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Warner Bros. Scores Another Victory in its Classic Movie Merchandising Suit

The Eighth Circuit Court of Appeals has bolstered Warner Bros.’ rights in images from famous classic films in a ruling from November 1st, in a case that goes back a full decade.

November 15, 2016

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The Eighth Circuit Court of Appeals has bolstered Warner Bros.’ rights in images from famous classic films in a ruling from November 1st, in a case that goes back a full decade.

AVELA, a company that sells vintage materials, acquired restored movie posters and lobby cards (known as the “publicity materials”), which were in the public domain, from Gone with the Wind and The Wizard of Oz, and Tom and Jerry shorts. The company extracted images of Dorothy, Tin Man, Cowardly Lion and Scarecrow from The Wizard of Oz, Scarlett O’Hara and Rhett Butler from Gone with the Wind, and Tom and Jerry. Then, it licensed them for use on products, including clothing, lunchboxes, playing cards, figurines, busts, and water globes. Warner Bros. owns the copyrights to Gone with the Wind, The Wizard of Oz, and Tom and Jerry, so in 2006 the film company filed a copyright and trademark complaint against AVELA.

In 2009, a district court granted Warner Bros.’ motion for summary judgment on the copyright infringement claims and a permanent injunction, ruling that AVELA could only use the images for creating exact duplicates of the publicity materials that were in the public domain. AVELA appealed that ruling, which the Eighth Circuit affirmed in part and reversed in part in 2011.

Back then, the court reviewed three categories of products that the images from the publicity materials were licensed for: (1) identical two-dimensional images, (2) those where the images were used with others from the same publicity materials or with a phrase from the movies, and (3) three-dimensional objects.

The Eighth Circuit held that “no visual aspects of the film characters in Gone with the Wind and The Wizard of Oz are in the public domain, apart from the images in the publicity materials themselves. Therefore, any visual representation that is recognizable as a copyrightable character from one of these films, other than a faithful copy of a public domain image, has copied ‘original elements’ from the corresponding film.” (The court found that the characters Tom and Jerry are not in the public domain until the copyrights in the Tom and Jerry short films begin to expire.) The court held that the products in the first category were not copyright infringement, but the other two were. It then sent the case back down to the district court on remand.

This current appeal focused on the district court’s granting of summary judgment on the trademark claims. The district court found that Warner Bros. owned trademarks in words and phrases from the films, and common law trademarks in the film characters. A permanent injunction was issued that stops AVELA from licensing any images or phrases from the films or cartoons, except for exact reproductions of the publicity materials. AVELA argued that the trademark claims were barred because Warner Bros. was attempting to use its trademark rights to essentially extend protections for expired copyrights, which is prohibited based on the ruling from a 2003 Supreme Court case called Dastar Corp. v. Twentieth Century Fox Film Corp.There, the Supreme Court held that the meaning of “origin” as in “false designation of origin,” which can lead to trademark infringement liability, “refers to the producer of the tangible goods that are offered for sale, and not to the author of any idea, concept or communication embodied in those goods.” The Eighth Circuit did not think this was a Dastar situation because Warner Bros. had been using its trademarks in the characters from the films on consumer goods for a long time.

AVELA was also arguing that Warner Bros’ trademarks are functional or that the use of them was protected by fair use. However, the Eighth Circuit ruled that AVELA had not brought up these defenses at the trial level, which meant it had waived them; therefore, they could not be used now. The court ruled the same way on AVELA’s appeal of the permanent injunction on the trademark claims, which it was raising for the first time as well.

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The appeals court affirmed the district court’s grant of statutory damages, summary judgment on the trademark claims, and the permanent injunction.

The case is Warner Bros. Entertainment, Inc.; Warner Bros. Consumer Products, Inc.; Turner Entertainment Co. v. X One X Productions, doing business as X One X Movie Archives, Inc.; A.V.E.L.A., Inc., doing business as Art & Vintage Entertainment Licensing Agency; Art-Nostalgia.com, Inc.; Leo Valencia, No. 15-3728, United States Court of Appeals for the Eighth Circuit.

Keep reading our blog for more news on trademark and copyright cases.