Carroll Shelby Licensing, Inc. v. Halicki

Ninth Circuit holds that custom Ford Mustang called “Eleanor,” which appeared in four films from 1974 to 2000, is not entitled to character copyright protection under Towle test and that licensor of custom car design did not breach settlement agreement relating to rights in certain Eleanor-like designs, affirming in part and reversing in part district court’s partial summary judgment and judgment after bench trial.

Defendant in this action, Denise Halicki, is the owner of copyrights to three films, Gone in 60 Seconds (1974), The Junkman (1982) and Deadline Auto Theft (1983). Halicki’s husband directed, produced, acted in and marketed the 1974 version of Gone in 60 Seconds. In that film, the protagonist and his team are tasked with stealing 48 types of cars, with each car being assigned a feminine code name such as “Donna” or “Karen.” A yellow 1971 Fastback Ford Mustang was assigned the name “Eleanor,” and the protagonist steals four of them throughout the film, including through a dramatic police chase. The Junkman featured a subplot “film within the film,” wherein the fictional director of Gone in 60 Seconds evades an assassination attempt before the fictional premiere of Gone in 60 Seconds. The protagonist drives a version of Eleanor, which was made to look like the car that the protagonist drove during the dramatic chase in Gone in 60 Seconds but with text painted on the side of the vehicle. Deadline Auto repurposed footage from the first two films in a slightly revised plot of the original Gone in 60 Seconds, and Eleanor’s appearance there is largely the same as in the original. 

In 2000, Hollywood Pictures/Walt Disney Company developed and released a remake of Gone in 60 Seconds under a 1995 licensing agreement with Halicki. The plot of the remake was similar to that of the original film, except Eleanor was the code name for a Shelby GT-500 Ford Mustang, which was also stolen and driven in a climactic police chase. After the release of the remake, Carroll Shelby Licensing licensed a custom car shop to produce GT-500E Ford Mustangs. Halicki filed a lawsuit against Shelby and the car shop for copyright infringement, among other claims, lleging that the car unlawfully copied Eleanor’s design (read our summary of the prior litigation here). Halicki and Shelby ultimately settled that lawsuit in 2009. 

After the settlement, Shelby licensed custom car shop Classic Recreations to manufacture “GT-500CR” Mustangs. Halicki viewed this as a violation of the settlement agreement, contacted owners and auction houses to assert copyright interest in the cars, and demanded that CR cease the production of the GT-500CRs. Shelby then initiated this lawsuit, claiming that Halicki breached the settlement agreement and seeking declaratory relief. Halicki asserted counterclaims for breach of the settlement agreement, along with copyright infringement claims as to Eleanor. The parties cross-moved for summary judgment, and the district court held that Eleanor was not entitled to character copyright protection. After a bench trial, the district court dismissed Halicki’s breach of settlement agreement claim but denied Shelby’s request for a declaration that the GT-500CR did not infringe Halicki’s rights. 

The Ninth Circuit affirmed the district court’s decisions on copyright infringement and breach of the settlement agreement, but reversed and remanded on the denial of declaratory relief. 

With respect to the copyright infringement claims, Halicki argued that Eleanor is copyrightable under the Ninth Circuit’s test for character copyright protection, as set forth in its 2015 decision in DC Comics v. Towle, in which the court held that the Batmobile is a copyrightable character. Under Towle, a character is entitled to copyright protection where: (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 displays “consistent, identifiable character traits and attributes”; and (3) the character is “especially distinctive” and contains “some unique elements of expression.” The panel rejected Halicki’s argument, holding that “Eleanor is not a character, much less a copyrightable one.” 

The panel first addressed whether Eleanor was a character with physical as well as conceptual qualities. Though the Ninth Circuit primarily focuses on physical qualities, “conceptual” qualities—such as anthropomorphic elements, acting with agency and volition, displaying sentience and emotion, expressing personality, and interacting with other characters—are “equally important,” the panel observed. The panel held that Eleanor failed at the first prong on the Towle test, as the car does not act with agency or volition, expresses no sentience or personality, and does not otherwise engage with the films’ protagonists. Instead, the panel likened Eleanor to a prop—one of many named cars in the films. 

The panel next addressed whether Eleanor was sufficiently delineated to be recognizable as the same character whenever it appears and whether it displayed consistent, identifiable character traits and attributes. The panel held it did not, as Eleanor’s physical appearance changed across the various films. The later Eleanors were also unrecognizable, as the films’ protagonists had to introduce them as Eleanor. To the extent the cars exhibited consistent traits, such as skill in “evading police” and “surviving spectacular jumps,” the panel considered those traits to be more readily attributable to the protagonists driving the cars, rather than to Eleanor itself. 

The panel then considered whether Eleanor was especially distinctive and whether it contained unique elements of expression. The panel concluded that Eleanor was not especially distinctive, as nothing distinguished it from any number of sports cars that appear in “car-centric” action films. Moreover, the name “Eleanor” is a common name, which distinguishes it from a “unique and highly recognizable name,” such as the Batmobile. 

Accordingly, the Ninth Circuit held that Eleanor was “not really a character,” and that even if it were, it would not be entitled to copyright protection under Towle. 

With respect to the parties’ breach of contract claims, the dispositive issue was whether the settlement agreement prohibited Shelby from manufacturing or licensing cars copying any of Eleanor’s distinctive features or, instead, only Eleanor’s distinctive hood and inset lights. The district court held that Shelby was prohibited from manufacturing or licensing only cars with the distinctive hood and inset lights, and the Ninth Circuit agreed. The settlement agreement contained clear language prohibiting the manufacture or license of the “exaggerated, raised hump feature of the Eleanor’s hood” and “the specific design of the Eleanor small dual headlights.” The panel declined to adopt Halicki’s “expansive reading” of the settlement agreement, which cherry-picked from other provisions of the agreement to attempt to broaden the restrictions imposed by it. The Ninth Circuit therefore affirmed the judgment that Halicki failed to establish a breach of the agreement. 

Lastly, the panel considered Shelby’s cross-appeal of the district court’s denial of a declaration that the GT-500CR did not infringe Halicki’s rights. The panel applied a de novo standard of review and reversed and remanded the district court’s decision. Here, a declaration would clarify and settle the legal relations between Shelby and Halicki and also afford Shelby relief from the uncertainty giving rise to this proceeding, the panel held. The panel further determined that such declaration should be consistent with the Ninth Circuit decision, i.e., that it would be appropriate to declare that the GT-500CR does not infringe any copyright interests in Eleanor or run afoul of the settlement agreement. The panel also noted that it would be inclined to grant Shelby’s request for declaratory relief as to the trademark and trade dress rights for the reasons stated in Shelby’s briefing, but it left those matters for the district court to address on remand. 

Summary prepared by Frank D’Angelo and Elena De Santis