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IP/Entertainment Case Law Updates

K and K Productions, Inc. v. Walt Disney Studios Motion Pictures

District court grants Disney’s motion to dismiss, finding its Toy Story 4 character Duke Caboom did not violate plaintiff’s intellectual property and publicity rights in Evel Knievel. 

Evel Knievel was a motorcycle daredevil who set multiple world records through his death-defying stunts, which sometimes resulted in “spectacular falls.” He was recognized for his “iconic wardrobe: a white jumpsuit embellished only by star-spangled red, white, and blue patriotic insignia with a matching white cape and helmet and a motorcycle adorned by red, white, and blue colors.” In 1973, Ideal Toys released a toy called the “Evel Knievel Stunt Cycle” featuring a doll of Knievel in his signature outfit. K and K Productions Inc. now owns the intellectual property and publicity rights of the late Knievel.

Disney’s Toy Story 4 featured a new character called Duke Caboom, who “rides a Canadian-flag-colored motorcycle and dresses in a white jumpsuit, helmet, and cape with Canadian insignia.” In the film, Duke Caboom is enlisted to help rescue a runaway toy named Forky by jumping over an aisle in an antique store. The character is insecure about his stuntman abilities because a child in the 1970s, who owned the “Duke Caboom Stunt Cycle,” threw him away after he failed to perform as advertised. In the film, Duke Caboom crashes his motorcycle twice. Disney’s promotional materials for the film featured Duke Caboom and Duke Caboom merchandise, including the “Disney Pixar Toy Story Stunt Racer Duke Caboom.” In interviews, the film’s voice-over actors, directors and producers referenced the “Evel Knievel inspiration for Duke Caboom.”  

K and K sued Disney under the Lanham Act for false endorsement/false description, trade dress infringement and trademark dilution, and also brought Nevada common-law claims for trademark infringement/unfair competition and unjust enrichment, and a claim for right of publicity under NRS 597.770. On Disney’s motion, the district court dismissed all of K and K’s claims for failure to state a claim.

First, the court, following Ninth Circuit precedent, held that the Second Circuit’s two-prong Rogers v. Grimaldi test applied to the Lanham Act claims because the allegations revolved around Disney’s purported use of K and K’s Lanham-protected intellectual property in a film, which the court found constitutes an expressive work. The court also found that the advertisement, sale or licensing of consumer goods related to an expressive work are incorporated into the same test, which can be applied at the motion to dismiss stage.

On the first prong, whether defendant’s use of plaintiff’s trademark is artistically relevant to the underlying work, the court noted that the threshold is “very low” and the artistic relevance “merely must be above zero.” The court found that Disney’s allusion to Knievel bears “substantial artistic relevance to the creative work” because Duke Caboom was an integral character in the film and not just a “cameo appearance,” and his story line continued a theme from the original Toy Story film. Thus, the court rejected K and K’s argument that “Duke Caboom’s appearance is simply a gratuitous showing of an Evel Knievel-esque motorcycle stuntman.”

On the second prong, which asks whether the alleged use explicitly misleads consumers about the source or content of the work, the court explained that it looks for an “explicit indication,” “overt claim” or “explicit misstatement” that would confuse consumers into thinking that the “celebrity is somehow behind  [the film] or that [he] sponsors the product.” Based on this standard, the district court held that Toy Story 4 did not explicitly attempt to mislead consumers into believing that Knievel sponsors, endorses or is associated with the film. The use of a mark alone is not enough to satisfy this prong of the Rogers test, and regardless, Knievel and Duke Caboom have different features and costumes.

Second, the district court rejected K and K’s claim that Disney violated its right of publicity in Evel Knievel through both its use of Duke Caboom in the film and  advertisements, and the Duke Caboom action figure. The Nevada Right of Publicity statute provides an express exception for uses that attempt “to portray, imitate, simulate, or impersonate a person in a … film” and associated advertisements and commercial announcements. 

Disney also argued that the Duke Caboom action figure was transformative and protected by the First Amendment. Noting that whether the transformative use argument can be resolved at the pleading stage is an issue of first impression in Nevada, the court, following the lead of the Nevada Supreme Court, looked to informative cases in California for guidance, in addition to Ninth Circuit guidance. Taking into account these authorities, the court stated it believed that the Nevada Supreme Court would likely adopt a transformative use affirmative defense to right of publicity claims and held that Disney’s use of Evel Knievel’s likeness in the Duke Caboom action figure included significant transformative elements and that Disney is entitled to the defense as a matter of law. Among other elements, the action figure has a different name, different clothes, different styles and different facial features. The district court rejected the notion that both figures being stuntmen renders Duke Caboom a representation of Knievel. The court also found that the marketability and economic value of the Duke Caboom action figure come from the success of Toy Story 4 and not from Knievel.  

The court dismissed K and K’s Nevada common-law claim for trademark infringement and unfair competition, holding that those claims rise and fall with its Lanham Act claims. The court also dismissed the claim that Disney has been unjustly enriched through its “unauthorized incorporation of the Evel Knievel [i]ntellectual [p]roperty into the character Duke Caboom” because K and K has conferred a benefit on Disney by “maintaining the strength of the Knievel intellectual property,” finding that K and K had failed to allege unauthorized use of its intellectual property.  

Finally, the court denied K and K’s motion for leave to file a second amended complaint after finding that the changes outlined in the motion would likely not materially change its analysis, but dismissed K and K’s claims without prejudice, essential allowing K and K to revive its claims if it so chooses.

Summary prepared by Linna Chen and Ava Badiee