by Michael Lovitz
In December 2013, the Federal District Court for the Northern District of Illinois issued its ruling in Klinger v. Conan Doyle Estate, Ltd., 2013 U.S. Dist. LEXIS 180493 (December 23, 2013), concerning the characters, character traits and other story elements from Sir Arthur Conan Doyle’s series of “Sherlock Holmes” stories, as published through four novels and fifty-six short stories, which focused on the well-known detective and his constant companion Dr. John Watson, along with other related characters and story elements (collectively, the “Canon”). The majority of the Canon’s stories were published prior to January 1, 1923 and in the public domain in the United States; however, the final group of ten short stories, collected and published in 1927 as The Case-Book of Sherlock Holmes (the “Ten Stories”), remain under copyright protection in the United States until the year 2022.
The declaratory judgment action was initiated by Leslie Klinger, a California attorney and one of the world’s leading authorities on the Canon. Klinger had written more than twenty books and numerous articles on the subject of the Canon, and had served as the technical adviser for Warner Brothers on their two recent Sherlock Holmes films. Klinger also authored an award-winning, three-volume, annotated collection of Sherlock Holmes books and stories entitled The New Annotated Sherlock Holmes, published by W.W. Norton in 2004 and 2005. Because the annotated edition republished the Ten Stories, Klinger and W.W. Norton voluntarily sought and obtained a license from Conan Doyle Estate, Ltd. (the “Estate”) for publication of the annotated edition.
Klinger served as co-editor on an anthology containing new and original short stories written by contemporary authors that were inspired by, and featured various characters and story elements from, the Canon. The Random House Publishing Group published the anthology, entitled A Study in Sherlock, in 2011. While preparing the anthology for publication, Klinger and Random House were contacted by the Estate’s agent who asserted exclusive rights in a number of (unspecified) elements of the Canon and demanded that Klinger and Random House enter into a license agreement with the Estate or face litigation for infringement of the Estate’s rights. Although Klinger refused these demands, Random House did enter into the requested license on behalf of itself and Klinger, and published the anthology in October 2011.
The popularity of A Study in Sherlock led Klinger and his co-editor to prepare a second anthology of new and original stories, entitled In the Company of Sherlock Holmes (the “2d Anthology”), and they contracted with Pegasus Books, an independent trade publisher whose books are distributed by W.W. Norton, to publish the new book. Prior to publication of the 2d Anthology, Pegasus was contacted by the Estate’s agent, again demanding that Pegasus and Klinger enter into a licensing agreement, under an implied threat of an infringement action if a license were not to be obtained from the Estate. The Estate requested the new license be on the same terms as the previous agreement with Random House. However, Klinger and Pegasus declined to enter into a license agreement, stating that the 2d Anthology would not contain any story elements or characters introduced in the Ten Stories, but rather only characters and story elements from the Canon that were already in the public domain. The Estate responded and invited “reasonable counter-proposals,” but also advised Klinger and Pegasus:
If you proceed instead to bring out [In the Company of Sherlock Holmes] unlicensed, do not expect to see it offered for sale by Amazon, Barnes & Noble, and similar retailers. We work with those company’s [sic] routinely to weed out unlicensed uses of Sherlock Holmes from their offerings, and will not hesitate to do so with your book as well.
As a result of the Estate’s threats, Pegasus refused to finalize its contract with Klinger to publish the 2d Anthology.
Klinger brought his declaratory judgment action in February 2013 in the federal district where the Estate’s agent was located (the northern district of Illinois), based on the demands and threats made by the Estate and its agent. The Complaint asked the Court to determine, inter alia, the copyright status of a list of specific characters, character traits, dialogue, settings, artifacts, and other story elements in the Canon. The Estate did not respond to the Complaint and so the Court entered a default against the Estate on June 25, 2013. The Court then permitted Klinger to proceed with the filing of either a motion for summary judgment or a motion for default judgment in order that the issues raised in the Complaint get a full adjudication.
