The 9th Circuit withdrew its first opinion in this case, substituting one that affirmed the dismissal of Fleischer’s copyright claims and trademark claims based on the image of Betty Boop, while remanding for more clarification of the district court’s holding on the Betty Boop word mark. Fleischer, the successor in name but not in interest to the original Fleischer Studios, had a registered trademark in “Betty Boop.” The court of appeals reversed the ruling that the word mark’s fractured ownership history precluded secondary meaning, finding a triable issue of fact. The district court has now provided that clarification, holding that defendants’ use of “Betty Boop” was, in context, aesthetically functional, nonconfusing, and fair use.
Defendants, like Fleischer, license Betty Boop merchandise. Defendants’ merchandise incorporates elements from vintage movie posters (correction: some of the copyright status is disputed, but Fleischer isn't the copyright owner and has no standing to object on copyright grounds, per previous rulings); these elements include both images of Betty Boop and the words Betty Boop.
While the original court of appeals ruling was withdrawn, the district court still found its reasoning “sound and applicable.” Fleischer argued that there’s no such thing as aesthetic functionality in the 9th Circuit. While the court here acknowledged “some confusion,” it found that Au-Tomotive Gold made clear that the doctrine, while limited, was nevertheless viable, and Job’s Daughters was still good law. That case held that trademark law “does not prevent a person from copying so-called ‘functional’ features of a product which constitute the actual benefit that the consumer wishes to purchase, as distinguished from an assurance that a particular entity made, sponsored, or endorsed a product.” To distinguish between these two poles, the court must examine the goods themselves, the defendant’s merchandising practices, and evidence of consumer reaction. Au-Tomotive Gold set out a two-step test: the court must first ask whether an allegedly significant non-trademark function is essential to the use or purpose of the article or affects its cost or quality; if that’s not present, the court should still determine whether trademark protection would impose a significant non-reputation-related competitive disadvantage.
The district court examined the products, merchandising practices, and evidence of consumer reaction in the record, and found that, as a matter of law, defendants’ use was not a trademark use. As in Job’s Daughters, the defendants used the words Betty Boop prominently on their products, including t-shirts bearing movie poster images, dolls, and packaging adapted from movie posters. “Betty Boop” was a decorative component: “part and parcel of the aesthetic design of those goods.” Defendants never labeled their merchandise “official” or otherwise indicated that it was sponsored by Fleischer, but rather identified defendants as the source. Given the combination of “Betty Boop” as artistic design element and defendants’ own source-identification, “Betty Boop” simply couldn’t be seen as source-identifying. Unsurprisingly, Fleischer didn’t present a single instance of consumer confusion as to origin or sponsorship.
Apparently treating “trademark use” and “aesthetic functionality” as separate but related inquiries, the court then held that these same considerations rendered the use of the words Betty Boop aesthetically functional. Though the T-shirts would still be wearable without the words, and the dolls would still be toys, and would function in that sense (the court didn’t address whether this would affect the “quality” of the article, though I think it plainly would), “protection of the feature as a trademark would impose a significant non-reputation-related competitive disadvantage” on defendants. Defendants are entitled to market goods with Betty Boop’s image, but those products would be less marketable than the same product without the name, because Betty Boop names the famous character depicted on the goods/movie posters. (This is also understandable as a genericity ruling.) For example, one doll’s package has imagery from a Betty Boop movie poster, and a product tag that’s a miniature reproduction of the poster. The poster says: “Adolph Zukor presents BETTY BOOP with HENRY the Funniest Living American.”
Removing the words BETTY BOOP from these items would render the textual aspect of the poster reproductions incomplete and the remaining words would be nonsensical. It would be obvious to the average consumer that such merchandise would be missing something. Clearly, merchandise that is missing something is less marketable and therefore at a competitive disadvantage.
Also, given that the use wasn’t source-identifying and didn’t trade on any source’s reputation (as opposed to the reputation of Betty Boop, which defendants were free to provide), barring defendants from using the words would impose a significant non-reputation-related competitive disadvantage.
In the alternative, the use was descriptive fair use. It referred to a characteristic of defendants’ products: they featured Betty Boop. Whether a use is “otherwise than as a mark” depends on several factors in the 9th Circuit, including whether the term is used to attract public attention and whether the user took precautions such as labeling to minimize the risk that the term would be used in its trademark sense. Here, the use was in connection with products bearing Betty Boop’s image. “It is extremely unlikely that a prospective consumer would understand those words as identifying the source of the goods rather than merely naming the character.” And defendants indicated themselves as the source. As a matter of law, this was use other than as a mark.
Likewise, there was no triable issue on whether defendants were using the words in their descriptive sense: there were no other words available to describe Betty Boop, and the words “self-evidently” describe the goods. (This result could also have been achieved with nominative fair use, though that would presuppose the validity of plaintiff’s mark.) Given that defendants had the right to use the character despite Fleischer’s objection, they must necessarily therefore be able to identify the character by name. And no jury could find bad faith in the sense of intent to capitalize on Fleischer’s goodwill, because defendants weren’t using the mark as a source-identifier.
Finally, just in case you were worried, there was no triable issue of fact on likely confusion. The court didn’t run through the Sleekcraft factors because of the absence of trademark use. That test assumes that the defendant’s use is a trademark use, referring for example to the similarity of the “marks” and defendant’s intent in using the “mark.” Here there was no source-identifying use, and thus no way that the use could create the impression that the goods originated with anyone in particular. Fleischer invoked the doctrine of legal equivalents—words and pictures that have the same meaning can be confusingly similar. Thus, Fleischer argued, the court should find that images of Betty Boop infringed the Betty Boop word marks. Yes, they were equivalents, but that didn’t help Fleischer, since there was still a trademark use requirement, and Fleischer didn’t argue, much less show, that defendants’ use of the Betty Boop image was a trademark use. She didn’t look the same on all of the goods, so that was evidence against use as a mark, along with all the reasons that defendants’ use of the name wasn’t source-identifying.