WALLACE, Senior Circuit Judge:
This appeal stems from the district court's summary judgment dismissing Fleischer Studios, Inc.'s (Fleischer) copyright and trademark infringement action. The district court ruled that Fleischer held neither a valid copyright nor a valid trademark in the Betty Boop cartoon character and thus lacked standing to sue. Fleischer appeals. The district court had jurisdiction pursuant to 28 U.S.C. § 1338(a), and our jurisdiction arises under 28 U.S.C. § 1291. We affirm.
Betty Boop "combined in appearance the childish with the sophisticated—a large round baby face with big eyes and a nose like a button, framed in a somewhat careful coiffure, with a very small body. . . ." Fleischer Studios v. Ralph A. Freundlich, Inc., 5 F.Supp. 808, 809 (S.D.N.Y.1934). Betty Boop was the creation of Max Fleischer, then head of Fleischer Studios, Inc. (Original Fleischer). Beginning in 1930, Original Fleischer developed a number of cartoon films featuring Betty Boop. For a time, Original Fleischer licensed the Betty Boop image for use in toys, dolls, and other merchandise. Approximately ten years after creating her, Original Fleischer abandoned Betty Boop and sold its rights to both her cartoons and her
Max Fleischer's family attempted to revive the Fleischer cartoon business in the early 1970s. The family incorporated its new entity under the same name as Original Fleischer and attempted to repurchase the intellectual property rights to the Betty Boop character. To be clear, Fleischer, the plaintiff in this action, is a distinct and separate entity from the now defunct Original Fleischer which first owned Betty Boop.
Fleischer believes that its intellectual-property-rights purchases have made it the exclusive owner of the Betty Boop character copyright and trademark. Based on this belief, Fleischer licenses the Betty Boop character for use in toys, dolls, and other merchandise. This merchandise has reached such a high level of popularity that even drug dealers have been known to use it. See United States v. Lakoskey, 462 F.3d 965, 971 (8th Cir.2006) ("A search warrant was issued, and the package was opened pursuant to that warrant on January 26, 2004. The package contained a large ceramic Betty Boop doll, with four concealed, separately wrapped plastic bundles of high-purity-level methamphetamine inside").
The defendants in this action, A.V.E.L.A., Inc., Art-Nostalgia.com, Inc., X One X Movie Archive, Inc., and Leo Valencia (collectively, A.V.E.L.A.), also license Betty Boop merchandise. The copyright pursuant to which A.V.E.L.A. licenses its products is based on vintage posters featuring Betty Boop's image that A.V.E.L.A. has restored.
During summary judgment proceedings before the district court, the parties disputed whether Fleischer owned an exclusive copyright to the Betty Boop character. Fleischer asserted that its ownership of the copyright, which was first owned by Original Fleischer, arises through several alternative chains of title. Only one chain is relevant here, however, because Fleischer has abandoned the others on appeal. The purported title chain is as follows: Original Fleischer transferred its rights to Paramount Pictures, Inc. (Paramount) in 1941; Paramount transferred those rights to UM & M TV Corp. (UM & M) in 1955; in 1958, UM & M transferred these rights to National Telefilm Associates, Inc. (NTA), which became Republic Pictures in 1986; and finally, Republic Pictures transferred the exclusive copyright to Fleischer in 1997.
A.V.E.L.A. disputed this alleged chain of title, arguing that there was no admissible evidence to establish each link in the chain with the exception of the transfer from Original Fleischer to Paramount. The district court agreed and held that Fleischer failed to satisfy its burden of proof regarding the transfer of rights from UM & M to NTA and from NTA to Republic Pictures.
The district court also dismissed Fleischer's trademark infringement claim, holding that Fleischer failed to submit proper evidence of a registered federal trademark in the Betty Boop image, and, although it had evidence of a registered federal trademark in the name "Betty Boop," the fractured ownership and use of that mark destroyed Fleischer's trademark rights. The court further held that Fleischer did not establish that it owned common-law trademarks in Betty Boop's name or image.
