Sid & Marty Krofft Television Productions, Inc.
v.
McDonald's Corp.

562 F.2d 1157

United States Court of Appeals,
Ninth Circuit

Oct. 11, 1977

CARTER. J.: This is a copyright infringement action. Plaintiffs Sid and Marty Krofft Television Productions, Inc., and Sid and Marty Krofft Productions, Inc. were awarded $50,000.00 in their action against defendants McDonald's Corporation and Needham, Harper & Steers, Inc. Defendants were found to have infringed plaintiffs' "H.R. Pufnstuf' children's television show by the production of their "McDonaldland" television commercials.

. . .

We believe that the district court's finding of infringement was not clearly erroneous, and see no merit to defendants' first amendment claims. We find, however, that the district court was in error in awarding damages. We therefore affirm in part, reverse in part, and remand for further proceedings.

FACTS

In 1968, Sid and Marty Krofft were approached by the NBC television network to create a children's television program for exhibition on Saturday morning. The Kroffts spent the next year creating the H. R. Pufnstuf television show, which was introduced on NBC in September 1969. The series included several fanciful costumed characters, as well as a boy named Jimmy, who lived in a fantasyland called "Living Island," which was inhabited by moving trees and talking books. The television series became extremely popular and generated a line of H. R. Pufnstuf products and endorsements.

In early 1970, Marty Krofft, the President of both Krofft Television and Krofft Productions and producer of the show, was contacted by an executive from Needham, Harper & Steers, Inc., an advertising agency. He was told that Needham was attempting to get the advertising account of McDonald's hamburger restaurant chain and wanted to base a proposed campaign to McDonald's on the H. R. Pufnstuf characters. The executive wanted to know whether the Kroffts would be interested in working with Needham on a project of this type.

Needham and the Kroffts were in contact by telephone six or seven more times. By a letter dated August 31, 1970, Needham stated it was going forward with the idea of a McDonaldland advertising campaign based on the H. R. Pufnstuf series. It acknowledged the need to pay the Kroffts a fee for preparing artistic designs and engineering plans. Shortly thereafter, Marty Krofft telephoned Needham only to be told that the advertising campaign had been canceled.

In fact, Needham had already been awarded McDonald's advertising account and was proceeding with the McDonaldland project. Former employees of the Kroffts were hired to design and construct the costumes and sets for McDonaldland. Needham also hired the same voice expert who supplied all of the voices for the Pufnstuf characters to supply some of the voices for the McDonaldland characters. In January 1971, the first of the McDonaldland commercials was broadcast on network television. They continue to be broadcast.

Prior to the advent of the McDonaldland advertising campaign, plaintiffs had licensed the use of the H. R. Pufnstuf characters and elements to the manufacturers of toys, games, lunch boxes, and comic books. In addition, the H. R. Pufnstuf characters were featured in Kellogg's cereal commercials and used by the Ice Capades. After the McDonaldland campaign, which included the distribution of toys and games, plaintiffs were unable to obtain new licensing arrangements or extend existing ones. In the case of the Ice Capades, the H. R. Pufnstuf characters were actually replaced by the McDonaldland characters.

Plaintiffs filed suit in September 1971. The complaint alleged, inter alia, that the McDonaldland advertising campaign infringed the copyrighted H. R. Pufnstuf television episodes as well as various copyrighted articles of Pufnstuf merchandise. By way of relief, plaintiffs sought compensatory damages of $250,000, an order for an accounting of profits attributable to the infringements, or, in the alternative, statutory "in lieu" damages, as provided by 17 U .S.C. ' 101(b).  . . .  The three week jury trial began on November 27, 1973. The jurors were shown for their consideration on the question of infringement: (1) two H. R. Pufnstuf television episodes; (2) various items of H.R. Pufnstuf merchandise, such as toys, games, and comic books; (3) several 30 and 60 second McDonaldland television commercials; and (4) various items of McDonaldland merchandise distributed by McDonald's, such as toys and puzzles. The jury was instructed that it was not to consider defendants' profits in determining damages, but could consider the value of use by the defendants of plaintiffs' work.

A verdict in favor of plaintiffs was returned and damages of $50,000.00 assessed. After the verdict, the parties briefed the question of whether plaintiffs were entitled to additional monetary recovery in the form of profits or statutory "in lieu " damages. The district court denied plaintiffs' claim for such relief. The court found that these matters were properly for the jury to consider so that it would not exercise its discretion in hearing further evidence. These appeals followed.

