Daniels v. Walt Disney Co., 958 F.3d 767 (9th Cir. 2020), cert. denied, 592 U.S. __ (2021) (No. 20-132)
On January 11, 2021, the Supreme Court denied certiorari in The Moodsters Company v. The Walt Disney Co., No. 20-132. In doing so, the Court declined for now to involve itself in a recurring and difficult question in copyright law: Under what circumstances do freestanding, graphically depicted characters qualify for copyright protection independent of the work in which the characters appear?
I – Background
Denise Daniels, an expert in children’s emotional intelligence and development, had an idea to bring emotions to life through graphically depicted characters. She formed The Moodsters Company (“Company”) as a development vehicle for the idea, raised three million dollars in investment capital, and recruited “industry-leading talent” to help develop the characters. By 2005, Daniels’s characters had emerged as an ensemble of five “color-coded anthropomorphic emotions, each representing a different emotion: pink (love); yellow (happiness); blue (sadness); red (anger); and green (fear).” Daniels v. Walt Disney Co., 958 F.3d 767, 770 (9th Cir. 2020). The characters, presented as living together within each child, included “many other nuanced expressions, like the anger character’s tendency to explode from the head when angry.” Petition for Writ of Certiorari, at 7. Although the characters were initially assigned names, those names changed in subsequent iterations. Id., at 9.
The Company’s initial product was “The Moodsters Bible” (“Bible”), a pitchbook that “provided a concise way to convey Daniels’s idea to media executives and other potential collaborators, and included a brief description of the characters, themes, and settings that Daniels envisioned for her Moodsters universe.” Moodsters, 958 F.3d at 770. In 2007, the Company released a thirty-minute pilot episode for a television series featuring The Moodsters. Id. In 2012 and 2013, the Company developed what it referred to as a “second generation” of Moodsters products, i.e., a line of toys and books featuring The Moodsters. Id. Beginning in 2015, these new products became available for sale at Target stores and other retailers. Id.
Daniels and the Company pitched The Moodsters to a number of media and entertainment companies, but their most extensive efforts were with the Walt Disney Company (“Disney”) and its affiliates. Petition, at 7. In the case of Disney, these marketing efforts began in 2005 and continued into 2009. Moodsters, 958 F.3d at 770. They included meetings and conversations with a number of Disney officials and representatives, including Disney’s chief financial officer; an employee of Disney Playhouse (a Disney cable outlet); and the president of Disney Channels Worldwide (a unit of Disney’s television group). Id. In addition, Daniels alleged that she discussed the Moodsters with the director and screenwriter, Pete Docter. Id. Not surprisingly, in the course of these efforts, Daniels and the Company shared detailed information about The Moodsters. Id.
In 2010, Disney began development of an animated film entitled Inside Out that “centers on five anthropomorphized emotions [joy, fear, sadness, disgust, and anger] that live inside the mind of an 11-year-old girl named Riley.” Id. The film was released in 2015, won the Academy Award for Best Animated Feature, and grossed more than $1.2 billion in combined domestic and international sales. Inside Out was directed and co-written by Pete Docter. Id.
II – Litigation
Daniels and the Company sued Disney and certain of its related entities, setting forth claims for breach of implied contract and copyright infringement. Disney responded to plaintiffs’ initial and amended complaints with motions to dismiss under Rule 12(b)(6), and the district court granted both motions for failure to state facts sufficient to support the claims.
Regarding the claims of infringement, the district court applied existing Ninth Circuit precedent relating to copyright protection for freestanding characters (as opposed to those whose claim of copyright is based on the work of which the characters are a part):
Plaintiffs assert infringement claims only with respect to the individual characters and the ensemble of characters, rather than in the work itself, so the Court analyzes Plaintiffs’ copyright protection claims through the lens of the Ninth Circuit’s three-part test to determine whether a character deserves copyright protection independent of the work in which it appears.
Characters standing alone “are not ordinarily entitled to copyright protection.” Blizzard Entm’t, Inc. v. Lilith Games (Shanghai) Co., 149 F. Supp. 3d 1167, 1173-74 (N.D. Cal. 2015). To be copyrightable independent of the underlying work in which the character appears, a character must (1) have “physical as well as conceptual qualities,” (2) “be ‘sufficiently delineated’ to be recognizable as the same character whenever it appears,” and (3) be “‘especially distinctive’ and ‘contain some unique elements of expression.’” DC Comics v. Towle, 802 F.3d 1012, 1020-21 (9th Cir. 2015).
