Leslie Klinger v. Conan Doyle Estate, Ltd.

Citations: 755 F.3d 496; 111 U.S.P.Q. 2d (BNA) 1065; 2014 U.S. App. LEXIS 11319; 2014 WL 2726187Docket: 14-1128

Court: Court of Appeals for the Seventh Circuit; June 16, 2014; Federal Appellate Court

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In the case before the United States Court of Appeals for the Seventh Circuit (No. 14-1128), Leslie S. Klinger, the plaintiff-appellee, is in a legal dispute with the Conan Doyle Estate, Ltd., the defendant-appellant. The appeal originates from the Northern District of Illinois, presided over by Chief Judge Rubén Castillo. The court's decision was made on June 16, 2014, following oral arguments on May 22, 2014.

Arthur Conan Doyle's Sherlock Holmes stories were published between 1887 and 1927, with 56 stories and 4 novels. Due to the 1998 Copyright Term Extension Act, copyrights on the last ten stories will remain valid until 95 years post-publication, expiring between 2018 and 2022. In contrast, the earlier 46 stories and 4 novels, published before 1923, are in the public domain, allowing unrestricted copying and selling.

Klinger co-edited an anthology titled "A Study in Sherlock," featuring new stories inspired by Doyle's works, for which he believed no license was needed because most of the original stories were no longer protected by copyright. However, the Doyle estate demanded a $5,000 license from Random House, which complied and published the anthology. 

Klinger and his co-editor planned a sequel, "In the Company of Sherlock Holmes," negotiating with Pegasus Books for publication. Before the project was finalized, the Doyle estate informed Pegasus that it would need a license to publish the sequel. The estate threatened to prevent distribution through major retailers if Pegasus proceeded without a license, explicitly stating the potential consequences, including the possibility of litigation for copyright infringement under the Digital Millennium Copyright Act if the book was published unlicensed.

Pegasus, like Random House, declined to publish "In the Company of Sherlock Holmes" without Klinger obtaining a license from the Doyle estate. Instead of securing a license, Klinger initiated a lawsuit against the estate for a declaratory judgment, asserting his right to use material from the 50 Sherlock Holmes works that are no longer under copyright. He is restricted from using any original content from the 10 remaining copyrighted stories. The required level of originality is minimal, as established in relevant case law. The Doyle estate failed to respond to Klinger’s complaint, prompting him to seek summary judgment, which the district judge granted, leading to the estate’s appeal. 

The estate challenges the judgment on two grounds: first, asserting a lack of subject-matter jurisdiction due to no actual case or controversy; second, if jurisdiction exists, claiming entitlement to a judgment on the merits based on the argument that the copyright on characters like Sherlock Holmes remains until the last story featuring their full complexity enters the public domain. The estate contends that the earlier stories' public domain status does not allow for the copying of characters that have not yet been fully developed. 

The excerpt emphasizes that federal jurisdiction is constitutionally limited to actual legal disputes, prohibiting advisory opinions. Declaratory judgments are allowed only in cases of actual controversy, meaning Klinger needed to demonstrate a real dispute regarding the estate's potential reaction to the publication to seek such a judgment.

The Doyle estate has indicated an intent to obstruct the publication and distribution of Klinger's book by pressuring major retailers like Amazon and threatening legal action for copyright infringement against Klinger and his co-editor. This situation has created a concrete controversy, prompting Klinger to seek a judicial declaration that the estate's actions constitute groundless copyright claims, thereby infringing on his legal rights and causing injury. Klinger aims to resolve the dispute before publishing to avoid potential injunctions and damages, which could amount to substantial statutory damages if he loses a copyright infringement suit.

The estate argues that Klinger's lawsuit is premature and lacks jurisdiction since the book isn't completed, making it unclear whether it infringes any copyrights. However, Klinger’s request for a declaratory judgment focuses solely on whether he can use characters from public-domain works, which does not depend on the book's content. Klinger asserts that his book will only include material from public-domain stories and contains no copyrightable content from the later stories still under copyright. Delaying the suit until the book is finished might deter authors from seeking declaratory judgments when threatened with copyright infringement claims or distribution boycotts. Additionally, the district judge may have been misled regarding the nature of the copyright challenge due to incorrectly labeled exhibits, which influenced the denial of summary judgment concerning the later stories.

