On February 23, 2011, the Ninth Circuit issued its opinion in a case involving the Betty Boop cartoon character titled: Fleischer Studios, Inc. v. A.V.E.L.A., Inc., et al. In that case, heirs of the creator of the Betty Boop cartoon claimed that defendants, which were marketing products with Betty Boop’s image, were liable for copyright infringement. (The case also involved claims of trademark infringement which will not be discussed in this article.)
The lower court granted the defendants’ summary judgment motion after finding that the creator’s heirs could not establish chain of title in the copyright for Betty Boop’s image. On appeal, the Ninth Circuit focused on the applicability of the “doctrine of indivisibility” and found that it did not apply to protect plaintiff’s claims.
Betty Boop was created by Max Fleischer in the 1930s. Mr. Fleischer was head of Fleischer Studios, Inc. which developed a number of cartoon films featuring Betty Boop and licensed the Betty Boop image for use in toys, dolls and other merchandise. The original Fleischer Studios abandoned Betty Boop about a decade later and sold its rights to both her cartoons and character. It dissolved shortly thereafter.
In the early 1970s, Mr. Fleischer’s family incorporated a new Fleischer Studios and attempted to repurchase the intellectual property rights to the Betty Boop character. The new Fleischer Studios claimed that its intellectual property right purchases made it the exclusive owner of the Betty Boop character copyright and began to license the Betty Boop character for use in toys, dolls and other merchandise. The defendants (referred to collectively as A.V.E.L.A.) also licensed Betty Boop merchandise pursuant to a copyright that is based on vintage posters featuring Betty Boop’s image that A.V.E.L.A. restored.
After defendants filed summary judgment motions, the Fleischer Studios asserted that the ownership of the copyright, which was first owned by the original Fleischer Studios, arose through several alternative chains of title, the relevant one being as follows: The original Fleischer Studios transferred its rights to Paramount Pictures in 1941, Paramount transferred those rights to UM&M TV Corp. in 1955, UM&M transferred its rights to National Telefilm Associates, Inc., which later became Republic Pictures in 1958 and finally, Republic Pictures transferred its exclusive copyright to the new Fleischer Studios in 1997.
On summary judgment, A.V.E.L.A. disputed the 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 the original Fleischer Studios to Paramount. The lower court agreed and found that the new Fleischer Studios failed to satisfy its burden of proof regarding the transfer of rights from UM&M to NTA and from NTA to Republic Pictures. Because the copied works at issue were all created pre-1978, the Copyright Act of 1909 (“the 1909 Act”) applied to the copyrights at issue.
In reviewing the lower court’s decision, the Ninth Circuit noted that the parties had agreed that Betty Boop became a separate copyrightable component of one of the original Fleischer Studios’ films. This concession meant that the original Fleischer Studio owned “all the rights and respect [to Betty Boop] which [it] would have if” it had individually copyrighted it. Because the new Fleischer Studios was suing for copyright infringement, it bore the burden of proving copyright ownership. Because its asserted ownership was based on the chain of title described above, the new Fleischer Studios was required to establish each link in the chain.
The Ninth Circuit noted that it was undisputed that Paramount obtained the rights to both the Betty Boop character and numerous Betty Boop cartoons from the original Fleischer Studio in 1941. The dispute at issue was what rights were then transferred from Paramount to UM&M in 1955. Although the purchase agreement granted to UM&M “all of Paramount’s right, title and interest in and to said photo place [of Betty Boop],” the agreement contained a carve out that “explicitly provided that the right to the Betty Boop character copyright was retained by Paramount.”
The Ninth Circuit considered whether the “doctrine of indivisibility” permitted the new Fleischer Studios to argue that all rights in the Betty Boop character had been transferred to UM&M. Under this 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.” The new Fleischer Studios argued that if Paramount had retained the copyright to the Betty Boop character but transferred the film copyrights to UM&M, the doctrine of indivisibility would have prevented UM&M from renewing its copyright. Such a result was evidenced according to the new Fleischer Studios that neither party intended to separate the Betty Boop character rights from the Betty Boop film rights.
However, the Ninth Circuit rejected this argument and found that “under the 1909 Act, the doctrine of indivisibility may have prohibited the 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.” Because copyright law does not favor forfeiture, “a court would deem the purported owner of the magazine publishing rights to be a mere licensee thereby allowing the offer to renew the copyright.” The Ninth Circuit recognized that although the UM&M agreement allowed UM&M to obtain the “totality of rights commanded by copyright” for the Betty Boop film, it did not obtain the rights to the Betty Boop character. The Ninth Circuit concluded: “In short, the doctrine of indivisibility does not deprive copyright holders of the right to transfer, or in this case, retain the component parts of their copyrights. If we held otherwise, we would be directly contravening section 3 of the 1909 Act by depriving Paramount of ‘all the rights and respect [to the component part] which [it] would have if each part were individually copyrighted.’”
The Ninth Circuit continued by recognizing that Paramount’s conduct subsequent to signing the UM&M contract did not evidence Paramount’s intent to transfer character rights in Betty Boop to UM&M. In fact, three years after entering into the UM&M agreement, Paramount transferred its Betty Boop character copyrights to another entity, Harvey Films. The Court concluded, “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 Ninth Circuit therefore affirmed the lower court’s grant of summary judgment in A.V.E.L.A’s favor “because the chain of title is broken.” Thus, plaintiffs who are pursuing copyright infringement claims based on older copyrights which have been transferred or assigned to various parties must establish each link in the chain of title in order to prevail on a copyright infringement action.