Inside Out: The Ninth Circuit Holds The Moodsters are No Batman

by James Kachmar
The IP Law Blog

(This article was republished with permission by ABA Business Law Today on 6/2/2020, available here.)

Certain literary or graphic characters may, in some cases, enjoy copyright protection. Think James Bond – or Batman and even his Batmobile.  Recently, the Ninth Circuit was called upon to determine whether the Moodsters, “anthropomorphized characters representing human emotions,” are subject to the same copyright protection as Batman.  Sadly, the Ninth Circuit concluded they do not.

The Moodsters were created by an expert on children’s emotional intelligence and development, Denise Daniels. She created the Moodsters to “help children cope with strong emotions like loss and trauma.”  In 2005, Ms. Daniels and her team released an initial product called The Moodsters Bible.  The Moodsters Bible told the story of five characters who were “color-coded anthropomorphic emotions” that represented a different emotion: pink–love, yellow-happiness, blue-sadness, red-anger and green-fear. Two years later, Ms. Daniels and her team released a 30-minute television pilot featuring the Moodsters called, “The Amoodsment Mixup.”  In 2015, Ms. Daniels and her team had developed a line of toys and books featuring the Moodsters that were sold at Target and other retailers.

Ms. Daniels claimed that she pitched the Moodsters concept to several entertainment companies, including the Walt Disney Company and its affiliate, Pixar, between 2005 and 2009.  She claimed she had contact with Thomas Staggs, the CFO of the Walt Disney Company, and that he had informed her that he would share information about the Moodsters with Roy E. Disney, the son of Disney’s founder.  Ms. Daniels also claimed that at some point she spoke with film director, Pete Docter, about the Moodsters.

In 2010, Disney began development of its movie, Inside Out, which was released in 2015.  Inside Out focuses on five anthropomorphized emotions “that live inside the mind of an 11 year old girl named Riley.”  These emotions represent joy, fear, sadness, disgust and anger.  The film was directed by Peter Docter who also co-wrote the screenplay. He claimed that he got the idea for the film by “the manner with which his 11 year old daughter dealt with new emotions as she matured.”

In 2017, Daniels sued Disney for breach of implied in fact contract in connection with Inside Out.  She then filed an amended complaint, which joined her company, The Moodsters Company, and sued for copyright infringement “of both the individual Moodsters characters and the ensemble as a whole.  Disney moved to dismiss, which was granted by the district court on the grounds that “The Moodsters are not protectable by copyright.”  Daniels appealed that ruling to the Ninth Circuit. (This article does not address Ms. Daniels’s implied contract claim.)

The Ninth Circuit began by recognizing that “[a]lthough characters are not an enumerated copyrightable subject matter under the Copyright Act, … there is a long history of extending copyright protection to graphically depicted characters.”  For instance, the Ninth Circuit cited to its prior decision in DC Comics v. Towle, 802 F.3d 1012 (9th Cir. 2015), in which it held that the Batmobile was entitled to copyright protection.  In the Towle case, the Ninth Circuit adopted a three-prong test for determining whether a character is entitled to copyright protection: (1) The character has “physical as well as conceptual qualities;” (2) the character is “sufficiently delineated to be recognizable as the same character whenever it appears” and “display(s) consistent identifiable character traits and attributes;” and (3) the character is “especially distinctive” and “contain[s] some unique elements of expression.”  The Ninth Circuit examined whether The Moodsters satisfied this three-prong test.

The Court recognized that Disney did not contest the first prong – that each of the individual Moodsters had physical as well as conceptual qualities.  Given that they had physical qualities, “[t]he Moodsters are not mere literary characters.”

However, it was the second prong that proved to be the biggest hurdle for Ms. Daniels and her Moodsters.  The Ninth Circuit reasoned that “a character that lacks a core set of consistent and identifiable character traits and attributes is not protectable, because that character is not immediately recognizable as the same character whenever it appears.”  The Ninth Circuit contrasted The Moodsters with recognizable characters like Godzilla or James Bond who, while their physical characteristics could change over time, they maintain “consistent and identifiable character traits and attributes across various productions and adaptations.”

