Go! Fight! Win! Designers Prevail as Supreme Court Extends Copyright Protection to Cheerleading Uniforms and Beyond

Author: Hazel Mae Pangan

On March 22, 2017, the U.S. Supreme Court issued its decision in Star Athletica, L.L.C. v. Varsity Brands, Inc., et al., Case No.15-866, a dispute over whether cheerleading uniform designs qualified for protection under the Copyright Act of 1976.  In the proceedings below, Varsity Brands, Inc. (“Varsity Brands”) sued Star Athletica, L.L.C. (“Star Athletica”) for copyright infringement of five cheerleading uniform designs for which Varsity Brands held 2-dimensional artwork copyrights. Using cheerleading uniforms as an example for what is arguably an expansion of copyright protection to the design of garments and clothing, the Court ultimately held that the designs were protectable.

Procedural History

Under Section 101 of the Copyright Act of 1976, the “pictorial, graphic, or sculptural features” of the “design of a useful article” may be copyright protected as works of art if the features “can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.” In this case, the district court granted summary judgment in favor of Star Athletica, holding that the designs were not protectable pictorial, graphic, or sculptural works subject to copyright protection. Rather, the designs simply served the “useful” or “‘utilitarian’ function of identifying the garments as cheerleading uniforms” and thus were not physically or conceptually separable from the “utilitarian” function of the uniform as required for copyright protection under Section 101.

On appeal, the Sixth Circuit Court of Appeals reversed, holding that the uniform designs were “‘separately identifiable’” because the designs could “‘appear side by side’” with a blank uniform—“‘one as a graphic design and one as a cheerleading uniform.’” Moreover, in the Sixth Circuit’s view, the “designs were ‘capable of existing independently’ because they could be incorporated onto the surface of different types of garments, or hung on the wall and framed as art.”

The Court’s Holding

The Supreme Court, with Justice Thomas writing for the majority, affirmed the Sixth Circuit’s reversal, and resolved a circuit split over the correct articulation of the separability test for useful articles. Relying on principles of statutory interpretation, the majority clarified that Sections 101 and 113(a) of the Copyright Act “make clear that copyright protection extends to pictorial, graphic, and sculptural works regardless of whether they were created as free-standing art or as features of useful articles.” The test is “whether the feature for which copyright protection is claimed would have been eligible for copyright protection as a pictorial, graphic, or sculptural work had it originally been fixed in some tangible medium other than a useful article before being applied to a useful article.” In other words, “a feature of the design of a useful article is eligible for copyright if, when identified and imagined apart from the useful article, it would qualify as a pictorial, graphic, or sculptural work either on its own or when fixed in some other tangible medium.” The focus of the test, according to the Court, is “on the extracted feature and not on any aspects of the useful article that remain after the imaginary extraction.” Accordingly, the Court expressly rejected the “physical” and “conceptual” separability distinction in the articulation of the test used by the lower courts, holding that it does not matter whether a feature is physically separable from the useful article because the separability test is only conceptual.

Under this test, the Supreme Court held that one could identify the decorations on the cheerleading uniform designs at issue in this case as “having pictorial, graphic, or sculptural qualities” and that if the “arrangement of colors, shapes, stripes, and chevrons on” the uniforms’ surface “were separated from the uniform and applied in another medium”—like a painter’s canvas—“they would qualify as ‘two-dimensional . . . works of . . . art’” under Section 101.

Marketplace Implications

Writing as amicus curiae in support of Varsity Brands, the Council of Fashion Designers of America (“CFDA”) urged the Court to affirm the Sixth Circuit’s holding that the uniform designs were copyright protectable because a contrary holding would have a “deleterious effect” on the ever-expanding $370 billion American fashion industry, leaving designers vulnerable to copyists and undermining the creativity and effort required for conceiving original fashion and apparel designs. For years, the CFDA and fashion industry have tried to secure legislation specifically granting increased copyright protection to fashion designs.

Under the Court’s majority holding, fashion and apparel designers now have more copyright protection available to them for their designs. Beyond cheerleading uniforms, the Court’s clarification of the separability test extends copyright protection to garments and apparel (and other useful articles and goods) bearing original designs that can be imagined as works of art separate from the useful article on which the designs are affixed.

For a copy of the Court’s slip opinion, click here.

