USDC, S.D. California, December 7, 2017 

District court declines to dismiss copyright infringement claim related to defendants’ work Oh, the Places You’ll Boldly Go, finding Dr. Seuss Enterprises adequately pled potential market harm, which when balanced against other fair use factors precludes finding of fair use for defendants as matter of law, and declines to dismiss trademark infringement and unfair competition claims, finding defendants failed to satisfy at least one nominative fair use factor.

Dr. Seuss Enterprises L.P., the assignee and owner of various copyright registrations for and trademarks in the works of Theodor S. Geisel, also known as “Dr. Seuss,” sued ComicMix LLC, Glenn Hauman, David Jerrold Friedman, JDavid Gerrold and Ty Templeton, claiming that defendants’ work Oh, the Places You’ll Boldly Go! infringes on Oh, the Places You’ll Go! and other Dr. Seuss books.

Defendants initiated a Kickstarter campaign to fund the distribution and printing of Boldly, which combines elements of Oh, the Places You’ll Go! and various Dr. Seuss works with “certain characters, imagery, and other elements from the “Star Trek” science fiction entertainment franchise created by Gene Roddenberry.” Plaintiff argues that Boldly misappropriates key elements of Oh, the Places You’ll Go! and four other Dr. Seuss books. Defendants, on the other hand, maintain that Boldly is protected under the fair use doctrine as a work of parody, and have included statements to that effect on Boldly’s Kickstarter and copyright page.

Upon learning about the Kickstarter campaign, plaintiff sent defendants two letters outlining its rights in the Dr. Seuss works. Plaintiff also sent Kickstarter a takedown notice, which resulted in Kickstarter disabling access to defendants’ campaign that same day. In response, defendants threatened suit and informed plaintiff that they intended to send a counter-notice to Kickstarter to reinstate the campaign. As a result, plaintiff filed suit alleging copyright and trademark infringement and a violation of unfair competition laws. Defendants moved to dismiss the case, which the court granted on the unfair competition and trademark infringement causes of action, and denied on the copyright infringement cause of action. (Read our summary of the district court’s decision here.) Subsequently, plaintiff moved to amend its complaint in connection with the unfair competition and trademark infringement causes of action, and defendants filed another motion to dismiss.

Defendants argued that plaintiff’s copyright infringement claim should be dismissed because Boldly is protected by the fair use doctrine. In considering this argument, the court analyzed the four fair use factors: (1) the purpose and character of the use, including whether the use was commercial in nature and whether the use was transformative; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion of the work used; and (4) the effect of the use on the potential market for the work. Because plaintiff only pled new facts as to factor four of the analysis, the court adopted its previous holding as to the first three factors: factor one weighs in favor of defendants, factor two “weighs slightly in Plaintiff’s favor,” and factor three “does not weigh against Defendants.”

The court focused its analysis on the fourth factor: the effect of the use upon the potential market for or value of the copyrighted work. The court had previously determined that this factor weighed in favor of plaintiff because it presumed a potential harm to plaintiff’s licensing opportunities, but found that this harm was neutralized because Boldly “does not substitute for the original and serves a different market function than Oh, the Places You’ll Go!” In the amended complaint, plaintiff added allegations that it published books derivative of Oh, the Places You’ll Go! and a series of books by authors and artists that incorporate the Dr. Seuss materials. Plaintiff further argued it has created crossover works, and that Boldly “is the kind of derivative work that DSE has the right to develop and could develop or license others to develop.” Defendants argued that Boldly cannot cause any relevant market harm because plaintiff’s licensed works are not of Boldly’s type; namely, they do not combine elements from Dr. Seuss books with characters and imagery from a third-party enterprise.

The first issue for the court was whether it could presume market harm in this case — which the court concluded it could not, because Boldly was transformative. Analyzing plaintiff’s allegations, the court found that Dr. Seuss Enterprises’ licensing program allowed others to publish books based on characters and elements from the Dr. Seuss books. Even if those books were not mash-ups like Boldly, the court found that there was a potential market for mash-ups based on plaintiff’s past licensing programs and that this market “would not be unlikely.” Factor four therefore weighed in favor of plaintiff, as defendants’ production of Boldly posed a potential harm to the market for plaintiff’s derivative works.