There is no doubt that a separate Betty Boop character copyright exists. Although there is no evidence in the record that Original Fleischer filed a copyright registration for the Betty Boop character, that is of no moment. Because all of the copied works were created before 1978, both parties agree that the Copyright Act of 1909 (1909 Act) applies to the copyrights at issue in this litigation. See Self-Realization
17 U.S.C. § 3 (repealed) (emphasis added); see also Rice v. Fox Broad. Co., 330 F.3d 1170, 1175-76 (9th Cir.2003) ("[C]haracters that are `especially distinctive' or the `story being told' receive protection apart from the copyrighted work", citing Olson v. Nat'l Broad. Co., 855 F.2d 1446, 1452 (9th Cir.1988)).
The parties agree that Betty Boop became a separate copyrightable component of one of Original Fleischer's 1930 films, and we accept that concession for the purposes of this appeal. Shivers v. Amerco, 670 F.2d 826, 832 n. 3 (9th Cir.1982); see also Rice, 330 F.3d at 1175-76. The logical result of this concession is that Original Fleischer owned "all the rights in respect [to Betty Boop] which [it] would have if" it had individually copyrighted it.
Fleischer now appeals, objecting to both the district court's copyright and trademark rulings. We review the district court's summary judgment de novo. Ellison v. Robertson, 357 F.3d 1072, 1075 (9th Cir.2004).
Fleischer bears the burden of proving copyright ownership. Litchfield v. Spielberg, 736 F.2d 1352, 1355 (9th Cir. 1984) ("To prove copyright infringement, the plaintiff must show . . . ownership of the copyright . . ."). As mentioned earlier, Fleischer asserts ownership of a copyright in the Betty Boop character through the following chain of title: Original Fleischer to Paramount to UM & M to NTA to Republic Pictures to Fleischer. Because this complete chain is necessary to establish ownership, Fleischer's copyright action requires it to establish each link.
It is undisputed that in 1941 Paramount obtained from Original Fleischer the rights to both the Betty Boop character and numerous Betty Boop cartoons. What is disputed, however, is whether Paramount then transferred the Betty Boop character to UM & M. Fleischer argues that it did so by a 1955 purchase agreement that stated, in part:
However, a key provision in that same agreement carved out the transfer of the characters in those Sold Photoplays:
In other words, the purchase agreement explicitly provided that the right to the Betty Boop character copyright was retained by Paramount, rather than transferred to UM & M. The "[a]nything to the contrary notwithstanding" clause is unambiguous. See Cisneros v. Alpine Ridge Grp., 508 U.S. 10, 17, 113 S.Ct. 1898, 123 L.Ed.2d 572 (1993) ("[T]he use of such a `notwithstanding' clause clearly signals the drafter's intention that the provisions of the `notwithstanding' section override conflicting provisions of any other section").
The "doctrine of indivisibility" has no impact on this conclusion. "[T]he doctrine of indivisibility is a judge-made rule that relates primarily to standing." Abend v. MCA, Inc., 863 F.2d 1465, 1469 (9th Cir.1988), aff'd on other grounds sub nom., Stewart v. Abend, 495 U.S. 207, 110 S.Ct. 1750, 109 L.Ed.2d 184 (1990). "Under the doctrine, a `licensee' of a copyright—i.e., someone who holds only partial copyright privileges—may not copyright a work in the licensee's name." Id. Fleischer argues that if, as we hold here, Paramount retained the copyright to the Betty Boop character but transferred the copyright to the films to UM & M, the doctrine of indivisibility would have prevented UM & M from renewing its copyright. That renewal-blocking result is evidence, according to Fleischer, that neither party intended to separate the Betty Boop character and film rights. "At most," Fleischer states, "Paramount may have retained a contractual right (or license back) to exploit the character apart from the films."
Fleischer is mistaken. Under the 1909 Act, the doctrine of indivisibility may have prohibited a copyright owner from renewing his or her copyright if, for example, he or she had previously sold the magazine-publishing rights to his or her story. Id.
