In a coincidence they should make a movie about, two strikingly similar cases were reported in the space of a few days in which the ownership of movie related designs were in dispute. Ray Coyle dons Stormtrooper helmet and Cyclops sunglasses and reports from California and the Strand.
Topic: Intellectual Property
Who: Lucasfilm, Twentieth Century Fox, Oakley and Andrew Ainsworth
When: April 2008
Where: United States District Court, California / High Court, London
Law stated as at: 30 April 2008
Two unrelated cases are being bought before the courts in the United States and UK, both involving the ownership of the intellectual property rights in movie related merchandise and paraphernalia. On the face of it, there are striking similarities. Lucasfilm commissioned Mr Ainsworth to create helmets and uniforms for the iconic Stormtrooper characters in the 1977 Star Wars movie. Twentieth Century Fox commissioned Oakley to create sunglasses to be worn by the Cyclops character in their Fantastic Four movie.
It appears that neither of the movie companies appreciated the value of the intellectual property rights in the commissioned works until much later as there was no written agreement as to their ownership in either case. This is more understandable in the case of Lucasfilm as movie merchandising was in its infancy in 1977 and, indeed, it was their success in marketing Star Wars merchandise that is largely credited with turning it into a multi-billion dollar industry.
The two cases diverge in the way in which the disputes arose. It is Oakley that is bringing an action against Twentieth Century Fox for breach of its patent rights by selling sunglasses similar to those used in the movie in promotional packs. However, it is Lucasfilm that is suing Mr Ainsworth for breach of its copyright in the Stormtrooper helmets and uniforms by selling replicas of these to fans. Despite the difference in the nature of the disputes, the central issue is the same: who owns the rights, the manufacturer of the prop or the movie company that commissioned it? Surprisingly, the outcome is likely to be different in the two cases.
Oakley v Twentieth Century Fox
Oakley based their design for the sunglasses supplied for the movie on an existing product, their "Penny" sunglasses, for which they had been granted a US Design Patent in 2003 (Design Patents are not available in the United Kingdom but Oakley could gain a similar degree of protection through a Registered Design). The sunglasses designed for the movie, and therefore the later copies of these sunglasses created by Twentieth Century Fox, were therefore sufficiently similar to the protected Oakley design to potentially infringe Oakley's patent.
Twentieth Century Fox can certainly argue that it commissioned the Cyclops glasses and therefore any new intellectual property that came into existence in the course of their design should belong to them. Unfortunately, it is likely that there was very little by way of new intellectual property created in the course of modifying the Penny sunglasses. Neither is there any way in which rights to that intellectual property could be exploited without breaching the pre-existing Design Patent. It seems, therefore that Oakley have a strong case.
Lucasfilm v Andrew Ainsworth
Mr Ainsworth similarly claims that the products provided to Lucasfilm were merely modifications of his own designs. However, he does not have any pre-existing registered rights or even any documentation to support his claim as he contends that the helmets, in particular were made without any prior design, sketches or prototypes. These factors seem to have been central to Mr Ainsworth's loss in a similar case in California in 2006.
Lucasfilm claim that the designs were created by Lucasfilm and were already in place when Mr Ainsworth was hired to simply manufacture the props. Undeterred, Mr Ainsworth has countersued Lucasfilm for a share of the merchandising revenue form the series of Star Wars movies, which his lawyers estimate to be in the region of $24 billion.
In the absence of a written agreement, the courts will look at the facts to determine what the parties intended in respect of the ownership of intellectual property rights arising from commissioned works. Historically, courts on both sides of the Atlantic have tended to side with the commissioning party and will generally require some tangible evidence to convince them otherwise. In their Design Patent, Oakley appears to have such tangible evidence. Unfortunately for Mr Ainsworth, it appears that he does not.
One interesting issue that the High Court will be asked to consider in the Star Wars case is whether the relevant intellectual property rights are still in force. Copyright in artistic works is protected in the UK for the life of the author plus seventy years. Lucasfilm will no doubt contend that the Stormtrooper helmet design is an artistic work and was created by George Lucas, who is very much alive. However, s.52 of the Copyright, Designs and Patents Act 1988 provides that the term of copyright will be reduced to 25 years if the work is "industrially produced". A work is industrially produced if more than fifty articles are made and the period runs from when the articles are first marketed.
As Mr Ainsworth claims to have made 56 Stormtrooper helmets in 1976, it is entirely possible that the High Court will find that Lucasfilm's rights have expired.
Why this matters:
As ever, cases such as this demonstrate the need to have a written agreement in place when commissioned works may give rise to intellectual property rights.
The Fantastic Four case is likely to provide useful, albeit under United States law, guidance on the extent to which the ownership of a new, commissioned design can be restricted by a previous registered right held by the commissioned party.
The Star Wars case promises to be more interesting. At its heart is Lucasfilm's assumption that their works are artistic and should be protected by copyright. Although the term of copyright protection has been gradually increased over past decades, legislators have sought to ensure that this extended protection does not apply to designs. If the High Court finds that either the production of props for the movie or subsequent merchandising amounted to industrial production, the protection afforded to the work will be limited to that afforded to designs, 25 years, which would mean the last episode for their case.
Having said this, given the lasting, and frequently generation-spanning appeal of many Hollywood blockbusters, we should not expect the movie industry to take such a notion lightly. Should Mr Ainsworth succeed in the High Court, we can probably expect to see him in the Court of Appeal shortly afterward.