Klinger’s Motion for Summary Judgment noted that all of the pre-1923 works were in the public domain, including the novel A Study in Scarlet, in which Holmes and Watson are first introduced, and argued that all of the story elements contained in the 2d Anthology had first appeared in those pre-1923 public domain works. Klinger relied upon the well-established judicial rule that the length of protection for a character or other story element begins when they are first used in a work of authorship, and that the re-use of a character or story element does not extend their copyright protection, noting the following quote from Nimmer on Copyrights:
“What of the situation where an author has used the same character in a series of works, some of which works subsequently enter the public domain, while others remain protected by copyright? Clearly anyone may copy such elements as have entered the public domain, and no one may copy such elements as remain protected by copyright.”
1 Nimmer, supra, §2.12, p. 2-178.30, 2-178.30(1), 2-178-31, citing, inter alia, National Comics Publications, Inc. v. Fawcett Publications, 191 F.2d 594 (2d Cir. 1951). Nimmer also posits that this rule applies equally where the same characters appear both in works that have passed into the public domain and works that remain under copyright protection:
The more difficult question is this: may the character depicted in all of the works be appropriated for use in a new story created by the copier? Assuming the character to be sufficiently developed as to be protectable, arguably such conduct would constitute an infringement of those works that remain in copyright. The better view, however, would appear to be that once the copyright in the first work that contained the character enters the public domain, then it is not copyright infringement for others to copy the character in works that are otherwise original with the copier, even though later works in the original series remain protected by copyright.
1 Nimmer, supra, §2.12, p. 2-178.31, citing, inter alia, Columbia Broadcasting Sys., Inc. v. DeCosta, 377 F.2d 315 (1st Cir.), cert. denied, 389 U.S. 1007, 88 S. Ct. 565, 19 L. Ed. 2d 603 (1967).
“Just as the copyright in a derivative work will not protect public domain portions of an underlying work as incorporated in the derivative work, so copyright in a particular work in a series will not protect the character as contained in such series if the work in the series in which the character first appeared has entered the public domain.” 1 Nimmer, supra, §2.12, p. 2-178.31, citing, inter alia, Siegel v. Warner Bros. Entm’t Inc., 690 F. Supp. 2d 1048, 1059 (C.D. Cal 2009). As a result, Klinger argued that he should be free to create and exploit new derivative works based on any characters and story elements appearing in those works that had entered the public domain. Finally, Klinger took the position that the story elements contained in the Ten Stories were not eligible for copyright protection, on the grounds that they were merely events, not characteristics, and that copyright protection does not extend to ideas, plots, dramatic situations, or events.
Not surprisingly, the Estate did finally appear in the proceeding once the Summary Judgment Motion had been filed, and filed a response in opposition to the Motion wherein it took the position that the literary characters of Sherlock Holmes and Dr. Watson were not fully created or disclosed in 1887’s A Study in Scarlet novel, but rather were only completed in the final copyrighted stories in which they appeared. During the interim, the characters were developed and shaped by the author, who was continually making changes (both positive and negative) to the characters, their attributes, dimensions, backgrounds and relationships. By way of example, the second marriage for Dr. Watson resulted in him moving out of Baker Street, causing his relationship with Holmes to be substantially altered when Holmes is left to live alone, also altering the characters themselves. Additionally, the Estate noted that the stories featuring the pair were not written in purely chronological order, as the Ten Stories are set at various points earlier in the two characters’ lives.
The Estate also argued that Klinger’s attempt to analogize the current situation, where the Sherlock Holmes stories were an original series of works, to Prof. Nimmer’s views pertaining to characters used in derivative works, was faulty, taking the position that the stories in the Canon were not derivative works under the statute. The Estate additionally argued that because the development of the Holmes and Watson characters was non-linear, it would be impossible to make new uses of those characters without invading the copyrighted character developments contained in the Ten Stories. Finally, the Estate argued that a ruling whereby the pre-1923 story elements and characters would be free for public use, while the further delineations of the characters and story elements retain their protected status should pertain only to two-dimensional “flat” characters and not complex, three-dimensional characters such as Holmes and Watson, and expressed concern that ruling only those increments of expression added by the Ten Stories would be barred from use during the remaining copyright term would have the practical effect of dismantling the characters into a public domain version and a copyrighted version.
