By: Taylor Pernini
The Supreme Court recently received a petition for a writ of cert from the Moodsters Company, which sued Disney for copyright infringement over the emotional characters from the movie “Inside Out”. The Supreme Court has never ruled on character copyright, making the jurisprudence a mess of conflicting circuit tests. The Moodsters lost at the Ninth Circuit under the stringent Towle test and now allege that none of the current circuit tests fit the key purposes of copyright. They might be right—the Supreme Court’s focus should be on uniqueness and originality—but it is still unlikely that they win under that standard. This blog will address the differing circuit tests, why each one suffers weaknesses in copyright law, and what the appropriate standard should be going forward.
In the early 2000s, Dr. Daniels developed a series of characters called the ‘moodsters,’ which were intended to help with children’s emotional development.[i] The moodsters consisted of five fuzzy characters, each representing a particular emotion and assigned a particular color: Happiness (yellow), Sadness (blue), Anger (red), Fear (green), and Love (pink).[ii] Some of these characters might sound familiar to those with young children or Disney+ subscriptions—and for good reason. The Walt Disney Company released the movie “Inside Out” in 2015, a film which featured five emotions as characters, each with a corresponding color: Joy (yellow), Sadness (blue), Anger (red), Disgust (green), and Fear (purple).[iii]
Subsequently, Dr. Daniels filed a suit for copyright infringement.[iv] She alleged that her team had pitched the moodsters concept to Disney multiple times between 2005 and 2009 and that Disney infringed on her copyright when it created the “Inside Out” characters.[v] Disney denied any infringement of the moodsters copyright and moved to dismiss.[vi] The district court granted the dismissal on the grounds that the characters were not protectable by copyright.[vii] The Ninth Circuit affirmed that holding.[viii] Now, The Moodsters Company, spearheaded by Dr. Daniels, is filing a petition for certiorari with the Supreme Court, alleging that the current state of character copyright in the federal circuits is “in chaos” and needs resolution in the form of a Supreme Court ruling.[ix]
In its petition, The Moodsters Company cites at least three conflicting circuit tests for character copyright.[x] The Ninth Circuit applies the Towle test, arguably the strictest test and under which the moodster characters failed, while the Second Circuit applies only a “sufficient delineation” test.[xi] The Seventh Circuit applies the lowest standard of all, only asking that the protected character be somewhat more than a stock character.[xii] Whether the moodsters would survive under these other tests is a matter for speculation, but each of the circuit tests set different standards. Given the goal of equal application of federal law across the circuits, this split could pose a serious problem.
Character Copyright, Generally
On their own, characters are not explicitly recognized as copyrightable works by the Copyright Act of 1976.[xiii]Yet, case law has developed a doctrine of character copyright where characters can be independently protected as creative works.[xiv] As early as 1930, Judge Learned Hand suggested that characters could be considered “quite independently of the plot.”[xv] For example, if someone wrote a spin-off story about Harry Potter, that story could infringe on J.K. Rowling’s copyright, even if the story only copied the character and no other elements of the Harry Potter series. This piecemeal sort of copyright allows authors to protect aspects of the original work even when divorced from the overall picture.
The Three-Way Circuit Split
Three different circuits have developed tests specifically for character copyright. Each of these tests purport to identify those characters which are developed enough on their own to justify protection independently from their sources. Yet the variety between these approaches is startling.
In DC Comics v. Towle, the Ninth Circuit attempted to develop a workable standard for protecting characters under copyright.[xvi] A car salesman designed and sold cars which resembled the 1966 and 1989 versions of the Batmobile, as well as Batmobile customization kits which buyers could use on their own cars.[xvii] DC Comics then sued the seller for copyright infringement.[xviii] The court grappled with whether the Batmobile could be a copyrightable character and found that it was.[xix] In an attempt to solidify the doctrine, the Towle court developed a three-part test.[xx] A character must 1) have “physical and conceptual qualities,” 2) be “sufficiently delineated,” and 3) contain some “unique elements of expression” which render them “especially distinctive.”[xxi] If a character satisfies all three requirements, it can be protected under copyright even if it lacks speech or sentience.[xxii] According to the Towle court, the Batmobile qualified.[xxiii] Even though this test protected an inanimate object in DC Comics v. Towle, it proves to be a fairly stringent standard.