The “Ballers” In Your Court: Defending Copyrightable Expression

HBO’s hit series Ballers came under attack in the U.S. District Court for the Central District of California by a copyright infringement claim filed by plaintiffs, the owners of an original copyrighted work entitled Off Season. The court, after a thorough comparison of the two works, determined plaintiffs failed to satisfy the extrinsic test of substantial similarity and dismissed the case with prejudice on July 25, 2016.¹

1. The Copyrighted Works at Issue

Beginning in May 2007, plaintiffs began sharing their original motion picture trailer, a shortened trailer, a screenplay, and a treatment of their story, the Off Season, with colleagues in the television industry. These materials consisted of four separate copyrights, which were the subject of plaintiffs’ single copyright infringement claim in this case.² According to the complaint, the Off Season materials found their way to a group of producers, a production company, Dwayne “The Rock” Johnson, Mark Wahlberg, and his manager, Stephen Levinson. In or around December 2008, Wahlberg, Johnson, and Levinson confirmed their interest in producing Off Season with plaintiffs, but negotiations ended when removing plaintiffs’ names from the credits became a condition of the proposed agreement.³

The Off Season tells the story of Nathaniel Brandon Hall (“NBH”), the owner of a nightclub called “The Off Season,” which caters to professional football’s elite clientele who need anonymity so that they may engage in their vices out of the public eye, including bribing a detective to ignore the prostitution, violence, and drugs that frequent the club.⁴ True to its name, the story line takes place entirely during professional football’s off season.

Ballers tells the story of Spencer Strasmore (“Strasmore”), a retired NFL linebacker who currently works for Anderson Financial, a finance management company with a newly opened sports division.⁵ Strasmore is played by lead actor, Dwayne Johnson, who counsels his young football protégés not to fall into the same financial mistakes he made during his career as a professional athlete.⁶ The general story line of Ballers also takes place entirely during professional football’s off season.⁷

Plaintiffs alleged that the Ballers television series borrowed heavily from the Off Season materials and that both works have substantial similarities in plot, setting, characters, theme, mood, dialogue, and pace.⁸ Plaintiffs depicted both works as “follo[wing] an African American football player who is essentially a business man who tries to monetize his friendships with other professional football players and athletes to help grow his business.”⁹ However, the court would find on defendants’ motion to dismiss that “the only actual alleged similarities between the two works relate to unprotected elements.”¹⁰ “[A]lthough there are some generic similarities between Ballers and the Off Season, there are no similarities between the actual objective details of the works.”¹¹

2. Ballers Defeats the Off Season’s Claims Under the Extrinsic Test

To demonstrate copyright infringement, a plaintiff must show “(1) ownership of a valid copyright, and (2) copying of constituent elements of that work that are original.”¹² Copying may be established by demonstrating (1) “that the [defendant] had access to plaintiff’s copyrighted work,” and (2) “that the works at issue are substantially similar in their protected elements.”¹³

Under Ninth Circuit law, courts employ a two-part test to determine if works are substantially similar: an intrinsic test and an extrinsic test.¹⁴ The intrinsic test is a subjective comparison of the total concept and feel of the two works, whereas the extrinsic test is an objective comparison of specific expressive elements which seeks to find “articulable similarities between the plot, themes, dialogue, mood, setting, pace, characters, and sequence of events in two works.”¹⁵ As was the case here, a court may dismiss a complaint on a 12(b)(6) motion for failing to satisfy the extrinsic test “because a jury may not find substantial similarity without evidence on both the extrinsic and intrinsic tests.”¹⁶

Because access was not in dispute and plaintiffs alleged that defendants read or viewed the Off Season materials, the court further applied the inverse ratio rule to plaintiffs’ claims.¹⁷ In so doing, the court “require[s] a lower standard of proof of substantial similarity when a high degree of access is shown.”¹⁸ Even under this liberal inverse ratio rule, plaintiffs failed to state a claim of copyright infringement because the alleged similarities between the protected elements of the works were not actual similarities that could result in a finding of substantial similarity under the extrinsic test.¹⁹

3. No Similarities Found Between the Actual Objective Details of the Works

The court engaged in a detailed analysis of plot, setting, characters, theme, mood, dialogue, pace and other miscellaneous alleged similarities between Ballers and the Off Season and held that the protectable elements of the works are significantly different.²⁰ By filtering out and disregarding non-protectable elements, the inquiry was “whether the protectable elements, standing alone” were substantially similar.²¹

Plaintiffs argued that when determining whether Ballers is substantially similar to the Off Season, the court must consider the Ballers script and disregard the television series.²² The court rejected this argument because “published works cause injury under copyright law, [therefore] courts consider the final version of a film, rather than unpublished scripts, when determining substantial similarity.”²³

