Declaratory judgments are permitted but are limited, to avoid transgressing U.S. Const. art. III, to cases of actual controversy, 28 U.S.C.S. § 2201(a), that is, actual legal disputes.
Arthur Conan Doyle published his first Sherlock Holmes story in 1887 and his last in 1927. There were 56 stories in all, plus 4 novels. As a result of statutory extensions of copyright protection culminating in the 1998 Copyright Term Extension Act, the American copyrights on those final stories (copyrights owned by Doyle's estate, the appellant) will not expire until 95 years after the date of original publication—between 2018 to 2022, depending on the original publication date of each story. The copyrights on the other 46 stories and the 4 novels, all being works published before 1923, have expired as a result of a series of copyright statutes well described in Societe Civile Succession Guino v. Renoir, 549 F.3d 1182, 1189-90 (9th Cir. 2008). Once the copyright on a work expires, the work becomes a part of the public domain and can be copied and sold without need to obtain a license from the holder of the expired copyright. Leslie Klinger, the appellee in this case, co-edited an anthology called A Study in Sherlock: Stories Inspired by the Sherlock Holmes Canon (2011). Klinger’s publisher obtained a license to do so from the Conan Doyle Estate, Ltd. for $5000. Klinger and his co-editor decided to create a sequel to A Study in Sherlock, to be called In the Company of Sherlock Holmes. If Klinger did not pay for a license for the sequel, the Doyle Estate threatened to block distribution of the sequel. Klinger sued the Doyle Estate, seeking a declaratory judgment that Klinger was entitled to use material from the pre-1923 Sherlock Holmes stories that were no longer under copyright. The district court issued Klinger a declaratory judgment, and the Doyle Estate appealed.
Did the the district court have subject-matter jurisdiction considering there was no actual case or controversy between the parties?
Had Klinger had no idea how the Doyle estate would react to the publication of In the Company of Sherlock Holmes, he could not have sought a declaratory judgment, because he would not have been able to demonstrate that there was an actual dispute. He could seek advice, but not from a federal judge. But the Doyle estate had made clear that if Klinger succeeded in getting his book published the estate would try to prevent it from being sold by asking Amazon and the other big book retailers not to carry it, implicitly threatening to sue the publisher, as well as Klinger and his co-editor, for copyright infringement if they defied its threat. The twin threats—to block the distribution of the book by major retailers and to sue for copyright infringement—created an actual rather than merely a potential controversy. This is further shown by the fact that Klinger could have sued the estate for having committed tortious interference with advantageous business relations by intimidating his publisher.So he's been injured and seeks a judicial declaration that the conduct by the Doyle estate that caused the injury violated his legal rights because the threat was based on a groundless copyright claim. Only if Klinger obtains the declaration will he be able to publish his book without having to yield to what he considers extortion.