First, the character must have “physical as well as conceptual qualities,” essentially meaning that the character must display physical characteristics to qualify, such as the general appearance of the Batmobile.[xxiv] However, this element does not require a literal visual representation of a character. The court noted that “a character may be protectable if it has distinctive character traits and attributes, even if the character does not maintain . . . physical appearance in every context.”[xxv] Basically, if you can form a clear mental image of the character, then they probably meet this element. Admittedly, this element could leave literary characters in a bit of lurch: absent an actual picture of the character contained within the book, how much visual description does the author need to use to make the character protected? Subsequent Ninth Circuit decisions have failed to clarify this point.[xxvi] For The Moodsters Company, this element was easily satisfied: the moodster characters are visually represented, so they have “physical and conceptual qualities” as required by the Towle test.[xxvii] But the physical qualities on their own do not necessarily ensure that the character is developed enough to justify an independent copyright.[xxviii] So, the Ninth Circuit turned to the next requirement.[xxix]
Second, the character must be “sufficiently delineated,” meaning that the character is consistently identifiable in a way that distinguishes it from others.[xxx] However, it is not particularly clear how consistent a character has to be: certainly the Batmobile has changed substantially over the years, yet the Ninth Circuit found it consistent enough to be “sufficiently delineated.”[xxxi] But the moodsters fail on this prong, according to the Ninth Circuit.[xxxii] Even though the moodsters consistently represent the same emotions and always fit the same color scheme, the court found that they were not “well-delineated,” primarily because their appearances had changed noticeably over the years, from spindly, bug-like characters to fuzzy characters that resembled teddy bears; their names changed as well.[xxxiii] Under this element, courts must determine which characters will be visually consistent enough to justify copyright protection and which characters are only “sketches” that cannot be protected by copyright, but it appears to be mostly a judgment call by the individual judge.[xxxiv]
The final element requires the character to “contain some unique elements of expression…[making it] especially distinctive”.[xxxv] This aspect of the Towle test seems best suited to a copyright analysis, requiring primarily that the character is unique from others.[xxxvi] Unfortunately for The Moodsters Company, it also seems to be the element which sounds the death knell on the infringement claim. Each moodster has some physical qualities and some consistent delineation, so those two prongs, despite the Ninth Circuit ruling, might be up for debate. But what is unique about an emotion as a character? Although the Ninth Circuit ruled on the prior two elements, this third element appears to be the one which actually guided its ruling: before it even gets to the uniqueness analysis, the court determined that The Moodsters Company “cannot copyright colors and emotions” and noted that “color and emotion are . . . frequent themes in children’s books.”[xxxvii] The court’s determination that the characters themselves were not unique bled over into every other aspect of the analysis even before the court explicitly addressed that prong of the Towle test.[xxxviii] The requirement of “unique elements of expression” turned out to be the dispositive element.[xxxix]
Comparatively, the Second Circuit applied a test that is essentially just the second prong of the Towle test: that the character be “sufficiently delineated.”[xl] This test suffers the same weaknesses as the second prong of the Towletest: we do not know how delineated a character needs to be.[xli] The test requires judges to base their decisions on almost arbitrary judgments of consistency.
The Seventh Circuit applied the broadest test, requiring the character to be something more than a “stock character.”[xlii] Theoretically, a work only needs to express a “minimal degree of creativity” in order to qualify for some kind of copyright protection, so maybe this test is the most consistent with copyright law.[xliii] However, it risks being too broad and has been subject to criticism on those grounds.[xliv] Given that character copyright already allows for characters to be protected independently from their original works, maybe the standard for which characters can be independently protected should be higher than minimally creative.
