AVELA argues that Frank Baum's 1900 book the Wizard of Oz (clearly in the public domain) contained the characters, and that any protection later obtained by WB in their derivative film versions of the characters cannot reach back in time to protect the images on the movie posters. According to AVELA, even though the characters on the prints are the same as the ones in the film, the prints are in the public domain, end of story. In other words, AVELA doesn't use images taken from the film itself or other copyrighted materials so their use is fine. The District Court discusses the availability of copyright protection for characters at length (it is "elementary" that protection is available if there are "consistent, widely identifiable traits," unique "physical and conceptual qualities" etc.), and AVELA doesn't appear to contest the availability of protection under appropriate circumstances.
The issue of "general" versus "limited" publication under the 1909 Act also pops up. Basically, state copyright applied to works under the 1909 Act until their publication, at which point they could obtain federal protection by complying with statutory formalities, otherwise they'd fall into the public domain. AVELA argues that distributing the posters to movie theaters for display to the public constitutes "general publication" and that by failing to meet the statutory notice and registration formalities, WB forfeited copyright protection and the work attained public domain status. The District Court sidesteps the issue of whether the posters are in the public domain, assuming away the relevance of this essential point by conflating fame with protectability:
"Defendants' argument that, even if the characters would be entitled to copyright protection, the characters are no longer protected because the publication of the characters in the public domain materials caused them to become public domain material as well, is unavailing. The publicity materials with pictures of the actors in costume are just that-- picture of actors. It is necessarily through the films that the characters become copyrightable. But for the films, these characters would remain literary figures without the particular idiosyncracies that have established each character as a unique icon in American culture." (emphasis in original)In a way, the District Court is saying that images contained on public domain materials that later gain copyright protection and notoriety in another format can resurrect the public domain images back into copyright protection. This ignores clear precedent that once in the public domain, always in the public domain (ignoring the policy difficulties of copyright restoration acts, an issue not relevant here). At the same time, the court is also addressing AVELA's argument that all later pictorial representations of the characters cannot be protected because of the public domain posters, which is something it would be great to have a clear Eighth Circuit ruling about. Remember, AVELA used reproductions of the character's images taken from the public domain prints, not from the movie or other copyrighted materials. Does this exploit a hole in the 1909 Act formality-full regime? Sure. Does the conclusory analysis above address the issue head on? I don't think so. On a broader note, I do think that unfair competition and tort law, the roots of copyright infringement analysis, should be used in more direct ways to settle disputes involving use of creative works. However, that's not the law.
It is interesting to note that neither party addressed the fact that Baum's book was illustrated. I didn't compare all the images in the book, but there are some similarities revealed by a quick scan through Google Books. One troubling aspect of the District Court's opinion is their statement that defendants "do not merely copy the movie artwork [the posters], rather, they pluck from these pages images of Plaintiff's copyrighted characters such that Defendant's images are no longer innocently copied publicity ads, but are indeed the characters themselves..." (emphasis in original) First, there is no intent element in copyright infringement, so "innocent" copying does not matter unless calculating damages. Second, the whole point of using a public domain work is to use it however one wants.
Since WB's derivative work can only protect what they've added to the original, AVELA's argument seems counterintuitive. They concede they've copied elements that WB added-- the posters are of actors and characters from the movie-- but the posters they copied the elements from aren't copyrighted, although those elements arguably became protected later along with the movie's copyright. Thus, WB argued in the District Court that AVELA's copies were "substantially similar" to their protected elements and won. Despite the District Court's analysis, WB has a pretty good argument here. If someone uses a public domain work to produce a new work that is substantially similar to a protected work, there is still infringement. But the underlying issue is more subtle. If someone uses a public domain work (the movie poster) to produce a new work (the t-shirts) that is found to infringe a protected, altered copy or version of the public domain work (the movie), one is left wondering how much more we can shrink the public domain before it becomes a useless puddle of only the most trivial ideas.
Although Warner's appellate brief is very persuasively written, I think AVELA has the better argument. Certainly they do as a matter of policy. I realize the business imperatives of enforcing your IP when necessary, but I'd rather see the studio divert their monies from defending seventy year old works to simply investing in the creation of new works. Is there really that much of a market for Wizard of Oz t-shirts? More important, AVELA notes that users of public domain materials must be able to use any or all of a public domain work, in whatever way they want. Warner's brief strongly suggests that users of public domain materials should be limited to the same or similar medium of expression as the original and that the public domain work must be re-used in its entirety. Indeed, the District Court's injunction against use of the Wizard of Oz images allows use of the images on the posters only in their entirety-- basically, no "plucking." This is at odds with common sense, the existence and idea of a public domain, and promoting creativity. To say otherwise would extend protection where it does not and should not belong. After looking at the images of what AVELA's licensees produced, and realizing that they are the actual characters, one almost feels a sense of unfair competition. Certainly the District Court did. Then again, who are we kidding? The harsh formalities of the 1909 Act (which I think should be reintroduced into US law to some degree, although those pesky international copyright agreements would surely prohibit this outcome, at least for foreign authors) must win here, along with a reminder that boundaries still exist. The arguments get a bit circular and seem to cut either way, but the key is that copyright protection in a later derivative work should not extend backwards to elements shared with an unprotected work.