The Website, owned and operated by Toonlead (the “Company”), features various animated characters from popular television shows and movies engaging in sexual acts. These animations are drawn by hand by the Company’s artists. In light of questions regarding potential intellectual property liability, this memorandum discusses the current state of law on the subject. This memorandum will separately consider actions for copyright infringement and trademark infringement.
Copyright Infringement
The Company’s use of the characters is fair use of any copyrightable elements of the characters being used and therefore does not constitute copyright infringement. Pursuant to 17 U.S.C. § 107, and the abundant case law applying and interpreting the statute, four factors are considered in determining whether a use of a copyrighted element is fair use and therefore non-infringing: (a) the purpose and character of the use, (b) the nature of the copyrighted work, (c) the amount and substantiality of the portion of the work used, and (d) the effect of the use on the potential market for or value of the work.
The Company’s uses of the original characters are artistic parodies, are covered by fair use and are not infringing the owners’ copyrights. An application of the four factors shows that the Company’s works are undoubtedly fair use of the original works.
The first factor, “the purpose and character of the use,” asks “to what extent the new work is transformative” and whether it “supplants” the original work. Where the new work adds something new to the world, with a different purpose or character from the original, that work is considered to be “transformative”. This factor is so important that the Supreme Court has stated that the more “transformative the new work, the less will be the significance of the other factors”.
As an artistic work of parody, the Company’s works completely transform the purpose and message of the original works by placing the characters in situations completely outside expectations – one of the hallmarks of parody (defining parody as “literary or artistic work that imitates the characteristic style of an author or a work for comic effect or ridicule.” (quoting American Heritage Dictionary 1317 (3d. 1992))).
Lastly with regards to the first factor, the Company’s commercial expectations from the parodies do not weigh against the Company with regards to purpose. Nearly all artistic work today, whether for comment or criticism, is conducted with an eye towards profit. Therefore, when the use of the copyrighted work is transformative, the commercial expectation does not weigh much.
Given all the above, the first factor weighs heavily in favor of the Company and is more significant than the other factors.
With regards to the second factor, “the nature of the copyrighted work”, though the original works are creative works within the sphere of copyright protection, this factor weighs little in the ultimate consideration. In the case of parody, this factor offers little help too because parodies almost invariably copy publicly known, expressive works.
The third factor, “the amount and substantiality of the portion used in relation to the copyrighted work as a whole”, weighs in favor of fair use because the Company uses only so much of the original works as necessary for its purposes. First, it should be noted that the Company does not simply copy the original works verbatim. No direct clips from the original works are copied by the Company. The Company’s artists must by necessity illustrate all of its works from scratch in order to make the immense changes necessary to accomplish its parodic purposes. While the characters in the Company’s work look similar to the original works, these similarities are incorporated into the new work and emerge imbued with a different character.
The fourth factor considers “the effect of the use upon the potential market for or value of the copyrighted work”. It’s obvious that the Company’s sexually explicit encounters between characters in the original works will serve as a market substitute for the originals themselves. It’s clear that the Company’s works specifically will not usurp the original works, and in the case of parody, the copy will never affect demand for the original at all, much less ‘supplant’ it.
In light of all the foregoing, the determinative factors weigh heavily on the Company’s side, including the most important first factor. Given this analysis, and the supporting case law, the Company’s use of the original works constitutes fair use and therefore does not infringe the copyrights in the original works.
Trademark Infringement
To the extent that the right holders own trademark rights, in the appearance of the characters that are used by the Company in its works, the Company’s use of the characters is (a) not causing confusion, (b) protected by the First Amendment, and (c) nominative fair use. Each one of these factors is sufficient for a finding of non-infringement. But where, as here, all three defenses exist, the Company is not found to be infringing any of the trademark owners’ trademark rights in the original works.
The purpose of trademark rights is to avoid confusion for consumers by “preventing others from duping consumers into buying a product they mistakenly believe is sponsored by the trademark owner”. Where there is no confusion as to the source of the product, there cannot be trademark infringement.
It goes without saying that a consumer would not be confused to believe that the works on the Company’s website have come from the trademark owners. The style of the drawings is different. The characters are engaged in acts that wouldn’t be advanced by the trademark owners. The website features characters from many different properties owned by many different companies. And neither the names of the television shows or the companies that own them are listed anywhere on the website. Each of these factors would be enough to dispel any likelihood of confusion in consumers, but all of them put together make it effectively impossible for any reasonable consumer to be confused.
It is unquestionable that the Company’s works have artistic relevance to the original works- they are parodies of the original works. The Company’s works are constitutionally protected expressions of artistic relevance both in-and-of-themselves and as a critique of the originals. Because the works have this artistic relevance to the originals, the Company’s works cannot be infringing. This is especially true in light of the fact that, as explained above, the Company neither explicitly nor implicitly misleads anyone as to the source or the content of the work.
Finally, the Company’s use of the trademarks in the original works is nominative fair use. The Company uses the appearances of characters in its works to conjure up associations of the originals, but at the same time it is identifying its own works, which are parodies of the originals.
There are three part test to determine whether a use of a trademark qualifies as nominative fair use: “First, the plaintiff’s product or service in question must be one not readily identifiable without use of the trademark; Second, only so much of the mark or marks may be used as is reasonably necessary to identify the plaintiff’s product or service; and third, the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder “.
The Company’s use easily satisfies the first element because its use of the likenesses of the characters from the original works is reasonably necessary in order to conjure up the characters. The Company also satisfies the second element because it uses no more of the likenesses than is reasonably necessary under the circumstances. The Company simply uses the likeness of the characters as drawn by the Company’s artists. It does not use the names of the television shows from which they come or even the name of the companies that own or license the shows. There is no way for the Company to create its art without using the likeness of the characters. Third, the Company does nothing to suggest sponsorship or endorsement. As already stated, the Company does not even use the names of the television shows they come from or the owners of those shows. It should also be noted that the Company is not required to make affirmative statements that its products are not sponsored by the rights holders.
Thus, the Company’s works do not infringe on the rights holders’ trademark rights in the appearances of the characters from the original works (if in fact any such rights exist).
Conclusion
The Company is not liable for actions of copyright infringement and trademark infringement. The Company’s use of the likeness of characters from the original works is non-infringing and protected by principles of fair use and free speech.
The memorandum is based on the results of a research carried out by
Boston Law Group, PC
825 Beacon street, suite 20
Newton Centre, Massachusetts 02459
Copying without the Company’s explicit agreement is strictly forbidden.
Toonlead limited
Dimitrakopoulou 3, 1090, Nicosia, Cyprus
e-mail: support@dcnetservice.com
tel.: +44 1315165521