Character Copyright in the Supreme Court
The confused nature of character copyright across the federal circuits lends weight to The Moodster Company’s insistence that the Supreme Court resolve the doctrine. Whether the Supreme Court will take certiorari and what standard the Court will apply likely depends on the makeup of the Court by the next session. Although ideology is not outcome-determinative in intellectual property, conservative justices have historically been more likely to recognize and protect broader intellectual property rights.[xlv] Regardless, the Court should grant certiorari to resolve this massive circuit split and ensure uniformity in character copyright analysis. Furthermore, the Court should decline to apply the above three tests. Instead, the Court should strike a happy medium between the low Seventh Circuit stock character standard and the stringent Ninth Circuit Towle standard by determining that the primary inquiry in character copyright is whether the character is distinctive and unique.
While the Ninth Circuit does take that approach with the third prong of the Towle test, it muddies the water by concerning itself with physical qualities and sufficient delineation first. The physical qualities prong does little in the way of determining whether a character is developed enough to protect under copyright. This element was derived from a previous case’s requirement that a character must be pictorial, not theoretical, to justify protection.[xlvi] The purpose was to prevent protection of mere ideas, but courts have dealt with this requirement for a long time in copyright without always requiring a literal visual image.[xlvii] Otherwise, there would be no point to seeking a copyright in any novel that was not a picture book. All this element really does in character copyright cases is provide an additional hurdle for purely literary characters, which does not make much sense from a policy standpoint.
Furthermore, the sufficient delineation prong shifts the focus away from uniqueness to consistency. While it may make some sense to require a consistent identity in protectable characters, the sufficient delineation prong suffers from three severe weaknesses. First, it relies on arbitrary judgments: for example, the Ninth Circuit fails to fully explain why the Batmobile’s changes are acceptable but the moodsters’ changes are too much.[xlviii] Second, read strictly, the delineation requirement may prevent the development or altering of characters over time: if a character must stay the same to be protected under copyright, then copyright actively punishes those creators who alter their characters beyond the first installment. Third, the delineation requirement does nothing to guide the courts when the character is new: a character cannot be sufficiently consistent and identifiable to audiences if it only just came into existence, like the main character of a TV show in its pilot episode.
But copyright also demands a more stringent standard than the low bar of the Seventh Circuit. While a work need only be minimally creative for copyright, character copyright extends beyond the statutory language of the Copyright Act to create a zone of protection for particularly fundamental characters.[xlix] This extension suggests that a heightened standard should apply. Copyright certainly should not allow authors to protect minor characters independent from the plot: that standard would protect too much and could hamper creativity in characters.
Conversely, requiring unique and distinctive elements preserves the ultimate purpose of copyright: to protect original works from infringement.[l] The moodsters still fail under this analysis, but it is a failure which makes sense under existing copyright law: the concept of emotions in association with particular colors is not particularly unique, nor is it especially distinctive. Dr. Daniels is not even the first creator to sue Disney over the same exact characters, and at least one other creator anthropomorphizes personality traits in a web series with the same general premise.[li] The Supreme Court needs to resolve this circuit split, and a unique and distinctive elements requirement is the most effective way to do that without compromising the key purposes of copyright.
[iii] Id. at 1152.
[viii] Id. at 1151.
[ix] Petition for Writ of Certiorari at *14, Moodsters Co. v. Walt Disney Co., No. 18-55635, (petition for cert. filed Aug. 7, 2020).
[x] Id. at *3.
[xi] DC Comics v. Towle, 802 F.3d 1012, 1021 (9th Cir. 2015); see, e.g., Silverman v. CBS Inc., 870 F.2d 40, 50 (2d Cir. 1989).
[xiii] 17 U.S.C.S. §102 (2020).
[xiv] See, e.g., Nichols v. Universal Pictures Corp. 45 F.3d 119, 121 (2d. Cir. 1930).
[xv] Katherine Alphonso, Note, DC Comics v. Towle: To The Batmobile! Which Fictional Characters Deserve Protection Under Copyright Law, 47 Golden Gate U.L. Rev. 5, 9 (2017) (quoting Nichols, 45 F.2d at 121).
[xvi] DC Comics, 802 F.3d at 1021.
[xvii] Id. at 1017.
[xix] Id. at 1022.
[xx] Id. at 1021.
[xxiii] Id. at 1022.
[xxiv] Id. at 1021 (quoting Walt Disney Prods. v. Air Pirates, 581 F.2d 751, 755 (9th Cir. 1978)).
