K and K Promotions, Inc. v. Walt Disney Studios ( 2022 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS AUG 22 2022
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
K AND K PROMOTIONS, INC., No. 21-16740
Plaintiff-Appellant, D.C. No.
2:20-cv-01753-JCM-NJK
v.
WALT DISNEY STUDIOS MOTION MEMORANDUM*
PICTURES; et al.,
Defendants-Appellees.
Appeal from the United States District Court
for the District of Nevada
James C. Mahan, District Judge, Presiding
Argued and Submitted August 10, 2022
San Francisco, California
Before: RAWLINSON, BADE, and BRESS, Circuit Judges.
K&K Promotions, Inc. (“K&K”) appeals the district court’s dismissal of its
trademark action under the Lanham Act and Nevada state law. K&K alleges that
Disney infringed K&K’s intellectual property and publicity rights associated with
Evel Knievel by creating the character Duke Caboom for the movie Toy Story 4 and
using the character to sell toy merchandise. We review the district court’s order
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
granting Disney’s motion to dismiss de novo, Boquist v. Courtney, 32 F.4th 764, 773
(9th Cir. 2022), and its denial of leave to amend a complaint for abuse of discretion,
Zucco Partners, LLC v. Digimarc Corp., 552 F.3d 981, 989 (9th Cir. 2009). We
have jurisdiction under 28 U.S.C. § 1291 and affirm.
1. The district court properly dismissed K&K’s Lanham Act claims. When,
as here, the challenged product is an “expressive work,” we apply the test set forth
in Rogers v. Grimaldi, 875 F.2d 994, 1000 (2d Cir. 1989), to accommodate First
Amendment concerns and determine whether the Lanham Act applies. See Brown
v. Elec. Arts, Inc., 724 F.3d 1235, 1239 (9th Cir. 2013). Under the Rogers test, we
“apply the [Lanham] Act . . . only if the defendant’s use of the mark (1) is not
artistically relevant to the work or (2) explicitly misleads consumers as to the source
or the content of the work.” Gordon v. Drape Creative, Inc., 909 F.3d 257, 264 (9th
Cir. 2018); see also Twentieth Century Fox Television v. Empire Distrib., Inc., 875
F.3d 1192, 1196–97 (9th Cir. 2017) (holding that the Rogers protections extend to
promotional materials related to an expressive work, including consumer products).
Duke Caboom clearly has artistic relevance. See Brown, 724 F.3d at 1245
(“even the slightest artistic relevance” is enough under Rogers). And K&K did not
allege sufficient facts that would show the character was explicitly misleading as to
its source. The “explicitly misleading” test imposes a “high bar that requires the use
to be an explicit indication, overt claim, or explicit misstatement about the source of
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the work.” Dr. Seuss Enters., L.P. v. ComicMix LLC, 983 F.3d 443, 462 (9th Cir.
2020) (quotations omitted). In evaluating whether the use of a mark is explicitly
misleading, we consider “(1) the degree to which the junior user uses the mark in the
same way as the senior user and (2) the extent to which the junior user has added his
or her own expressive content to the work beyond the mark itself.” Id. (quoting
Gordon, 909 F.3d at 270).
Neither consideration is met here. Unlike Evel Knievel, Duke Caboom is a
fictional character in an animated film about toys that come to life.1 Disney has also
added significant expressive content to the mark to make it different from Evel
Knievel. In particular, Disney created a character with a different name, appearance,
and backstory than Evel Knievel. Disney did not suggest that Evel Knievel was
involved in Toy Story 4, nor was Evel Knievel mentioned in the film. See also
Gordon, 909 F.3d at 271 (noting that use of a mark is less likely to be explicitly
misleading when “the mark served as only one component of the larger expressive
work”). For these reasons, K&K did not state a plausible claim that survives the
Rogers test.2 And K&K’s argument that Lanham Act claims cannot be decided on
1
We may consider Toy Story 4 as part of the complaint itself through the
incorporation by reference doctrine. See Brown, 724 F.3d at 1248 n.7.
2
K&K’s Lanham Act claim for trademark dilution fails under the noncommercial
use exception. See 15 U.S.C. § 1125(c)(3)(C); see also Perfect 10, Inc. v. Visa Int’l
Serv. Ass’n, 494 F.3d 788, 794 (9th Cir. 2007) (holding that the court may “affirm
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motions to dismiss is contrary to precedent. See, e.g., Brown, 724 F.3d at 1247–48.
2. The transformative use defense bars K&K’s claim that Disney violated
K&K’s right to publicity under Nevada law. Nev. Rev. Stat. § 597.790. K&K does
not dispute that a right to publicity claim under Nevada law is subject to this defense.
To determine if a use is transformative, courts consider various factors that balance
the defendant’s First Amendment rights with the plaintiff’s claimed right of
publicity. See Keller v. Elec. Arts Inc. (In re NCAA Student-Athlete Name &
Likeness Licensing Litig.), 724 F.3d 1268, 1274 (9th Cir. 2013).
These factors favor Disney. The Duke Caboom action figure is “more than a
mere likeness or literal depiction” of Evel Knievel. Id. at 1275 (quotations omitted).
Even if the character may be generically reminiscent of Knievel to some extent, the
district court properly concluded that it is “not a literal depiction,” and instead shares
general features basic to stuntmen. Moreover, the economic value of the toy action
figure does not derive from Evel Knievel’s persona. Id. at 1274. Instead, it reflects
the success of Disney’s Toy Story franchise and its popularity among children. The
other factors—which are overlapping—favor Disney for the same reasons. Id. at
1274–75. And contrary to K&K’s argument on appeal, the transformative use
on any ground supported by the record”). “Speech is noncommercial ‘if it does more
than propose a commercial transaction’ and contains some ‘protected expression.’”
VIP Prods. LLC v. Jack Daniel’s Props., Inc., 953 F.3d 1170, 1176 (9th Cir. 2020)
(citation omitted) (quoting Mattel, Inc. v. MCA Recs., Inc., 296 F.3d 894, 906 (9th
Cir. 2002)). That is plainly the case here.
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defense can be adjudicated “as a matter of law if no trier of fact could reasonably
conclude that the [work is] not transformative.” Hilton v. Hallmark Cards, 599 F.3d
894, 910 (9th Cir. 2010).
3. The district court acted within its discretion in denying K&K leave to
amend. Leave to amend may be denied when a proposed amended complaint does
not state a claim for relief. Hinton v. Pac. Enters., 5 F.3d 391, 397 (9th Cir. 1993).
The internal Disney statements that K&K points to, gained during discovery, do not
cure the deficiencies in K&K’s Lanham Act allegations or overcome K&K’s
reliance on the transformative use defense. Therefore, the district court did not abuse
its discretion in denying leave to amend.
AFFIRMED.
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