Noting that the new allegations in the complaint tilted the balance more in plaintiff’s favor, the court weighed the four fair use factors and concluded that defendants’ fair use defense failed as a matter of law.

The court also declined to dismiss plaintiff’s renewed claims for trademark infringement and unfair competition. In the amended complaint, plaintiff alleged trademark rights in (1) the title Oh, the Places You’ll Go!; (2) the stylized font used in Dr. Seuss’ books, and (3) the unique illustration style of the characters and backgrounds of Dr. Seuss’ books. Plaintiff also alleged trademark registrations for Oh the Places You’ll Go! and the 25th anniversary version, and a trademark related to downloadable digital children’s books, among other things (the OTPYG E-Book Mark). Moreover, plaintiff alleged that it owned trademarks from the title of “Oh, the Places You’ll Go!” (OTPYG Title Marks). Defendants argued that plaintiff failed to allege the existence of a protectable trademark and that their use of the alleged trademarks was shielded by the nominative fair use doctrine.

As to whether the title Oh, the Places You’ll Go! is a protectable mark, the court found that because book titles are descriptive, a secondary meaning is necessary to protect the title under trademark law. A secondary meaning is found where courts determine that a “title is sufficiently well known that consumers associate it with a particular author’s work.” Despite plaintiff’s failure to set forth a substantial explanation for why Oh the Places You’ll Go! has acquired a secondary meaning, the court denied the motion to dismiss as to this claim because at the motion to dismiss stage, plaintiff’s allegation that Oh the Places You’ll Go! is distinct and has acquired a secondary meaning in the minds of the public had to be taken as true.

As to whether plaintiff’s font is a trademark, plaintiff alleged that defendants’ use of the stylized font used consistently in Dr. Seuss books constituted trademark infringement. The court addressed defendants’ argument that the font used in Dr. Seuss books varies too broadly to entitle plaintiff to trademark protection in the nominative fair use analysis. As to whether plaintiff’s illustration style is a trademark, the court held that the illustration style in Oh the Places You’ll Go! is not protectable as general style is not a protectable trademark.

The court then considered whether defendants use of the title Oh the Places You’ll Go! — including the words and the appearance of the title on the cover of the book — was protected under the doctrine of nominative fair use. Under that doctrine, a defendant must show that it used plaintiff’s mark only when describing plaintiff’s trademarked goods and services, which then shifts the burden to plaintiff to show a likelihood of confusion. In determining whether the nominative fair use analysis is satisfied, the court asks: “First, the product or services 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 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.”

As a preliminary matter, the court rejected plaintiff’s arguments that the nominative fair use doctrine did not apply. Plaintiff first argued that the doctrine did not apply because defendants did not use plaintiff’s mark identically. The court held that it is illogical to require the second use of plaintiff’s mark to be identical as it would defeat the purpose of the test, including the consideration of the second factor, which considers whether defendant used more of the mark than was reasonably necessary. Second, plaintiff argued that the doctrine did not apply because defendants’ use of plaintiff’s marks are confusingly similar. In making its determination, the court found that the nominative fair use analysis is “appropriate where a defendant has used the plaintiffs mark to describe the plaintiffs product, even if the defendant’s ultimate goal is to describe his own product.” The court held that while defendants used the Oh the Places You’ll Go! mark to describe plaintiff’s product, the defendants’ ultimate goal was to describe their own book, and thus a nominative fair use defense was appropriate.

The court next determined whether defendants’ use of the mark satisfied the elements of the nominative fair use doctrine. As to whether the product was readily identifiable without the use of the trademark, the court held that defendants satisfied this factor because there is no descriptive substitute for the title of the book, and it was necessary for Boldly to use Oh the Places You’ll Go! title because Boldly is a mash-up of Oh the Places You’ll Go! and “Star Trek.” As to whether defendants used no more than reasonably necessary to identify the plaintiff’s product, the court held that this factor was not satisfied as it was unnecessary for defendants to use the exact font used on the Oh the Places You’ll Go! cover in addition to using the title of the book to communicate their message. Finally, the court held that defendants have done nothing to falsely suggest that plaintiff sponsored or endorsed their use of the mark. Nevertheless, the court denied the motion to dismiss as to the trademark infringement claim because defendants did not satisfy every factor of the nominative fair use defense. The court denied the motion to dismiss as to plaintiff’s unfair competition claims for the same reason.