[xxv] Id. at 1020 (noting the Eighth Circuit also recognized that “distinctive qualities apart from visual appearance can . . . negate the need for consistent visual appearance” in Warner Bros. Entm’t, Inc. v. X One X Prods., 644 F.3d 584, 599 n.8 (8th Cir. 2011)).
[xxvi] See, e.g., Direct Techs., LLC v. Elec. Arts, Inc., 836 F.3d 1059, 1068 (9th Cir. 2016) (which focused on the number of sides on the “PlumbBob” shape in the Sims video game in determining whether it had a distinctive visual appearance).
[xxvii] Daniels, 952 F.3d at 1153; DC Comics, 802 F.3d at 1021.
[xxviii] Daniels, 952 F.3d at 1153.
[xxx] DC Comics, 802 F.3d at 1021 (quoting Rice v. Fox Broad. Co., 330 F.3d 1170, 1175 (9th Cir. 2003)).
[xxxi] Id. at 1019.
[xxxii] Daniels, 952 F.3d at 1153.
[xxxiii] Id. at 1154-1155.
[xxxiv] Id. at 1153 (quoting Olson v. Nat’l Broad Co., 855 F.2d 1446, 1452-1453 (9th Cir. 1988)).
[xxxv] DC Comics, 802 F.3d at 1021 (quoting Halicki Films, LLC v. Sanderson Sales & Mktg., 547 F.3d 1213, 1224 (9th Cir. 2008)).
[xxxvii] Daniels, 952 F.3d at 1153.
[xxxix] DC Comics, 802 F.3d at 1019 (citing Detective Comics, Inc. v. Bruns Publ’ns,
Inc., 111 F.2d 432 (2d Cir.1940)).
[xl] See Silverman, 870 F.2d 40.
[xli] Alphonso, supra note xv, at 10.
[xlii] Gaiman v. McFarlane, 360 F.3d 644, 660 (7th Cir. 2004) (“As long as the character is distinctive, other authors can use the stock character out of which it may have been built.”).
[xliii] Hartwell Harris Beall, Can Anyone Own a Piece of the Clock?: The Troublesome Application of Copyright Law to Works of Historical Fiction, Interpretation, and Theory, 42 Emory L.J. 253, 272 (1993); see, e.g., Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 345 (1991).
[xliv] Missy G. Brenner, Comment, Shadow of the Bat: Character Copyright After DC Comics v. Towle, 57 Santa Clara L. Rev. 481, 487 (2017). (“The Seventh Circuit has illustrated the slippery slope that arises in determining whether a character is stock or original.”).
[xlv] Matthew Sag et al., Article, Ideology and Exceptionalism in Intellectual Property: An Empirical Study, 97 Calif. L. Rev. 801, 803 (2009).
[xlvi] Michael Deamer, Note, DC Comics v. Towle: Protecting Fictional Characters through Stewardship, 32 Berkeley Tech. L.J. 437, 450 (2017).
[xlvii] This requirement is actually baked into the Copyright Act of 1976. See 17 U.S.C.S § 102 (“In no case does copyright protection for an original work of authorship extend to any idea . . . [or] concept.”).
[xlviii] Daniels v. Walt Disney Co., 952 F.3d 1149, 1155 (9th Cir.), reh’g denied, 958 F.3d 769 (9th Cir. 2020).
[xlix] Beall, supra note xliii, at 272; see also Warner Bros. Pictures v. CBS, 216 F.2d 945, 950 (9th Cir. 1954) (where the court acknowledged that under some circumstances, the character might be so fundamental to the narrative as to constitute the story being told).
[l] 17 U.S.C.S § 102 (“Copyright protection subsists . . .in original works of authorship fixed in any tangible medium of expression”).
[li] Gabrielle Russon, Lake Mary man accuses Disney of stealing ‘Inside Out’ idea, Orlando Sentinel (June 5, 2018), https://www.orlandosentinel.com/business/tourism/os-cfb-disney-lawsuit-inside-out-20180605-story.html. See, e.g., The Sanders Sides Series, https://www.youtube.com/playlist?list=PLYA7DZ_sbUzvB1l6KsO5LZV2rrk2u1xl4 (last visited October 12, 2020).