Contrary to another of Fleischer's arguments, Paramount's conduct subsequent to the execution of the contract does not cast doubt on our conclusion. Fleischer is correct that subsequent conduct can be used in some instances to discern contractual intent. See Wolkowitz v. FDIC (In re Imperial Credit Industries, Inc.), 527 F.3d 959, 966 (9th Cir.2008). However, Paramount's subsequent conduct is not evidence of Paramount's intent to transfer the Betty Boop character to UM & M. Paramount did not stand idly by while UM & M renewed the copyrights and profited from ownership of those copyrights. Instead, the record suggests that three years after entering into the UM & M agreement, Paramount transferred its Betty Boop character copyright to Harvey Films. While we have doubts as to whether the use of subsequent behavior in this instance—where the contractual language is unambiguous—is appropriate, see Wells Fargo Bank & Union Trust Co. v. McDuffie, 71 F.2d 720, 728 (9th Cir.1934), Paramount's subsequent behavior supports our conclusion that it did not transfer the rights to the Betty Boop character copyright by the UM & M agreement.
The dissent states that we are "answer[ing] only half of the issue[ ] by failing to explain what happened to the copyright after it transferred to Harvey Films in the 1950s." Dissent at 1127. That complaint is not well-taken. In this case, the only issue raised by Fleischer on appeal is whether Fleischer obtained the Betty Boop copyright via the chain of title Original Fleischer to Paramount to UM & M to NTA to Republic to Fleischer. In the district court, Fleischer raised a number of other chain-of-title theories but the district court held all of them to be faulty. By not seeking review of those holdings here,
Perhaps Fleischer should have argued that A.V.E.L.A. waived its character-carveout argument by not asserting it to the district court. Resolution Trust Corp. v. First Am. Bank, 155 F.3d 1126, 1129 (9th Cir.1998) (explaining that issues not raised before the district court are generally forfeited). Perhaps Fleischer does not object to A.V.E.L.A.'s argument on this ground because, as A.V.E.L.A. argues, it raised the issue with sufficient clarity to preserve it. Whatever the reason, Fleischer's failure to argue that A.V.E.L.A. waived this argument requires us to reach its merits. Norwood v. Vance, 591 F.3d 1062, 1068 (9th Cir.2010) ("this court will not address waiver if not raised by the opposing party").
Upon review of the merits of A.V.E.L.A.'s character-carveout argument, it is clear that Paramount did not transfer the copyright to the Betty Boop character to UM & M. Because the chain of title is broken, and the only chain of title at issue in this appeal is this one involving UM & M, the district court properly dismissed Fleischer's copyright-infringement claim.
Fleischer also sued A.V.E.L.A. for infringing its trademarks. The A.V.E.L.A. products to which Fleischer objected include Betty Boop dolls as well as t-shirts and handbags prominently displaying her image. The district court dismissed Fleischer's trademark-infringement claim, holding that Fleischer did not provide evidence, in the time required by the Federal Rules of Civil Procedure, that Fleischer owned either the common law or federally registered trademarks that A.V.E.L.A. allegedly infringed.
Both parties' briefs discuss the details of whether the district court's decision was correct, including the issue of whether cartoon characters are protectable as trademarks, whether Fleischer owns a registered image trademark in Betty Boop's image and name, whether Fleischer owns a commonlaw trademark in "Betty Boop", whether the fractured ownership of the Betty Boop copyright precludes Fleischer from asserting a trademark claim, and, finally, whether A.V.E.L.A. infringed Fleischer's marks. But all of these arguments are mooted by controlling precedent that neither party cited: International Order of Job's Daughters v. Lindeburg & Co., 633 F.2d 912 (9th Cir.1980).
Although the parties did not cite or argue the application of Job's Daughters to the facts of this case, and while the district court did not base its decision on that case, "it is clear that we have the power to affirm [the district court's decision] on an alternate basis" if it is supported by the record. Badea v. Cox, 931 F.2d 573, 575 n. 2 (9th Cir.1991). Because resolving this issue is in the interest of judicial economy, we elect to do so. See United States v. Koyomejian, 970 F.2d 536, 541 (9th Cir. 1992), citing Badea, 931 F.2d at 575 n. 2.
