The Supreme Court has granted certiorari to a number of copyright cases in the past few years, most notably in Kirtsaeng v. John Wiley & Sons, Inc. and American Broadcasting Companies, Inc. v. Aereo, Inc. for disputes over first sale and public broadcasting, respectively. There is another case is brewing over the horizon in which Sherlock Holmes finds himself in the center of attention.

Prior to the 1998 Copyright Term Extension Act, works in the United States would retain copyright for 50 years after the death of the author. This had been the standard under the Berne Convention until the EU extended the duration to 70 years in 1993. The Copyright Term Extension Act was borne out of a desire to harmonize the United States copyright law with the extended duration granted in the EU. Due to its high profile supporters such as the Walt Disney Company and Mary Bono, the widow of Sonny Bono, the bill and the eventual law was also colloquially called the "Sonny Bono Copyright Term Extension Act" or even the "Mickey Mouse Protection Act". The bill was passed signed into law by former President Bill Clinton on October 27, 1998. Under the Act, in addition to extending the duration to 70 years after the author's death, most works that were published in and after 1923 which still remained under copyright as of 1998 would have its copyright duration extended to 95 years after the publication date, so the earliest date those works will enter the public domain is 2019.

Sir Arthur Conan Doyle, the author of the Sherlock Holmes stories, died in 1930. Out of the 56 stories and four novels published by Doyle, the last ten stories, which were published between 1923 and 1927, remain under copyright in the United States as of 2014 as a result of the aforementioned Copyright Term Extension Act. One of the reasons the Great Detective has persisted in popular culture for nearly a century after Arthur Conan Doyle's death in 1930 was stories and adaptations that would be characterized as fan fiction today, written by many authors, and the resurgence in popularity of Sherlock Holmes in recent years may be attributed in no small part to the two films starring Robert Downey, Jr., and BBC's ongoing annual TV production Sherlock. It is perhaps of no surprise that Leslie Klinger of Los Angeles, an attorney and an ardent fan of Sherlock Holmes, planned to write a sequel to his 2011 Sherlock Holmes anthology as inspired by the original Sherlock canon, which refers to the original Doyle stories that have since entered into the public domain. While Klinger believed that he did not need to obtain a license from the Doyle estate in writing the first work because it is based on public domain material, his publisher, Random House, nevertheless agreed to the Doyle estate's demand of US$5,000 in royalties; when the Doyle estate heard about Klinger's plan to publish the sequel, it again sought royalties and also threatened Random House that it will make sure no distributor will sell Klinger's book if it did not pay for a license. In response, Klinger sought a declaratory judgment that he is free to use in his sequel whatever story elements that have entered the public domain, but not those still under copyright in the last ten Doyle stories. The United States District Court for the Northern District of Illinois granted summary judgment for Klinger, and the Doyle estate appealed.

Merit-wise, the Doyle estate argues that because those last ten stories added different facets to the fictional lives of Sherlock Holmes and Dr. Watson, Sherlock Holmes and Dr. Watson are not complete "round" characters until Doyle wrote those ten stories, thus until those ten stories also pass into public domain starting from 2019, no writer may use Sherlock Holmes and Dr. Watson in his or her work without first obtaining a license from the estate.

Judge Richard Posner disagrees. In writing the Seventh Circuit's opinion replete with examples from classical literal to popular culture, he states that it had been expressly recognized that copyright is only afforded to the author's original work, and all derivative works, which includes sequels by the same author, are only protectable for the originality it adds to the base work. In other words, the last ten stories of Sherlock Holmes authored by Doyle are derivative works of his earlier Holmes stories, and in US copyright law, the incremental originality added to Sherlock Holmes the character in the last those stories are only protectable in their own right and not extended to the original work. Posner therefore rejects the juxtaposition of a "flat" character and a "round" character argued by the Doyle estate in the context of copyright law – a fictional character in a work only requires a specific name and appearance to be eligible for copyright protection. In the first incarnation of Sherlock Holmes and Dr. Watson in A Study in Scarlet, Doyle framed the first part of the novel as a first-person narrative from Dr. Watson's perspective, giving the reader a detailed background of his immediate past and his return to England, followed by his first meeting with Holmes. The reader then learns about Holmes as a person through Dr. Watson's observation over an unspecified period of time before the plot of the novel begins in earnest. There is therefore no question that Holmes and Watson were fully copyrightable characters in this first story. However, copyright only distinguishes between "original" and "derivative"; anything added or altered by Doyle to the character traits of Holmes and Watson first described in A Study in Scarlet that meets the minimum copyrightable threshold is derivative in nature, and as stated above, the copyright protection for derivative works is highly standalone in its nature. Posner therefore finds it puzzling that the Doyle estate believes there is "no workable standard" to protect the additional character traits in the last ten Holmes stories still under copyright, because if those character traits may be copyrighted, they are already protectable as derivative works of the original, not to mention that Klinger does not dispute the copyright on those last ten stories; as a corollary, the only way those new character traits are not copyrightable would be if they are not sufficiently original for copyright in the first place, then the Doyle estate's distinction between "flat" and "rounded" characters would be completely obliterated.

