The Phascinating Case of the Phillie Phanatic Design Rights

Wow, this is a great one… will the artists who designed the Phillie Phanatic reacquire their rights to his likeness and sell him to some other city that is the highest bidder? Those evil artists, they’re all the same. Now if only they were kind-hearted souls with nothing more in mind than the best the interest of the community, like, say, the attorneys arguing the case… then the world would be a better place.

But I’m getting ahead of myself. If you haven’t followed the story, the artists who created the design of the beloved green mascot of the Philadelphia, PA USA sports team are seeking, under a previously obscure law, to claim back their copyright on the Phanatic. I won’t spell out the history here, just give you a one news story that will server that purpose:

https://philadelphia.cbslocal.com/2019/08/03/phillies-harrison-erickson-inc-phanatic-lawsuit/

In this writeup you will learn mostly about this fascinating portion of the US copyright law that allows poor, starving artists to have at least a morsel of hope in the battle against big business, and trust me, it is fascinating! But first some notes from our lawyers:

1. I am not a lawyer.
2. I’ve read a lot about intellectual property law, having gotten my name on an actual Register of Copyrights Form TX way back in ’84 for a book I wrote. Nowadays, that’s a formality you don’t even need to do, to have copyright protection under the law.
3. We don’t have all the facts on the Phanatic case… but because of one odd provision in the law, there’s a 90% chance we have enough. The provision basically overrides all possible contracts! I said, ‘wow,’ didn’t I? More on that soon.

What We Know of the Circumstances

There are a few things that haven’t been explicitly stated in the news stories, but here’s what we know and don’t know.

1. The only certainty is that the lawyers will get all of the money, or at least considerable portions of it will move from one party’s pockets to the lawyers. There’s generally two parties to such a matter, by my country lawyer understanding: a plaintiff and defendant. Can you guess which party the money will be coming FROM? It was a trick question. The money will come from the pockets of Philadelphia sports fans. Instead of bottles of water costing a mere $5.00 each, they will cost $6.00 each after the dust settles. I invoke the wisdom of that great seer, Lily Tomlin: “No matter how cynical you are, it’s hard to keep up.” If you’d like to refute the logic of this Item #1, I await your thesis.
2. By inferring what we can from the various news articles, the Phillies, back in 1987 missed their opportunity to guarantee that this fight would not occur. They failed to do this by failing to purchase the design of the Phanatic as ‘work for hire.’ Work for hire’ means that when a creative person creates something for an employer or contracting company, the employer makes it clear before the work even starts that they are the unquestionable owner of the copyright, not merely someone to whom the copyright is transferred. Perhaps the artists, being independent, simply would not consent to work for hire; then the Phillies should have gone elsewhere. If, instead, the Phillies’ legal counsel failed to anticipate that the ‘mascot’ portion of the design wasn’t like a book being copied but a potential icon of the team, then they blew it. It would be interesting to know if their counsel at that time was genuinely an “intellectual property” person. If they were, I think they should have foreseen this… that’s what the expertise if for. A new twist in the law seems to have arisen in 2013, and they might not have been expected to foresee that, but I still would not have accepted a copyrighted work as my organization’s mascot.
3. We seem to know that the two artists were paid $250,000 in 1987 for the work. We are told they continued to do work related to the mascot and its related designs for many years, up to perhaps 2018. No mention is made in the press of compensation for hourly work or compensation on a royalty basis for merchandise/licensing sales.

Law

1. There are three areas of intellectual property law: copyright, trademark, and patent. The Phanatic matter has nothing to do with patent; you can imagine that. It is entirely about copyright, which concerns “work”… the substance of creative endeavor, which typically can be copied to produce income. Trademark is just about imagery or words that represent a brand. Interesting, eh? That Phanatic sure seems to represent the brand, doesn’t it? That’s one of a few ingredients that in combination make this matter is a ‘wow’ case.
2. But the legal phight is only about copyright… because of Section 203b of the US copyright law. Amazingly, this section entitles authors to reclaim rights to a copyright after 35 years (or 75, depending on whether it was published after 1987… that part is a bit hard to decode). The Phanatic was born in April of ‘87… but the whole date matter seems settled that it’s a post-87 issue, and we are right up on the 35-year deadline.
3. The Author’s Right Is Absolute The law says that the creator has to notify the grantee (the Phillies) between 10 and 2 years of the 35-year period ending. They simply write a letter (and have a copy put in the Library of Congress) and their reclaiming of ownership is ‘effected’!!! I put quotes around that word because it’s the language in the law. What I’m explaining to you is: 1) there is no fight; the Phillies (or, in the case of a book, the ‘big publishing house) have no recourse; there is no other document or signature process or affidavit or hearing or whatever… the author owns his book again. Period. Wow #2.
4. WTF? Why did they make this law? To give poor starving authors a last chance to write — I mean right — the wrong of the rich publishing house creating indentured servants for life, out of writers. From the blog “Dear Author”: The Supreme Court noted that “authors are congenitally irresponsible, [and] that frequently they are so sorely pressed for funds that they are willing to sell their work for a mere pittance.” Fisher Music Co. v. Witmark, 318 U.S. 643, 656 (1943). Now keep in mind, the rich publishing house took a risk on the poor starving artist, and in exchange got 35 years of profits; not 5 years, not 10, not 20, but 35. The congress, in its wisdom saw fit to offer one small ray of hope that an author could profit on the rare work that had a long life. And here’s the actual wording from the .GOV site explaining the intent: “These provisions are intended to protect authors and their heirs against unremunerative agreements by giving them an opportunity to share in the later economic success of their works by allowing authors or their heirs, during particular periods of time long after the original grant, to regain the previously granted copyright or copyright rights.” Before moving along, notice that word that I’ve bolded, ‘unremunerative.’ Interesting. I presume that sentence is not part of “the law” but just some supportive text. (Recall that those artists seem to have been paid $250,000 in 1987.)
5. “To Hell with Your Contract” Those exact words are written into the law. Well, not those ‘exact’ words, but close enough (bolding is mine): https://www.copyright.gov/title17/92chap3.html#304 (5) Termination of the grant may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant. Do you ever mix up “pièce de résistance” and “coup de grâce”? Well, you won’t have that trouble here, because this clause is both! This law says, we don’t care if the poor starving artist signed away his family, his house, and the Brooklyn Bridge… that contract is over after you’re made 35 years of profit, from the time he gave you two years’ notice. Have a nice day. (To repeat, only a work-for-hire situation from the outset, precludes the rich publisher from the author’s right of termination.)
6. Derivative works: now you need a lawyer, just to read the docs. Basically it looks like the transfer back to the original author does not include derivative works. I suppose the intention was to try to keep things simple… the author only gets back what they entirely created. With the Phanatic, this is really messy: most of the monetary value is in the merchandise that has varying levels of derived interpretation.