Daniels v. The Walt Disney Co., No. 17-CV-4527 PSG-SK, Order, ECF No. 47, at 6 (C.D. Cal. Jan. 31, 2018). With that guidance, the district court determined that Daniels and the Company failed to satisfy the second (“sufficiently delineated to be recognizable as the character whenever it appears”) and third (“especially distinctive”) elements of the Towle test, both as to The Moodsters individually and as an ensemble.
The Ninth Circuit agreed with the district court’s application of Towle, finding the facts insufficient to support both adequate delineation and distinctiveness. Moodsters, 958 F.3d 767. The court added, however, that it had recognized an entirely separate basis for extending copyright protection to both literary and graphic characters: “the story being told” test. Id., at 773-774 (citing Warner Bros. Pictures v. Columbia Broad. Sys., 216 F.2d 945, 950 (9th Cir. 1954)). But “[a] character is not copyrightable under that test where the character is only the chessman in the game of telling the story.” Id., at 774 (internal quotation marks and citation omitted). Instead, a character will only qualify as “the story being told” where he, she or it “so dominate[s] the story such that it becomes essentially a character study.” Id. In the end, the Ninth Circuit found no basis for affording story-being-told protection to The Moodsters:
Neither the Bible nor the pilot episode exhibits any prolonged engagement with character development or a character study of The Moodsters. Although the characters are introduced in the Bible, along with short descriptions, these pithy descriptions do not constitute the story being told. The pilot contains even less character development—rather, each of The Moodsters serves primarily as a means by which particular emotions are introduced and explored. The Moodsters are mere chessmen in the game of telling the story.
Id. Accordingly, the Ninth Circuit affirmed the district court in all respects. Id., at 975.
On August 3, 2020, the Company filed a petition for certiorari making two principal points about the copyrightability of freestanding, graphic characters.* First, it argued that the standards applied in the courts of appeals to determine whether graphic characters enjoy copyright protection are conflicting and constitute a circuit split for purposes of the Supreme Court’s certiorari jurisdiction. Petition, at 12-13. Second, the Company contended that by imposing requirements for character delineation and distinctiveness that require something more than originality in the created work, each of the existing standards—to one degree or another—conflicts with the “touchstone” concept that copyright inheres in an original work at the moment of its creation. Petition, at 20.
In its response, Disney disputed both points. It saw no circuit split on the question of copyrightability. Brief in Opposition to Petition for Writ of Certiorari, at 2. All circuits, Disney contended, focus on the sufficiency of a character’s delineation and grant or withhold copyright protection to freestanding characters based on the sufficiency of the delineation. Id., at 12. As for the Company’s argument that the focus on delineation sidelines the law’s fundamental interest in protecting original works, Disney responded to say that the Company’s argument would unwind decades of adherence to the principle that “character cannot be independently protected by copyright unless the character is well delineated.” Id, at 15. To permit copyright to attach to poorly delineated characters, Disney suggested, is to allow copyright to attach to ideas, rather than to their expression in a developed work. Id., at 18, 23.
III – Comment
It cannot be surprising that certiorari was denied. To the extent that the Company’s case relied on the existence of a circuit split, that characterization is hard to support. Brief in Opposition, at 15-20. All circuits faced with the issue of character copyrightability apply a sufficient-delineation test, and the differences among the circuits have more to do with refinement than with conflict. The Ninth Circuit, with the addition of its “especially distinctive” element, may very well have the most refined test. But even if that refinement gives the circuit the distinction of having the most rigorous approach to the question, it is still the case that sufficient delineation is at the heart of the matter.
As for the Company’s contention that there is something fundamentally misguided about a copyrightability standard that requires a character to be extensively delineated to gain the law’s protection, that argument too was unlikely to impress the Court. After all, character delineation has been the law’s tool for distinguishing between ideas–not protected by copyright–and expression–which is. It is an approach that has been around for at least ninety years, and its pedigree is enhanced by Judge Hand’s elaboration and endorsement in Nichols.
This is not to suggest that the Company should have known better; the line between sufficient and insufficient delineation, after all, is not an entirely clear one, and the Company was not unreasonable to think, perhaps with some confidence, that it had taken its ideas into the realm of copyrightable expression. Nevertheless, even by 2005, existing Ninth Circuit precedent cautioned against such confidence. Rice v. Fox Broadcasting Co., 330 F.3d 1170, 1175 (9th Cir. 2003) (especially distinctive cartoon characters receive copyright protection apart from the copyrighted work); Olson v. National Broadcasting Co., 855 F.2d 1446, 1452-1453 (9th Cir. 1988) (lightly sketched characters not entitled to copyright protection).
-Anthony F. Muri, February 25, 2021
*In its petition, the Company also asked the Court to decide “whether copyrightability — for a character or any work — is a question of fact, ill-suited for resolution on a Rule 12 motion.” Petition at (i) – (ii). We do not explore that issue here.