Posner then goes on to guess at the Doyle estate's actual motive in opposing Klinger's desire for a declaratory judgment. The Doyle estate argues that creativity would be diminished if the author cannot retain the copyright on his or her early works and will now have to contend with "copiers". Posner quickly disposes that argument as absurd, as Doyle died 84 years ago and could not possibly contend with "copiers" even if he wanted to. Even if the Doyle estate was concerned about losing control of Sherlock Holmes as a character if fan writers may publish Sherlock Holmes stories without seeking a license, that is the realm of trademark law rather than copyright law; in any case, there can be no copyright infringement when the work or the copyrightable elements within are no longer under copyright protection. Given the above, Posner speculates that the Doyle estate's true concern is the drying up of licensing fee revenue from Sherlock Holmes fan fiction writers if Doyle's works are no longer under copyright.

A unique characteristic in this case is the fact that only some of a single author's works have fallen into public domain, while some still remains under copyright. This is not a common occurrence for works written by a single author; supposing (perhaps unrealistically) that the copyright duration in the United States remains unchanged in the 21st century, all works by a single author living from 2000 to 2080, whether such works are written in 2030 or 2079, would fall into the public domain in 2151. The last ten Sherlock Holmes stories remain under copyright today solely because the Copyright Term Extension Act increased the copyright duration for works published after 1923 that remain in copyright by 1998 to 95 years. Furthermore, even if the Seventh Circuit agreed with the Doyle estate, the Doyle estate's own arguments would not prevent every one of the last ten Sherlock Holmes stories from entering into the public domain in 9 years' time (starting in 2023, after a full 95 years from the last Sherlock Holmes story published in 1927). What was the Doyle estate attempting to accomplish?

From its petition to the Supreme Court for a stay of the declaratory judgment in the District Court (and affirmed by the Seventh Circuit), the Doyle estate appears to be focusing on establishing in precedent how copyright duration should be applied to "dynamic" characters that evolve over time. The petition rejects Judge Posner's characterization that a dynamic character consists of the original character plus character traits from derivative works (sequels) and restates its previous argument that a dynamic character is more akin to an unfinished mural; if others could copy the unfinished versions, the value of the artist's copyright on the mural is diminished. This seems to misconstrue the nature of a character in a story. No author starts out intending a character to be "incomplete"; the character may be elaborated or further fleshed out in the author's subsequent works, but if the character at the very least already carries sufficient originality to deserve copyright protection, regardless of how crude or paltry those characteristics may be, it is a discrete "snapshot" of the character at the time of that work, and as such, the character may be freely appropriated in that specific form once the work it appeared in is no longer under copyright. Second, others could only copy the unfinished versions if the unfinished version is not (or no longer) protected by copyright, or there exists an exception in the copyright law that allows for others to freely make copies (i.e. fair use); the claim that the value of copyright is diminished because other people are allowed under law to make copies of its unprotectable sections implies, by extension, that such exceptions or rights should not exist because they lessen the value of the copyrighted work. In any case, Justice Kagan has already refused to block the declaratory judgment without further elaboration in July, and it is up to the Doyle estate to submit a full petition for certiorari.

Many commentators have quipped that Mickey Mouse caused the dramatic increase in copyright duration in the 20th century, which is in reference to the Walt Disney Company's zealous efforts at protecting the iconic character. If the Doyle estate fails to receive an opportunity to establish the case law it desired at the Supreme Court, the wave of works entering the public domain starting from 2019 (and Mickey Mouse itself in 2023) may give rise to another lobbying effort to maintain copyright protection of some kind to the estates of the authors. At some point, one wonders, constitutional, economic and other practical considerations may outweigh efforts to further extend the duration of copyright; Judge Posner has already characterized the Doyle estate's effort to keep Sherlock Holmes out of the public domain for 135 years since A Study in Scarlet as "nearly perpetual" and the Doyle estate's goal as "quixotic". Further developments in this case and beyond will therefore be of great interest not only to intellectual property lawyers, but also to the public at large.