Consequently, upon comparison of the Ballers television series and the Off Season materials that were distributed to defendants, the court found only a few actual similarities between the works, all of which were not protectable expression: (1) the stories are set entirely during professional football’s off season; (2) NBH and Strasmore are both well-dressed football players who are sexually promiscuous, drive fancy cars, and have a cocky attitude; and (3) the basic plot premise is a story about football players during the football off season.²⁴ Even NBH and Strasmore’s respective Latina love interests were held to be “stock characters,” not subject to copyright protection because they were not “sufficiently delineated and especially distinctive.”²⁵

4. Takeaways

Procedurally, the result of defendants’ motion to dismiss provides a powerful message for IP litigators: without specific allegations of extrinsic, objective similarities in copyrightable expression between competing works, a claim for copyright infringement is subject to dismissal with prejudice.²⁶ Plaintiffs’ complaint suffered from overarching generalities with respect to articulable similarities. Moreover, the court considered all the specific documents and materials referenced in the complaint, even though they were not attached to it, without converting defendants’ 12(b)(6) motion into a summary judgment motion.²⁷ This resulted in a comprehensive diagnosis of the content comprising the Off Season and Ballers story line in more than one format at an early stage in the proceedings. Even under a liberal inverse ratio standard, plaintiffs’ complaint failed to state a claim because copyright law “protects expression of ideas, not the ideas themselves,” stock scenes and themes “are not protected against copying.”²⁸

Whether on the offense or the defense, the distinct similarities of a copyrighted work should either be alleged with specificity on the one hand, or articulated with sufficient detail to show no substantial similarity on the other.
_______________________________________________________________________

¹ Everette Silas, et al. v. Home Box Office, Inc., et al., No. CV 15-9732-GW(FFMx), 2016 U.S. Dist. LEXIS 107944, at *57 (C.D. Cal. July 25, 2016).
² The court noted that although subject of four separate copyrights, it would discuss the Off Season as a whole on defendants’ motion to dismiss. However, the court conducted a separate evaluation of the treatment, screenplay, trailer, and 10 minute trailer in determining that the Off Season is not substantially similar to Ballers. Id. at n. 7.
³ Id. at *7.
⁴ Id. at *2-4.
⁵ Id. at *7.
⁶ Id. at *27-28.
⁷ Id. at *34-36.
⁸ Id. at *10, 23-24.
⁹ Id. at *26.
¹⁰ Id. at *23-24.
¹¹ Id. at *26.
¹² Feist Publ’ns, Inc. v. Rural Tel. Servs. Co., 499 U.S. 340, 361 (1991).
¹³ Cavalier v. Random House, Inc., 297 F.3d 815, 822 (9th Cir. 2002).
¹⁴ Id. at *22-23 (citing Cavalier, 297 F.3d at 822).
¹⁵ Cavalier, 297 F.3d at 822 (citing Kouf v. Walt Disney Pictures & Television, 16 F.3d 1042, 1045 (9th Cir. 1994)).
¹⁶ Home Box Office, Inc., 2016 U.S. Dist. LEXIS 107944, at *20-23 (quoting Kouf, 16 F.3d at 1045).
¹⁷ Id. at *22-23.
¹⁸ Three Boys Music Corp. v. Bolton, 212 F.3d 477, 485 (9th Cir. 2000).
¹⁹ Home Box Office, Inc., 2016 U.S. Dist. LEXIS 107944, at *23-24.
²⁰ Id. at *53-54.
²¹ Cavalier, 297 F.3d at 822 (quotations omitted) (emphasis in original).
²² Home Box Office, Inc., 2016 U.S. Dist. LEXIS 107944, at *14.
²³ Id. at *14-15 (citing Meta-Film Assocs., Inc. v. MCA, Inc., 586 F.Supp. 1346, 1360 (C.D. Cal. 1984)).
²⁴ Id. at *35-36, 41, 49
²⁵ Id. *42-44.
²⁶ See, e.g., Gilbert v. New Line Prods., Inc., No. CV 09-02231 RGK, 2009 U.S. Dist. LEXIS 130675, at *21 (C.D. Cal. Nov. 16, 2009) (dismissing plaintiff’s claim with prejudice after determining there was no substantial similarity because “no additional facts would allow [plaintiff] to prevail in her case”).
²⁷ Id. at *13-14 (citing Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005).
²⁸ Cavalier, 297 F.3d at 823 (citing Berkic v. Crichton, 761 F.2d 1289, 1293 (9th Cir. 1985)).

