Warner Bros. scored a $2.6-million legal victory Tuesday when a federal appeals court in Missouri upheld a ruling in a copyright case involving images from the classic movies "The Wizard of Oz" and "Gone with the Wind," as well as several "Tom and Jerry" shorts.
The decade-old case could set an important precedent in the entertainment industry because it addresses the boundaries of public domain material, and gives studios a legal upper hand in protecting their intellectual property.
At the center of the dispute is Leo Valencia, the head of several nostalgia and vintage companies that obtained images of the films from publicity materials, including posters and lobby cards. He licensed those images for a range of consumer products, such as shirts and lunchboxes, according to the complaint.
Warner filed a suit against Valencia and his companies in 2006, claiming copyright and trademark infringement. But the defense has argued that the images in question fall within the public domain because they were publicity material.
In 2009, a court ruled in the studio's favor and issued an injunction, but the decision was appealed. Two years later, the Court of Appeals for the 8th Circuit in St. Louis ruled that copyright infringement occurred in two circumstances — when the publicity images were used in three-dimensional objects, such as a statuette or action figure, or were combined with other images or text to create a composite image.
But the court said that reproducing publicity material as an identical two-dimensional image didn't constitute copyright infringement.
The defense filed another appeal, but this week, a court upheld the ruling as well as damages amounting to $10,000 for 257 copyright infractions, resulting in an award of nearly $2.6 million.
The judgment "sends a strong message about the risk of engaging in copyright and trademark infringement," said Frederick J. Sperling, a partner at the law firm Schiff Hardin LLP, who represented Warner Bros.
Valencia, the defendant, didn't respond to a request for comment sent through a lawyer.
The case was filed in Missouri because some of the licensees selling the products in question were based in the state.
In upholding the damages amount, the appeals court cited a 2012
Damages for copyright infringement range between $750 and $30,000 per instance, according to U.S. law.
In its 2011 decision, the 8th Circuit court ruled that characters such as Dorothy and the Scarecrow, as well as Scarlett O'Hara and Rhett Butler, are "sufficiently distinctive to merit character protection under the respective film copyrights."
Court documents show that the defendants licensed the film images for use on shirts, lunchboxes, music box lids and playing cards. They were also used as models for three-dimensional objects such as statuettes, busts, figurines inside water globes and action figures.