Sometimes the Yellow Brick Road is paved with gold, sometimes it isn’t. See Warner Bros. Entm’t, Inc. v. X One X Productions, 644 F. 3d 584 (8th Cir. 2011).
In 1939, Metro-Goldwyn-Mayer released two of the most famous films ever made, The Wizard of Oz and Gone With The Wind, and between 1940 and 1957 it debuted numerous Tom & Jerry short films (possibly my favorite cartoon of all time). Over the decades, the copyright interests in these properties have generated significant revenue for their various copyright owners, including current owner Warner Bros. Entertainment, Inc.
Prior to the completion of filming the two motion pictures, publicity photographs were taken of Dorothy, Tin Man, Cowardly Lion and Scarecrow from The Wizard of Oz, and Rhett Butler and Scarlett O’Hara from Gone With The Wind, all posing in costume. The photographs were reproduced in, and distributed in the form of, movie posters, lobby cards, still photos, press books and other materials by the original rights holder, Loew’s, Inc., MGM’s parent company. Similar publicity materials featuring the animated Tom and Jerry were also distributed. Some of the materials were included in high-circulation newspapers and magazines, such as The Saturday Evening Post, St. Louis Post-Dispatch, Chicago Tribune, Atlanta Journal, and Atlanta Constitution.
A.V.E.LA., Inc., X One X Productions, Inc., and Art-Nostalgia.com, Inc. (collectively “AVELA”) are companies that license vintage arts and entertainment images for merchandising. The dispute is set up by the court:
AVELA acquired restored versions of the movie posters and lobby cards for The Wizard of Oz, Gone with the Wind, and several Tom & Jerry short films. From these publicity materials, AVELA has extracted the images of famous characters from the films, including Dorothy, Tin Man, Cowardly Lion, and Scarecrow from The Wizard of Oz; Scarlett O’Hara and Rhett Butler from Gone with the Wind; and the eponymous Tom and Jerry. AVELA licenses the extracted images for use on items such as shirts, lunch boxes, music box lids, and playing cards, and as models for three-dimensional figurines such as statuettes, busts, figurines inside water globes, and action figures. In many cases, AVELA has modified the images, such as by adding a character’s signature phrase from the movie to an image modeled on that character’s publicity photograph. In other cases, AVELA has combined images extracted from different items of publicity material into a single product. In one example, a publicity photograph of Dorothy posed with Scarecrow serves as the model for a statuette and another publicity photograph of the “yellow brick road” serves as the model for the base of that same statuette.
Warner Bros. sued AVELA, claiming that such use of the extracted images infringes the copyrights for the films. Warner Bros. also asserted claims of, inter alia, trademark infringement and unfair competition. AVELA contended that the distribution of the publicity materials without copyright notice had injected them into the public domain, thus precluding any restrictions on their use. On cross-motions for summary judgment, the district court granted summary judgment to Warner Bros. on the copyright infringement claim and denied summary judgment to both parties on the trademark infringement and unfair competition claims.
At the time the films were authored, copyright ownership was governed by common law and the 1909 Copyright Act, a statute with some rather arcane provisions, the most controversial of which was the copyright notice requirement. Under the 1909 Act, failure to place a notice of copyright ownership on a work protected by common law copyright (something like: “© Copyright 1939, Loew’s, Inc., All Rights Reserved”) prior to general “publication” of the work caused the work to be injected into the public domain, making available for anyone to use without restriction.
The original owners of the copyrights in the films distributed the publicity materials without complying with the 1909 Act’s notice provisions, and Warner conceded it had no copyright ownership interest in the publicity materials. Warner also agreed not to assert copyright claims against the “unaltered reproductions of individual items of publicity material.” The district court thus chose not to consider whether the publicity materials were injected into public domain, holding instead that “even if the images were extracted from public domain materials, AVELA’s practice of modifying the extracted images for placement on retail products constituted infringement of the film copyrights.” Based on the district court’s finding of copyright infringement it entered a permanent injunction “against all use of publicity material images, except for exact duplication of individual items of publicity material.” AVELA appealed to the Eighth Circuit.
The Eighth Circuit’s analysis differed from the one employed by the district court, finding it necessary to first determine whether the materials were dedicated to the public domain.
Courts developed a “limited publication” doctrine to “lessen the sometimes harsh effect of the rule that publication destroyed common law rights.” Warner argued that the distribution of the publicity materials was merely a limited publication, not a general one. Drawing on decisions from the Ninth Circuit, the court considered whether the distribution of the images was “(1) to a definitely selected class of persons, (2) for a limited purpose, [and] (3) without the right of reproduction, distribution, or sale.” The court concluded that nature and scope of the distribution of the materials evinced an intent to dedicate the materials to the public.
The appellate court then turned to whether “AVELA appropriated original elements of the films, or solely elements that are in the public domain.” AVELA’s products were divided into three categories for analytical purposes: (i) exact reproductions of public domain materials, (ii) composite products comprising new arrangements of extracts from the public domain items, and (iii) three-dimensional products that are transformative representations of two-dimensional public domain materials (such as figurines or statuettes). The Eighth Circuit vacated the injunction as to the first category of products but affirmed the injunction with respect to the other two. The decision is available here.