketing campaign that is "strikingly similar or identical" to Salinas' whistle. The complaint includes waveform images comparing Salinas' whistle and the allegedly infringing whistle to establish striking similarity.

This lawsuit includes an intellectual property law issue somewhat akin to the copyright/trademark issues in the Phillie Phanatic lawsuit. It is possible, in certain instances, to obtain an audio trademark registration in a sound or combination of musical notes. Despite Salinas' copyright ownership of the whistle jingle, in 2016 P&G obtained an audio trademark registration for the same whistle jingle sound created by Salinas.

Salinas alleges in his complaint that P&G misrepresented having rights and his consent to register the whistle jingle in order to obtain the trademark registration from the U.S. Patent and Trademark Office (USPTO). The USPTO, according to Salinas, improperly issued the registration and therefore the registration must be canceled.

Additionally, Salinas claims that P&G's use of the new whistle in advertising amounts to trademark infringement, false advertising and false designation of origin in violation of the federal Lanham Act. The issue is whether the consuming public would be likely to confuse the whistle jingle and the new P&G whistle.

A well-known commercial jingle that has pervaded the public consciousness can of course be an invaluable marketing tool. Only time will tell if Salinas' ship comes in on this lawsuit.

While it remains to be seen how Salinas' and the Philles' cases will be resolved, they demonstrate the need to fully address intellectual property concerns at the outset of a joint commercial undertaking.

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Michael F. Snyder, a shareholder at Volpe and Koenig in Philadelphia, PA, focuses his practice on assisting clients with overall intellectual portfolio management including patent, trademark and copyright prosecution and litigation. He also assists clients with due diligence matters including intellectual property licensing and acquisitions. Laura S. Lipschutz, a law clerk at the firm, helped in the preparation of this article.