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Intellectual Property

Ninth Circuit Misunderstands Aesthetic Functionality

In Fleischer Studios, Inc. v. A.V.E.L.A., Inc., 636 F.3d 1115 (9th Cir. Cal. 2011) [enhanced version available to lexis.com subscribers / unenhanced version available from lexisONE Free Case Law], the Ninth Circuit misapplied the doctrine of aesthetic functionality, flinging the door wide open for infringers and counterfeiters to use valuable logos with impunity. The court also misunderstood the Supreme Court's holding in Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (U.S. 2003) [enhanced version / unenhanced version]. In this Analysis, Anne Gilson LaLonde will look first at the aesthetic functionality issue then turn to the Ninth Circuit's interpretation of Dastar. She writes:

The Facts of Fleisher

     Max Fleisher created the character of Betty Boop and in 1930, his company began making cartoons in which she featured. In the 1940s, the company dissolved soon after it sold its rights in the character. In the 1970s, Fleischer's family incorporated as a new entity and tried to regain rights in Betty Boop.

     A.V.E.L.A., Inc. and other companies licensed the Betty Boop character to others for use with toys, t-shirts, handbags and other merchandise. The more recent iteration of Fleischer Studios sued defendants, claiming ownership in the character and both copyright and trademark rights. The district court found that Fleischer Studios did not have a valid copyright or a valid trademark in the Betty Boop cartoon character and therefore did not have standing to sue.

     The Ninth Circuit affirmed. As to the copyright claim, which is beyond the scope of this Commentary, the court found that Fleisher Studios had attempted to purchase a copyright in the character from a company that did not actually own the rights to it. For the trademark claim, the court concluded that defendants were not using the image as a trademark "but instead as a functional product" and found any of Fleischer's rights in the mark to be invalid. It also ruled that, because the Betty Boop copyright was in the public domain, Supreme Court precedent required the court to find that Fleischer did not therefore own trademark rights in the image.

     ....

The Dastar Mistake

     The Ninth Circuit made yet another basic error in its interpretation of trademark law when it held that, where a copyright is in the public domain, the formerly copyrighted image cannot serve as a trademark. In doing so, it relied on Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003), another case neither party cited. The Ninth Circuit interpreted Dastar as holding that "where a copyright is in the public domain, a party may not assert a trademark infringement action against an alleged infringer if that action is essentially a substitute for a copyright infringement action."

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