. . .

The real task in a copyright infringement action . . . is to determine whether there has been copying of the expression of an idea rather than just the idea itself.  . . .

The difficulty comes in attempting to distill the unprotected idea from the protected expression. No court or commentator in making this search has been able to improve upon Judge Learned Hand's famous "abstractions test" articulated in Nichols v. Universal Pictures Corporation . . .:

Upon any work, and especially upon a play, a great number of patterns of increasing generality will fit equally well, as more and more of the incident is left out. The last may perhaps be no more than the most general statement of what the play is about, and at times might consist of only its title; but there is a point in this series of abstractions where they are no longer protected, since otherwise the playwright could prevent the use of his "ideas," to which, apart from their expression, his property is never extended.  . . .

The test for infringement therefore has been given a new dimension. There must be ownership of the copyright and access to the copyrighted work. But there also must be substantial similarity not only of the general ideas but of the expressions of those ideas as well. Thus two steps in the analytic process are implied by the requirement of substantial similarity.

The determination of whether there is substantial similarity in ideas may often be a simple one. Returning to the example of the nude statue, the idea there embodied is a simple one--a plaster recreation of a nude human figure. A statue of a horse or a painting of a nude would not embody this idea and therefore could not infringe. The test for similarity of ideas is still a factual one, to be decided by the trier of fact.  . . .

We shall call this the "extrinsic test." It is extrinsic because it depends not on the responses of the trier of fact, but on specific criteria which can be listed and analyzed. Such criteria include the type of artwork involved, the materials used, the subject matter, and the setting for the subject. Since it is an extrinsic test, analytic dissection and expert testimony are appropriate. Moreover, this question may often be decided as a matter of law.

The determination of when there is substantial similarity between the forms of expression is necessarily more subtle and complex.  . . .  If there is substantial similarity in ideas, then the trier of fact must decide whether there is substantial similarity in the expressions of the ideas so as to constitute infringement.

The test to be applied in determining whether there is substantial similarity in expressions shall be labeled an intrinsic one-depending on the response of the ordinary reasonable person.  . . .  It is intrinsic because it does not depend on the type of external criteria and analysis which marks the extrinsic test.  . . .   Because this is an intrinsic test, analytic dissection and expert testimony are not appropriate.

This same type of bifurcated test was announced in Arnstein v. Porter, 154 F.2d 464, 468-69 (2d Cir.1946), cert. denied, 330 U.S. 851 (1947). The court there identified two separate elements essential to a plaintifrs suit for infringement: copying and unlawful appropriation. Under the Arnstein doctrine, the distinction is significant because of the different tests involved.  . . .

We believe that the court in Arnstein was alluding to the idea-expression dichotomy which we make explicit today. When the court in Arnstein refers to "copying" which is not itself an infringement, it must be suggesting copying merely of the work's idea, which is not protected by the copyright. To constitute an infringement, the copying must reach the point of "unlawful appropriation," or the copying of the protected expression itself. We analyze this distinction in terms both of the elements involved-idea and expression-and of the tests to be used-extrinsic and intrinsic-in an effort to clarify the issues involved.

In the context of this case, the distinction between these tests is important. Defendants do not dispute the fact that they copied the idea of plaintiffs' Pufnstuf television series-basically a fantasyland filled with diverse and fanciful characters in action. They argue, however, that the expressions of this idea are too dissimilar for there to be an infringement. They come to this conclusion by dissecting the constituent parts of the Pufnstuf series--characters, setting, and plot--and pointing out the dissimilarities between these parts and those of the McDonaldland commercials.

This approach ignores the idea-expression dichotomy alluded to in Arnstein and analyzed today. Defendants attempt to apply an extrinsic test by the listing of dissimilarities in determining whether the expression they used was substantially similar to the expression used by plaintiffs. That extrinsic test is inappropriate; an intrinsic test must here be used.  . . .  Analytic dissection, as defendants have done, is therefore improper.

Defendants contest the continued viability of Arnstein. It is true that Arnstein 's alternative holding that summary judgment may not be granted when there is the slightest doubt as to the facts has been disapproved. . . . But the case's tests for infringement have consistently been approved by this court.  . . .  They have also been accepted by other courts.  . . .⁷ We believe Arnstein is still good law.