In Job's Daughters, plaintiff Job's Daughters sued defendant Lindeburg "for trademark infringement arising out of Lindeburg's manufacture and sale of jewelry bearing the Job's Daughters insignia." 633 F.2d at 914. Job's Daughters was a young women's organization that used its
When the case came to us on appeal, we evaluated the same trademark infringement claims that are asserted here: those based on 15 U.S.C. §§ 1114 and 1125(a). Job's Daughters, 633 F.2d at 917. We held that "Lindeburg was not using the Job's Daughters name and emblem as trademarks." Id. at 920. That conclusion, and the reasoning that Job's Daughters used to reach it, are directly applicable to the case before us.
"In general," Job's Daughters stated,
Id. at 917 (internal citations omitted; emphases added).
After setting forth these principles, Job's Daughters explained the role of the court in determining whether an infringer's use of an image and name was for functional or trademark purposes: "[A] court must closely examine the articles themselves, the defendant's merchandising practices, and any evidence that consumers have actually inferred a connection between the defendant's product and the trademark owner." Id. at 919. Accordingly, we held:
Id. at 920.
Job's Daughters is directly applicable to Fleischer's trademark claims. Even a cursory examination, let alone a close one, of "the articles themselves, the defendant's merchandising practices, and any evidence that consumers have actually inferred a connection between the defendant's product and the trademark owner," reveal that A.V.E.L.A. is not using Betty Boop as a trademark, but instead as a functional product. See id. at 919. Just as in Job's Daughters, Betty Boop "w[as] a prominent feature of each item so as to be visible to others when worn...." Id. A.V.E.L.A. "never designated the merchandise as `official' [Fleischer] merchandise or otherwise affirmatively indicated sponsorship." Id. Fleischer "did not show a single instance in which a customer was misled about the origin, sponsorship, or endorsement of [A.V.E.L.A.'s products], nor that it received any complaints about [A.V.E.L.A.'s] wares." Id. Given the marked similarity between the facts of Job's Daughters and the appeal before us, we reach the same conclusion here as in our earlier decision. "The name and [Betty Boop image] were functional aesthetic components of the product, not trademarks. There could be, therefore, no infringement." Id.; see also New Kids on the Block v. News Am. Pub., Inc., 971 F.2d 302, 309(9th Cir.1992) ("[T]he trademark laws do not give the New Kids the right to channel their fans' enthusiasm (and dollars) only into items licensed or authorized by them"), citing Job's Daughters.
Dastar Corp. v. Twentieth Century Fox Film Corp., another case that both parties failed to cite, is also relevant. 539 U.S. 23, 123 S.Ct. 2041, 156 L.Ed.2d 18 (2003). Dastar held 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. Id. at 33, 123 S.Ct. 2041. To do so would be to circumvent the Copyright Act and allow trademark holders perpetual rights to exploit their creative work. Id. The Court explained,
Id. (internal quotations, citations and alterations omitted; emphases added).
If we ruled that A.V.E.L.A.'s depictions of Betty Boop infringed Fleischer's trademarks, the Betty Boop character would essentially never enter the public domain. Such a result would run directly contrary to Dastar, 539 U.S. at 37, 123 S.Ct. 2041("To hold otherwise would be akin to finding that § 43(a) created a species of perpetual patent and copyright, which Congress may not do").
Therefore, even if Fleischer owns trademarks in Betty Boop, it cannot assert a trademark infringement action against A.V.E.L.A. Given that A.V.E.L.A.'s use of
In light of our holding, we also deny as moot Fleischer's motion to take judicial notice of the incontestible status of its trademark registrations.
GRABER, Circuit Judge, dissenting:
I respectfully dissent.
The beginning and the ending of this story are undisputed. Max Fleischer created the lovable character Betty Boop in the 1930s. In 1941, he sold to Paramount Pictures the copyright to certain cartoons and to the character Betty Boop herself. Max Fleischer died in 1972.
After Fleischer's death, some of his descendants incorporated Fleischer Studios, which is Plaintiff here. Part of Plaintiff's plan was to bring back into circulation the character Betty Boop. Carrying out that plan, Plaintiff purchased the rights to Betty Boop from various entities in the 1980s and 1990s. When Defendants began selling Betty Boop merchandise, Plaintiff brought this action alleging, among other things, copyright infringement.