Ninth Circuit: An Exclusive Licensing Agent Has Standing to Bring an Infringement Action under the Copyright Act

In a recent decision, Minden Pictures, Inc. v. John Wiley & Sons, Inc., D.C. No. 3:12-CV-04601-EMC, 9th Cir. Case No. 14-15267, the Ninth Circuit Court of Appeals held that a licensing agent for several individual photographers has standing to bring an action under the Copyright Act against a textbook publisher for unauthorized use of copyrighted photographs. The Ninth Circuit found that the licensing agent held an “exclusive license” to reproduce and authorize production of the photographs even though the individual photographers retained the right to personal and limited commercial use of the photographs under the Agency Agreements. The Ninth Circuit held that the divisibility principle embodied in the Copyright Act allows for the licensing agent to have an “exclusive license” with respect to certain uses of the photographs and therefore it has standing to sue infringers.

Minden Pictures, Inc. (“Minden”) is a licensing agent for several individual photographers. Minden grants licenses to end-users such as textbook publishers. The Agency Agreements between Minden and the individual photographers provide that Minden is the sole and exclusive agent and representative with respect to licensing any of the subject images, and they grant Minden the unrestricted, exclusive right to distribute, license, and/or exploit the images without seeking special permission to do so. The Agency Agreements, however, allow the individual photographers to make some commercial and personal use of the photographs. The individual photographers are allowed to use the images for personal promotion, advertising, and editorial use in books and magazines. The Agency Agreements prohibit the individual photographers from hiring a licensing agent other than Minden with respect to the subject photographs. The Agency Agreements also provide that “all images shall at all times remain the sole and exclusive property of the photographer, including the copyright.”

Minden discovered that one of the licensees, an educational publisher named John Wiley & Sons (“Wiley”), was substantially exceeding the scope of the license with respect to the photographs by printing hundreds of thousands of textbooks in violation of the license agreement, which limits printing to only 20,000 copies. Minden filed a copyright infringement action in the U.S. District Court for the Northern District of California. Wiley moved for summary judgment on the grounds that Minden lack standing to sue under the Copyright Act, and the District Court agreed. Minden appealed to the Ninth Circuit.

The Ninth Circuit reversed, holding that the Agency Agreements conveyed a sufficient property interest in the photographs to permit it to bring an infringement action under the Copyright Act. First, the Court identified the relevant statutory language in the Copyright Act respect to standing: “[t]he legal or beneficial owner of an exclusive right under a copyright is entitled…to institute an action for judgment of that particular right committed while he or she is the owner of it.” These exclusive rights include the right to reproduce, distribute, or display the work, prepare derivative works, perform the work in public, and record and perform the work by means of an audio transmission. The Court noted that current Ninth Circuit case law holds that a party granted an assignment or an exclusive license with respect to these exclusive rights has statutory standing to sue for copyright infringement, but a party granted a mere “non[-]exclusive license” does not have standing.

The Court then identified several of the exclusive rights that were conveyed to Minden under the Agency Agreements: Minden received the right to authorize third parties to reproduce, distribute, and display the photographs. Of course, Wiley’s argument is that these rights were not exclusive because the individual photographers also retained similar rights to the photographs. The Court then explained the divisibility principle inherent in the Copyright Act, which permits an owner to transfer a right or a subdivision of a right—for example, if an author wished to sell publication rights of the hardcover edition to one person and publication rights to create a movie based on the novel to another person. The Court reasoned that the divisibility principle permits the individual photographers to divide the exclusive rights between themselves and Minden as their exclusive licensing agent. The rights have been divided in such a way that the individual photographers retain the right to issue licenses of the photographs, but that Minden receives the exclusive right to act as a licensing agent for licensing the photographs. The Court held that Minden’s exclusive right to act as a licensing agent constitutes an exclusive license and therefore entitles it to sue infringers under the Copyright Act.

Doctrinally, the Court relied on the divisibility principle, but it also articulated several practicality arguments in support of its holding. First, the Court noted that it would be inconsistent with common sense to hold that Minden did not have standing as the individual photographers’ exclusive licensing agent. If the individual photographers never hired a licensing agent and instead handled the licensing on their own, they would have standing to sue for infringement—thus, there should be no reason why having hired Minden to manage licensing of the photographs they would not be allowed to also have Minden protect and defend the licensed photographs.

Second, if Minden were to be precluded from suing, the individual photographers would be significantly disadvantaged by having to file individual actions or joined actions under Rule 20. In the former case, the potential recovery would not justify the litigation expense; and in the latter case, the complexities of coordinating all of the individual named plaintiffs would make litigation burdensome.

Therefore, the Court held that Minden, as the exclusive licensing agent, has standing to sue for infringement under the Copyright Act.

