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IP/Entertainment Case Law Updates

Daniels v. Walt Disney Company

District court holds that “Moodsters” characters created by child-development expert and allegedly copied in Disney’s animated film “Inside Out” were not sufficiently delineated or distinctive to be entitled to copyright protection, and that plaintiff’s implied-in-fact contract claim fails because she published her idea for “Moodsters” before allegedly pitching her work to Disney, dismissing plaintiffs’ claims with partial leave to replead.

Denise Daniels, a child-development expert who has appeared on national television, and plaintiff The Moodsters Co. brought claims for copyright infringement and breach of implied-in-fact contract against the Walt Disney Co. and others involved in the production of Disney Pixar’s animated film “Inside Out.” Plaintiffs alleged that the movie infringed their copyright in four characters and in the ensemble of characters found in a “bible” for a proposed animated television show titled “The Moodsters” and a pilot episode posted to YouTube.

“The Moodsters” is a cartoon world designed by Daniels with characters that represent specific emotions designated by color — such as sadness (blue) and anger (red). Daniels and The Moodsters Co. published a “bible” for “The Moodsters” in 2005 and posted the pilot episode on YouTube in 2007. Starting in 2006, plaintiffs allegedly pitched the work to Disney several times. Disney Pixar later developed and released the 2015 film “Inside Out,” which details the story of five anthropomorphized emotions living inside an 11-year-old girl’s mind and grossed over $850 million globally. Plaintiffs did not allege copyright infringement in “The Moodsters” as a whole work but in the individual characters.

On defendants’ motion to dismiss the complaint, the court analyzed the copyright claims through the Ninth Circuit’s three-part test for protection of a character separate from the work in which it appears, set forth in the 2015 decision DC Comics v. Towle. To be protectable, a character must (1) have “physical as well as conceptual qualities,” (2) “be sufficiently delineated to be recognizable as the same character whenever it appears” and (3) be “especially distinctive and contain some unique elements of expression.” While the court was satisfied that plaintiffs met the first element, as the characters were represented visually in the bible and pilot episode, the court found plaintiffs failed to establish the other elements.

The district court contrasted characters that courts have found sufficiently delineated, including James Bond, Batman, Superman, Tarzan and Sherlock Holmes, with the Moodsters characters in Daniels’ work. James Bond, for example, has character traits that persist through various films and iterations of actors such that his character is “instantly recognizable” when he appears. On the other hand, the Moodsters characters were only “lightly sketched” in the bible and pilot. Daniels’ happiness character “wakes up each morning with a smile on his face,” and her sadness character is “prone to doom and gloom”; the court found these traits were not specific enough to make the characters sufficiently delineated. In addition, the court found the characters were not widely recognizable, since they were distributed in only two works, the pilot had only 1,400 viewers and the characters had different names in the bible and the pilot.

The court next analyzed whether Daniels’ characters were especially distinctive. Plaintiffs argued that the characters were identifiable based on their colors and emotions, but the court found that the pertinent question was whether the characters were identifiable in comparison to characters from other works. The court also found that the lightly sketched Moodsters characters simply “fit general stereotypical categories.”

The district court also rejected plaintiffs’ argument that the ensemble of characters was protectable even if no individual character was. While the court recognized the doctrine that “original selection and arrangement of unprotectable elements can render the configuration of those elements protectable,” it found that plaintiffs merely argued that the combination of characters added to their originality, but they failed to make a persuasive argument as to why the ensemble should be protected.

Daniels and The Moodsters Co. also alleged that Disney Pixar breached an implied-in-fact contract when plaintiffs pitched the concept of “The Moodsters” to Disney and Disney incorporated their idea into “Inside Out” but never compensated them. The court explained that under California law, no implied-in-fact contract can be created where the work was freely available before a plaintiff disclosed it to a defendant. The court took judicial notice of plaintiffs’ registration of “The Moodsters” bible with the Copyright Office in 2005, predating any alleged pitches of the work to Disney Pixar. Plaintiffs’ registration noted that the work was published in 2005 with no restrictions on the disclosure of the material. This doomed plaintiffs’ claim, which the court dismissed without leave to replead.

Summary prepared by Tal Dickstein and Joel Ernst

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