Plaintiff must establish the chain of title of the copyright to the character Betty Boop. It is undisputed that Paramount owned the copyright as of 1941. The dispute focuses on the chain of title between Paramount and Plaintiff. In the district court, Plaintiff argued, primarily, that Paramount sold the copyright in 1955 to UM & M TV Corporation, which eventually sold it to Plaintiff. Plaintiff argued, alternatively, that even if Paramount did not sell the copyright to UM & M, Paramount sold the copyright in 1958 to Harvey Films, which eventually sold the copyright to Plaintiff. In other words, one chain of title leads through UM & M and another leads through Harvey Films, but both paths lead to Plaintiff.
The district court held that Paramount sold the copyright to UM & M in 1955. The district court held, however, that the post-1950s link between UM & M and Plaintiff was broken, largely because of the court's evidentiary rulings. Plaintiff appealed.
On appeal, Plaintiff made precisely the arguments one would expect: The district court erred in its evidentiary rulings and in its conclusion that the link between UM & M and Plaintiff was broken. In their answering brief, Defendants defended the district court's holdings on those points. In my view, Plaintiff is correct that the district court erred. For example, the relevant statements in the 1997 settlement agreement qualify as an exception to hearsay under Federal Rule of Evidence 803(15) and establish the link between UM & M and Plaintiff.
In sum, if the copyright transferred to UM & M, Plaintiff prevails.
Defendants also raised an entirely new theory. They argued that the district court erred in concluding that Paramount sold the copyright to UM & M. Defendants argued that, because of the doctrine of indivisibility, the copyright passed neither to UM & M nor to Harvey Films; instead, the copyright entered the public domain by virtue of Paramount's failure to renew the copyrights to certain cartoons.
Defendants' argument fails on its own terms. Even if the doctrine of indivisibility applied, as Defendants assert, the copyright nevertheless transferred to UM &
The majority strikes out on its own and adopts a position rejected by the district court and advanced by neither party on appeal. The majority holds that Paramount did not sell the copyright to UM & M but instead sold it to Harvey Films. See maj. op. at 1121 ("Paramount transferred its Betty Boop character copyright to Harvey Films.").
The majority inexplicably fails to respond to that theory, asserting only that Plaintiff waived the argument that it possesses the copyright via the Harvey Films chain of title. I disagree with the majority's assertion for four reasons.
First, it is true that Plaintiff did not raise the Harvey Films chain of title in its opening brief. But its failure in that regard is perfectly understandable. The district court had ruled in Plaintiff's favor on every link in the UM & M chain except one. Plaintiff thus challenged only the portion of the district court's opinion in which Plaintiff lost. That strategy makes particular sense because Defendants had never before advanced the argument made in their answering brief. Furthermore, after Defendants did advance a new argument, Plaintiff immediately retorted, in its reply brief, that even if the doctrine of indivisibility applied, Plaintiff prevails via the Harvey Films chain of title.
Third, as a matter of discretion, I would reach the Harvey Films chain of title. The basic question raised by this appeal is the ownership of the copyright. I see nothing to be gained, and no unfair advantage to be conferred, by resolving this issue to the present day, rather than arbitrarily stopping our analysis as of the 1950s.
Finally, if we are to adhere strictly to the doctrine of waiver, then I would address only the issues raised by the parties. Plaintiff argues that the district court erred in its analysis of the UM & M chain of title. I agree. Defendants argue that the copyright transferred to no one. I, as does the majority, disagree. If we were to address only the parties' arguments, we would stop there. I would not reach the line of reasoning invented by the majority.
In conclusion, the majority adopts a theory rejected by the district court and advanced by neither party on appeal. Worse still, the majority answers only half of the issue, by failing to explain what happened to the copyright after it transferred to Harvey Films in the 1950s.
If the copyright transferred to UM & M, as the district court held, then Plaintiff prevails because UM & M sold the copyright to Plaintiff. If the copyright transferred to Harvey Films, as the majority holds, then Plaintiff prevails because Harvey Films sold the copyright to Plaintiff. There is no support for the novel argument advanced by Defendants that the copyright transferred neither to UM & M nor to Harvey Films. Accordingly, I would reverse the district court's grant of summary judgment to Defendants on the copyright claim.