Since the intrinsic test for expression is uniquely suited for determination by the trier of fact, this court must be reluctant to reverse it.  . . .  As a finding of fact, a conclusion as to the question of copying is subject to the "clearly erroneous" standard. Fed. R. Civ. P. 52(a). But it follows that this court will be less likely to find clear error when the subjective test for copying of expression has been applied.

The present case demands an even more intrinsic determination because both plaintiffs' and defendants' works are directed to an audience of children. This raises the particular factual issue of the impact of the respective works upon the minds and imaginations of young people. As the court said in Ideal Toy Corp. v. Fab-Lu Ltd., 261 F. Supp. 238, 241-42 (S.D.N.Y.1966), affd., 360 F.2d 1021 (2d Cir.1966):

In applying the test of the average lay observer, [children] are not to be excluded-indeed they are the "far-flung faithful . . . audience." The television advertising campaign of plaintiff was directed toward acquainting these youngsters with . . . its new teenage and pre-teen dolls. The impression of the faces and general appearance of the dolls was upon them.  . . .  [T]he dolls create the same impression, both with respect to their appearances and the play-uses for which they are suited. It is the youngsters who, on the basis of this impression, go to the stores with their parents or at home make their wishes known for the dolls they desire after television has made its impact upon them. In their enthusiasm to acquire . . . [the dolls] they certainly are not bent upon "detecting disparities" or even readily observing upon inspection such fine details as the point at which the necks are molded (citations and footnotes omitted).

The H.R. Pufnstuf series became the most popular children's show on Saturday morning television. This success led several manufacturers of children's goods to use the Pufnstuf characters. It is not surprising, then, that McDonald's hoped to duplicate this peculiar appeal to children in its commercials. It was in recognition of the subjective and unpredictable nature of children's responses that defendants opted to recreate the H.R. Pufnstuf format rather than use an original and unproven approach.

Defendants would have this court ignore that intrinsic quality which they recognized to embark on an extrinsic analysis of the two works. For example, in discussing the principal characters--Pufnstuf and Mayor McCheese--defendants point out:

"Pufnstuf" wears what can only be described as a yellow and green dragon suit with a blue cummerbund from which hangs a medal which says "mayor". "McCheese" wears a version of pink formal dress--"tails"--with knicker trousers. He has a typical diplomat's sash on which is written "mayor", the "M" consisting of the McDonald's trademark of an "M" made of golden arches.

So not only do defendants remove the characters from the setting, but dissect further to analyze the clothing, colors, features, and mannerisms of each character. We do not believe that the ordinary reasonable person, let alone a child, viewing these works will even notice that Pufnstuf is wearing a cummerbund while Mayor McCheese is wearing a diplomat's sash.

. . .

We have viewed representative samples of both the H. R. Pufnstuf show and McDonaldland commercials. It is clear to us that defendants' works are substantially similar to plaintiffs'.⁹ They have captured the "total concept and feel" of the Pufnstuf show. Roth Greeting Cards v. United Card Co., 429 F.2d 1106, 1110 (9th Cir.1970). We would so conclude even if we were sitting as the triers of fact. There is no doubt that the findings of the jury in this case are not clearly erroneous.

. . .

⁷ The two-step approach of Arnstein does have its detractors.  . . .  But the approach certainly tends to decrease the importance of the trier of fact in the first step and increase this importance in the second step.  . . .  We do not resurrect the Arnstein approach today. Rather, we formulate an extrinsic-intrinsic test for infringement based on the idea-expression dichotomy. We believe that the Arnstein court was doing nearly the same thing. But the fact that it may not have been does not subtract from our analysis.

⁹ Even a dissection of the two works reveals their similarities. The "Living Island" locale of Pufnstuf and "McDonaldland" are both imaginary worlds inhabited by anthromorphic plants and animals and other fanciful creatures. The dominant topographical features of the locales are the same: trees, caves, a pond, a road, and a castle. Both works feature a forest with talking trees that have human faces and characteristics.

The characters are also similar. Both lands are governed by mayors who have disproportionately large round heads dominated by long wide mouths. They are assisted by "Keystone cop" characters. Both lands feature strikingly similar crazy scientists and a multi-armed evil creature.

It seems clear that such similarities go beyond merely that of the idea into the area of expression. The use of the basic idea of the works does not inevitably result in such similarities. Certainly a jury applying an intrinsic test could find such similarities of expression substantial.