Beastie Boys’ Attorney’s Fee Award Will Likely Prompt Copyright Owners to Bring Their Copyright Claims to Court

On June 15, 2015, a New York federal court ordered Monster Energy to pay the Beastie Boys $667,849.14 in attorney’s fees. This award comes after the Beastie Boys obtained a $1.7 million damages award in 2014 after Monster Energy ran a promotional video on its website that incorporated portions of five Beastie Boys songs without the Beastie Boys’ permission. Monster Energy unsuccessfully argued that they had obtained a license from DJ Z-Trip to use the Beastie Boys remix. Z-Trip had previously entered into an agreement with the Beastie Boys to create a remix of some of their songs to promote the group’s then-upcoming album. However, the court found that Monster Energy never obtained authorization from the actual rights holders to the musical compositions or the sound recordings. The jury found Monster Energy’s actions to be willful copyright infringement as well as false endorsement under the Lanham Act and awarded $1.7 million in damages. On the heels of this damage award, the Beastie Boys petitioned the court for $2,385,175.50 in attorney’s fees. Though the attorney’s fee award was eventually whittled down to $667,849.14, due in part to the fact that (1) fees were not recoverable on the Lanham Act claims, (2) certain legal work on certain issues were not recoverable by Monster, and (3) the Beastie Boys’ bills were abnormally high since the case was primarily staffed using senior attorneys, the court noted that the fee award was still substantial and when coupled with the damages award, properly compensated the Beastie Boys under the Copyright Act.

As a result of this substantial attorney’s fee award, it is likely that other copyright owners may seek damages and attorney’s fees in court for the appropriation of their work. Rather than try to procure a monetary settlement or seek redress through ADR procedures, copyright owners may opt to pursue their claims in court in order to obtain an appropriate damage award and a substantial fee award. Thus, this decision may motivate copyright owners to seek redress under the Copyright Act in court since they have some assurances that their attorney’s fees or a substantial portion of those fees are recoverable.

Not Licensed To Ill: Why Your Corporate Marketing Employees Need Training on IP Licensing

The case, Beastie Boys et al v. Monster Energy Co, U.S. District Court, Southern District of New York, No. 12-06065 addressed the circumstances under which a corporate defendant can be held liable for acts of willful copyright infringement committed by its employees within the scope of their employment or for its benefit. In a Dec. 4 decision, U.S. District Judge Paul Engelmayer refused to throw out Beastie Boys’ $1.7 million jury verdict against Monster Beverage Corp over the energy drink company’s use of the hip-hop group’s music in a promotional video without permission.

That decision noted that the jury listened to testimony from the employee of Monster who prepared the offending video, where he admitted that he lacked any training in music licensing. Nevertheless, the Monster employee also testified he previously produced a dozen similar “recap” videos for Monster. In those earlier videos, the employee testified that he did contact the artists to seek permission to use the respective artists’ music. The Monster employee was therefore familiar with the process of seeking authorization. Notwithstanding this awareness, the Monster employee did not seek permission from the Beastie Boys or their manager to use their music, nor did he believe that anyone else at Monster had done so. Judge Englemayer held that the jury could thereby determine that the Monster employee acted in reckless disregard of the Beastie Boys rights when using the Beastie Boys’ music without authorization in the promotional video.

Judge Engelmayer’s decision concludes with the observation that “[a]s the Beastie Boys’ counsel noted in closing argument, Monster, at the time, did not perform any training of employees related to the use of copyrighted or trademarked content; it therefore left [the Monster employee] to his own devices in producing the video.” One must ask how Monster’s absence of music licensing training to its employees would have made any difference in this case, given the employee’s prior experience with, and habit of obtaining required authorization from the artists. The answer is simple: A corporate training program must implement compliance policies and procedures for requesting and securing material subject to license, with a direct report to corporate officers tasked with compliance.

The take away here is that the preparation of the offending video fell within the employee’s scope of work, for which no training was received, and his misdeeds were imputed to his employer. As noted in the decision, where the defendant is a corporation, it can be held liable for acts of willful infringement committed by its employees within the scope of their employment or for its benefit. See Sygma Photo News, Inc. v. High Soc. Magazine, Inc., 778 F.2d 89, 92 (2d Cir. 1985) (citing Shapiro, Bernstein & Co. v. H.L. Green Co., 316 F.2d 304, 308–09 (2d Cir. 1963)) (“All persons and corporations who participate in, exercise control over, or benefit from the infringement are jointly and severally liable as copyright infringers.”); Arista Records LLC v. Lime Grp. LLC, 784 F. Supp. 2d 398, 437 (S.D.N.Y. 2011) (same). “[A]n employer is responsible for copyright infringement committed by an employee in the course of employment, under the normal agency rule of respondeat superior.” U.S. Media Corp. v. Edde Enter., Inc., No. 94 Civ. 4849 (MBM)

Image courtesy of Flickr by Mike Mozart