The Ninth Circuit continued by noting that the use of “a color to represent a mood or emotion is an idea that does not fall within the protection of copyright.”  In fact, it noted that “the idea of color psychology is involved in everything from decorating books to marketing and color therapy …” and that “color and emotion are also frequent themes in children’s books, such as Dr. Seuss’s classic, My Many Colored Days.…”  The Ninth Circuit also noted that “colors themselves are not generally copyrightable” nor “is the `idea’ of an emotion copyrightable.”  Thus, the Ninth Circuit concluded that Daniels could not “copyright the idea of colors or emotions, nor [could] she copyright the idea of using colors to represent emotions where those ideas are embodied in a character without sufficient delineation or distinctiveness.”

It was this last issue, “sufficiently delineated,” that especially troubled the Ninth Circuit.  First, the Court noted that the physical appears of The Moodsters had “changed significantly over time.”  When they first appeared in the 2005 Bible, they had an insect-like appearance.  By the time they appeared in retail stores in 2015, they looked “like small loveable bears” with “a detective’s hat and small cape.”  While The Moodsters’ representation of the five human emotions had not changed over time, the descriptions of each character had. For instance, the 2005 Bible described each character with a few short paragraphs, however, these descriptions were no longer mentioned in the 2007 television pilot.  Furthermore, in every iteration of The Moodsters, they had different individual names.  Finally, while initially each character related to its emotion in its own way, for instance, the “anger” Moodster would become angry; the Moodsters were “mood detectives” by 2015 trying to help a young child discover his emotions.

The Ninth Circuit then contrasted the ever-changing Moodsters with that of the Batmobile that it considered in Towle.  The Court noted that over a 25-year period, “the Batmobile had numerous identifiable and consistent character traits and attributes” and that it was always referred to as “a crime fighting car,” had jet engines and modern weaponry and could “navigate through landscapes impassible for an ordinary vehicle.”

Finally, even if the Ninth Circuit concluded that the Moodsters could satisfy the second prong, they would also fail the third prong in that they were not “especially distinctive.”  The Ninth Circuit compared the Batmobile, which consistently had the same name over time, with the Moodsters who had at least three entirely different sets of names over time. Therefore, they were not “especially distinctive” and could not meet the third prong of the Towle test either.

The Ninth Circuit did disagree with the lower court, however, in its conclusion that the Towle test was the only possible analysis for determining whether a character was entitled to copyright protection.  The Ninth Circuit recognized that it had decided nearly 60 years ago in Warner Bros. Pictures v. Columbia Broadcast System, 216 F.2d 945 (1954), that a character could be entitled to copyright protection if it constituted “the story being told” in a particular work. However, “a character is not copyrightable under this test where `the character is only the chessman in the game of telling the story’.”  The Ninth Circuit noted that this is a “high bar since few characters so dominate the story such that it becomes essentially a character study.”

The Ninth Circuit concluded, however, that even under the Warner Bros. test, the Moodsters were not entitled to copyright protection.  Given that the Moodsters were introduced in the 2005 Bible with short descriptions, “these pithy descriptions do not constitute the story being told” as required by the Warner Bros. test.  By the time of the 2007 television pilot, there was even less character development such that “The Moodsters are mere chessmen in the game of telling the story.” Thus, even under the alternative Warner Bros. test, the Moodsters were not copyrightable.

Finally, Ms. Daniels argued that even if the individual Moodsters were not copyrightable, then the ensemble of the five Moodsters should be entitled to copyright protection.  The Ninth Circuit rejected this claim on the ground that whether you described The Moodsters individually or as an ensemble, it did not change the analysis as to their “distinctiveness” or “degree of delineation.”

The Ninth Circuit’s decision in the Daniels case makes clear that it is extremely rare that a particular character will be entitled to copyright protection.  Only those characters which are or have a consistent level of distinctiveness or degree of delineation could possibly qualify for copyright protection.