Interpretation

So, to boil it down, we have…

1. The intent of the law is to give people like book authors a chance, after 35 years of someone else profiting, a chance to renegotiate if the original deal was a loser for them.
2. The law is about copyright, such as books and written content, but applies to anything copyrighted.
3. Unless it was work for hire, or the copyright was granted by someone’s last-will-and-testament, the author can reclaim the ownership.
4. If an author wants to reclaim rights, nothing agreed to in any contract matters after 35 years. For the Phanatic, that seems to be June of 2020.
5. If the author does the proper notice, the ownership transfers, period. It is not a negotiation. But of course lots of negotiating could ensue.
6. The Phanatic apparently is a copyrighted likeness or design. It is both a mascot and the source of considerable merchandise income.
7. As a team mascot, that aspect really pushes the intent of copyright law, since there are not copies of the mascot; it is symbolic, like a trademark. The notion of making multiple copies and selling them to multiple organizations is self-contradictory. In fact copyright law is emphatic in explaining the physical instances, such as of books, are not what is protected by copyright law; it is the ‘art.’
8. As a source of merchandise income, it is EXACTLY what the copyright law is about… including its incredible right to reclaim. Then we get into the challenging question of whether every single piece of merchandise is in fact ‘derivative.’ For instance, a Phanatic doll bandana is derivative but is exactly the Phanatic design. The Phanatic bandana is derivative but not as literal.
9. The Phillies’ lame attempt at modifying the Phanatic slightly, upon his Spring 2020 reappearance, is mere idiocy. If it were allowed to excuse the grantee (the Phillies) from the transfer law, it would make a mockery of copyright law. Consider if we were arguing about a book, and the publisher changed a few words and one word in the title and added a chapter. Would anyone accept that nonsense?

Bottom Line?

Like it or not, the law says that the creators own the design of the Phanatic in June. But they probably don’t want the ‘mascot’ part that the law clearly covers; they want the merchandising income, for which I have insufficient facts to render a strongly informed opinion. I would personally think and guess that to the extent that the merchandise shows the image of the Phanatic or parts of it, they are not ‘derivative’ but ‘the’ design. And if I were a judge I would use my Solomonic wisdom — I have one-quarter Solomon in my family tree — and declare that…

1. Whereas the plaintiffs were paid $250,000 for the design and therefore were not subject to an “unremunerative agreement,” …
2. And whereas the use of a copyrighted design as a mascot is not subject to the traditional sense of copying (other than by one organization for multiple venues) …
3. I find that the Phillies shall own the use of the Phanatic design for their mascot and its representation in all branding, communication, and advertising of the team, and the copyright of that design for those uses will not be transferred back to the authors…
4. And whereas the copyright law is clear on the right of copyright holders to reclaim their work after the specified number of years…
5. And whereas the copyable instances of products based on the Phanatic design are exactly what the transfer law is intended to refer to…
6. The design of the Phanatic for all other uses such as, but not limited to merchandise, shall be transferred back to the authors. All products clearly based on the Phanatic, however variant the nature of the product, or how many elements of the Phanatic design are utilized, shall be regarded as subject to the transfer of ownership.

The part that the judge wouldn’t have reason to state is exactly how business would be conducted from that point forward, as regards merchandise. The owners could conceivable renegotiation a lump-sum sale of the rights, or a royalty fee, or become the provider (publisher), selling to whomever wants to buy Phanatic merchandise… whether wholesaling to the Phillies or whomever. Note that the law does deal with the ensuing future: it stipulates that the original creators can only use the “transfer” card once! No re-do’s 35 years later.

References

MIT Library: Reclaiming your copyright after 35 years: a new opportunity

US Copyright Law: Chapter 2: Copyright Ownership and Transfer (see Section 203b)

Google: redrawing copyright 35 years

Blog: Dear Author: Reclaiming Your Copyright After Thirty-Five Years

Copyright.Gov> Notices of Termination