Finnegan's monthly review of essential decisions, key developments, evolving trends in trademark law, and more.

December 2012 Issue

Civil Cases

Fleischer Studios, Inc. v. A.V.E.L.A., Inc.,
No. CV-06-6229 (C.D. Cal. Nov. 14, 2012)


Max Fleischer, the head of Fleischer Studios, Inc. (“Original Fleischer”), created the Betty Boop character in the 1930s and developed a number of Betty Boop cartoon films.  In 1941, Original Fleischer sold its rights in the Betty Boop character and films to Paramount Pictures, Inc., the first of several subsequent sales involving interests in the Betty Boop character and/or films.

Plaintiff Fleischer Studios, Inc. (“Fleischer”), a new entity created by Max Fleischer’s family in the 1970s under the same name, claimed that it owned copyright and trademark rights to the Betty Boop character through a multiple-step chain of title involving numerous entities over a time period from 1941 to 1997.  It filed suit against the defendants for copyright and trademark infringement based on use of the Betty Boop image and name on dolls, t-shirts, and handbags.

Defendant A.V.E.L.A., Inc. and others (collectively “A.V.E.L.A.”) claim the right to license the Betty Boop image to third parties based on A.V.E.L.A.’s copyright in restored vintage posters that were based on works in the public domain. 

On summary judgment, the district court originally found that Fleischer did not have valid copyright or trademark rights in the Betty Boop name or image, and that defendants had not used the BETTY BOOP wording as a trademark or in a way likely to cause consumer confusion.  The Ninth Circuit affirmed summary judgment in favor of A.V.E.L.A., holding sua sponte that the defendants’ uses were aesthetically functional.  Following widespread criticism, the court withdrew its opinion and issued an amended opinion, which made no mention of aesthetic functionality.  The amended opinion upheld judgment for the defendants on the copyright claims and on the image-mark claims, but vacated the ruling on the BETTY BOOP word-mark claims, remanding to the district court for further findings.  Specifically, the Ninth Circuit indicated that it was unable to ascertain a legal basis for the district court’s “unexplained conclusions” that the defendants’ uses were neither trademark uses nor likely to cause confusion.  On remand, the district court limited itself to reexamination of these prior “unexplained” rulings.

Acknowledging that its previous order concluding that defendants had not used the BETTY BOOP wording as a trademark “did not provide much reasoning,” the district court asserted that the Ninth Circuit’s original but withdrawn opinion did.  Finding it “sound and applicable” despite being withdrawn, the district court once again concluded that the defendants had not used BETTY BOOP as a trademark, this time expressly relying on the doctrine of aesthetic functionality.

Citing, as the Ninth Circuit had initially done, both International Order of Job’s Daughters v. Lindeburg & Co., 633 F.2d 912 (9th Cir. 1980), and Au-Tomotive Gold, Inc. v. Volkswagen of America, Inc., 457 F.3d 1062 (9th Cir. 2006), the district court concluded that since the Betty Boop images on the defendants’ merchandise were decorative, not source identifying (and it had already been determined that the defendants could use those images), it would put the defendants at a significant competitive disadvantage if they could not use the wording BETTY BOOP in connection with their otherwise permissible use of the images.  The court noted that the defendants had always included their own name and brand in connection with the merchandise.

Alternatively, the court found that even if the uses of BETTY BOOP were not aesthetically functional, they constituted fair use as a matter of law.  According to the district court, if defendants could use the images of the Betty Boop character, they must also be permitted to identify the character by name.  Thus, the defendants’ use of the BETTY BOOP wording was solely to describe its merchandise and the character depicted, and not source identifying.

Accordingly, the district court held that “whether defendants’ use of the word mark fits within the aesthetic functionality doctrine, or, alternatively, is a fair use, the ultimate conclusion is the same:  Defendants’ use does not indicate a source or origin of the products, and is therefore not a trademark use.”  The court granted summary judgment in favor of defendants.

Although the case does resurrect the doctrine of aesthetic functionality, it is important to note the specific facts in this case and the necessary limitations.  In particular, the defendants had rights to use the character’s image, and the words at issue were the only means necessary to identify the character depicted.