The absence of a final judgment in the district court could potentially negate jurisdiction for the appeal; however, the plaintiff is not contesting the validity of copyrights on the last ten Sherlock Holmes stories. The plaintiff acknowledges that these copyrights are valid and aims to include only the characters of Holmes and Watson from earlier works in his book. A summary judgment regarding the last ten stories was deemed erroneous and can be disregarded. The district court's declaratory judgment, which focused solely on earlier works, effectively concluded the litigation there.

The main legal question is whether copyright protection for a fictional character can extend beyond the expiration of its copyright due to alterations in later works. The Doyle estate claims that the original character cannot be copied without a license until the copyright on the later work expires. However, there is no statutory or case law support for extending copyright past its expiration. Once a story enters the public domain, its elements, including characters, become available for use by other authors, as established in Silverman v. CBS Inc. The court ruled that copyright protection applies only to original works and that derivative works do not extend the copyright of the underlying original characters.

In this context, the ten Holmes-Watson stories are derivative of earlier works, meaning only original elements added later remain protected. The right to create new works based on public domain materials is valid unless it conflicts with existing copyrights, which is not the case here. The Doyle estate argues that disallowing post-expiration copyright protections might stifle creativity, as authors could be disincentivized to develop characters that have lost copyright protection due to competition from other authors.

Extending copyright protection could hinder creativity by limiting the public domain, thereby increasing the costs for authors who would need to obtain licenses for existing works. The estate's claim for a license fee from Pegasus highlights this concern. While some copyrighted works contain public domain material, an extended copyright term reduces the available public domain, complicating the creation of new works. The estate suggests that this could encourage authors to focus on existing characters to prolong copyright rather than innovate new ones, ultimately stifling creativity.

The estate attempts to distinguish between "flat" and "round" characters, suggesting that round characters, like Holmes and Watson, evolve over time, while flat characters do not. This distinction was illustrated through analogies involving various literary characters and is further complicated by the timeline of their stories. The estate posits that later portrayals of characters should extend copyright protections. However, the argument that the evolution of characters justifies extending expired copyrights is contested, as the essence of characters like Holmes and Watson is already established in earlier stories. The discussion also references the Star Wars films to illustrate the complexities of character development and copyright expiration, questioning the relevance of the estate's definitions in the context of copyright law.

Holmes's character has evolved over time, notably developing a fondness for dogs and Watson's marital history, which are features protected by copyright in later stories. Klinger aims to replicate the earlier versions of Holmes and Watson, which are no longer under copyright. The Doyle estate argues there is no standard to protect the incremental character development unless the characters are indistinguishable across different stories; however, distinct changes in characters over time can justify copyright protection for their later portrayals. The text references examples from Shakespeare to illustrate how characters can evolve while remaining copyrightable. The original Holmes and Watson were distinct and copyrightable, with later stories adding features that are also protected. The concern of the Doyle estate lies in the potential misrepresentation of Holmes's character, which could confuse readers and dilute the brand's integrity, akin to trademark dilution. This analogy highlights the fear of a modern author's depiction tarnishing the legacy of the original works.

Copyright law does not have a specific doctrine regarding parodies or burlesques of copyrighted works, which may or may not infringe based on the circumstances, as clarified in Campbell v. Acuff-Rose Music, Inc. There is no infringement related to stories or characters not under copyright. The Doyle estate is primarily concerned with any stories featuring Holmes or Watson that are published without a licensing fee payment, rather than specific changes in their portrayals by other authors. Extending copyright protection for literary characters as proposed by the estate raises significant doubts about its impact on creativity and lacks legal justification, as Congress has not authorized such extensions. The estate's pursuit of 135 years of copyright protection for Sherlock Holmes, from the first story in 1887 to 2022, raises concerns about the potential for nearly perpetual copyright, which would violate the constitutional provisions limiting copyright protection to "limited Times." The court affirmed this perspective.