The Court agreed with Klinger, ruling that only those story elements and characteristics first appearing the Ten Stories would retain protected status under the copyright law, and the pre-1923 story elements were free for public use. Noting that the Estate’s proposed distinction would run counter to prevailing case law, the Court remarked that adopting the Estate’s position would “extend impermissibly the copyright of certain character elements of Holmes and Watson beyond their statutory period, contrary to the goals of the Copyright Act.” In a case of first impression within the 7th Circuit, the court found that application of the “incremental expression test” was appropriately applied to literary sequels and literary series, and that the Canon consisted of subsequent works “based upon material from a pre-existing work, Sir Arthur Conan Doyle’s first Sherlock Holmes story.” These subsequent works therefore met the definition of derivative works, making the incremental expression test applicable.
The Court, however, disagreed with Klinger on the issue of whether the story elements contained in the Ten Stories were susceptible to copyright protection. Specifically, the Court found that a number of the story elements contained in the Ten Stories comprised characters, character traits and storylines, all of which are copyrightable increments of expression, and were thus protected under copyright. As a result, any stories to be included within the 2d Anthology could not include or incorporate any of the incremental expressions contained in the Ten Stories absent a license from the Estate.
The Estate appealed the district court ruling, and in its briefs focused on two alternate grounds. The first ground was that the district court lacked subject matter jurisdiction because there was no case or controversy between the parties, and that Klinger’s suit was premature. The second ground was that, if there were jurisdiction, the Estate was entitled to judgment on the merits because, in the case of a complex literary character appearing in an author’s series of works (such as Sherlock Holmes and Dr. Watson), whose full complexity is not revealed until a later story, remains under copyright until such later story falls into the public domain. As a result, the Estate argued, the fact that the early stories in which such complex characters appeared are in the public domain does not permit the less-than-fully “complexified” versions of the characters from the early stories to be copied, even if those early stories are themselves in the public domain.
The 7th Circuit, in a ruling handed down May 22, 2014, affirmed the district court ruling and finding against the Estate on both grounds. First, the Court noted that the Estate had made clear to Klinger that it would seek to prevent the 2d Anthology from being sold through Amazon and other big book retailers “implicitly threatening to sue the publisher, as well as Klinger and his co-editor, for copyright infringement if they defied its threat.” It was this twin threat – to block distribution of the book and to sue for copyright infringement – that created an actual controversy, rather than a mere potential controversy, and was thus sufficient to merit the bringing of the declaratory judgment action and for the district court to assert (and retain) jurisdiction over the case.
As to the merits of the case, the Court affirmed the ruling of the district court, focusing on the issue of whether copyright protection in a fictional character can be extended beyond the expiration of the copyright because “the author altered the character in a subsequent work” and noting that they could not find any basis in statue or case law for extending a copyright beyond its expiration:
We cannot find any basis in statute or case law for extending a copyright beyond its expiration. When a story falls into the public domain, story elements — including characters covered by the expired copyright — become fair game for follow-on authors, as held in Silverman v CBS Inc., 870 F.2d 40, 49-51 (2d Cir. 1989), a case much like this one.
The Court further noted that the Silverman court also ruled that “a copyright affords protection only for original works of authorship and, consequently, copyrights in derivative works secure protection only for the incremental additions of originality contributed by the authors of the derivative works.” Id. at 49 (emphasis added). Using examples from Shakespeare (Sir John Falstaff) and the Star Wars movies, the Court explained that simply because a later work may provide a fuller, more rounded portrayal of the character does not justify extending the expired copyright of the flatter character from the first works in which they appear. As the Court explains:
From the outset of the series of Arthur Conan Doyle stories and novels that began in 1887 Holmes and Watson were distinctive characters and therefore copyrightable. They were “in-complete” only in the sense that Doyle might want to (and later did) add additional features to their portrayals. The resulting somewhat altered characters were derivative works, the additional features of which that were added in the ten late stories being protected by the copyrights on those stories. The alterations do not revive the expired copyrights on the original characters.
Finally, the Court expressed concern that the Estate’s position could have the negative effect of encouraging authors to write stories involving their earlier characters in an effort to create a perpetual (or near perpetual) copyright protection for characters, such extension not only beyond the limits fixed by Congress but also in violation of the copyright clause of the Constitution.
Michael Lovitz is a partner at Bowen Hayes & Kreisberg, where he practices all aspects of intellectual property law, including copyright, trademark, unfair competition, trade secrets, portfolio management, and licensing and transactional matters.