Fleischer Studios, Inc. v. A.V.E.L.A., Inc.

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

FLEISCHER STUDIOS, INC., 
Plaintiff-Appellant,
v. No. 09-56317
A.V.E.L.A., INC., DBA Art & D.C. No.
Vintage Entertainment Licensing  2:06-cv-06229-
Agency; ART-NOSTALGIA.COM, INC.; FMC-MAN
X ONE X MOVIE ARCHIVE, INC.;
OPINION
BEVERLY HILLS TEDDY BEAR CO.;
LEO VALENCIA,
Defendants-Appellees.

Appeal from the United States District Court
for the Central District of California
Florence-Marie Cooper, District Judge, Presiding

Argued and Submitted
November 2, 2010—Pasadena, California

Filed February 23, 2011

Before: J. Clifford Wallace and Susan P. Graber,
Circuit Judges, and Richard Mills,
Senior District Judge.*

Opinion by Judge Wallace;
Dissent by Judge Graber

*The Honorable Richard Mills, Senior United States District Judge for
the Central District of Illinois, sitting by designation.

2765
2768 FLEISCHER STUDIOS v. A.V.E.L.A., INC.

COUNSEL

Robert P. LoBue (argued), Gloria C. Phares, A. Leah Vickers,
Patterson Belknap Webb & Tyler LLP, New York, New
York, and Rex S. Heinke, Akin Gump Strauss Hauer & Feld
LLP, Los Angeles, California, for appellant Fleischer Studios,
Inc.

Douglas D. Winter (argued), The Ball Law Firm, LLP, Los
Angeles, California, for appellees A.V.E.L.A., Inc., DBA Art
& Vintage Entertainment Licensing Agency, et al.

OPINION

WALLACE, Senior Circuit Judge:

This appeal stems from the district court’s summary judg-
ment dismissing Fleischer Studios, Inc.’s (Fleischer) copy-
right and trademark infringement action. The district court
ruled that Fleischer held neither a valid copyright nor a valid
trademark in the Betty Boop cartoon character and thus
lacked standing to sue. Fleischer appeals. The district court
 FLEISCHER STUDIOS v. A.V.E.L.A., INC. 2769
had jurisdiction pursuant to 28 U.S.C. § 1338(a), and our
jurisdiction arises under 28 U.S.C. § 1291. We affirm.

I.

Betty Boop “combined in appearance the childish with the
sophisticated—a large round baby face with big eyes and a
nose like a button, framed in a somewhat careful coiffure,
with a very small body . . . .” Fleischer Studios v. Ralph A.
Freundlich, Inc., 5 F. Supp. 808, 809 (S.D.N.Y. 1934). Betty
Boop was the creation of Max Fleischer, then head of Fleis-
cher Studios, Inc. (Original Fleischer). Beginning in 1930,
Original Fleischer developed a number of cartoon films fea-
turing Betty Boop. For a time, Original Fleischer licensed the
Betty Boop image for use in toys, dolls, and other merchan-
dise. Approximately ten years after creating her, Original
Fleischer abandoned Betty Boop and sold its rights to both her
cartoons and her character. Soon after, in 1946, Original
Fleischer was dissolved.

Max Fleischer’s family attempted to revive the Fleischer
cartoon business in the early 1970s. The family incorporated
its new entity under the same name as Original Fleischer and
attempted to repurchase the intellectual property rights to the
Betty Boop character. To be clear, Fleischer, the plaintiff in
this action, is a distinct and separate entity from the now
defunct Original Fleischer which first owned Betty Boop.

Fleischer believes that its intellectual-property-rights pur-
chases have made it the exclusive owner of the Betty Boop
character copyright and trademark. Based on this belief, Fleis-
cher licenses the Betty Boop character for use in toys, dolls,
and other merchandise. This merchandise has reached such a
high level of popularity that even drug dealers have been
known to use it. See United States v. Lakoskey, 462 F.3d 965,
971 (8th Cir. 2006) (“A search warrant was issued, and the
package was opened pursuant to that warrant on January 26,
2004. The package contained a large ceramic Betty Boop doll,
2770 FLEISCHER STUDIOS v. A.V.E.L.A., INC.
with four concealed, separately wrapped plastic bundles of
high-purity-level methamphetamine inside”).

The defendants in this action, A.V.E.L.A., Inc., Art-
Nostalgia.com, Inc., X One X Movie Archive, Inc., and Leo
Valencia (collectively, A.V.E.L.A.), also license Betty Boop
merchandise. The copyright pursuant to which A.V.E.L.A.
licenses its products is based on vintage posters featuring
Betty Boop’s image that A.V.E.L.A. has restored.

During summary judgment proceedings before the district
court, the parties disputed whether Fleischer owned an exclu-
sive copyright to the Betty Boop character. Fleischer asserted
that its ownership of the copyright, which was first owned by
Original Fleischer, arises through several alternative chains of
title. Only one chain is relevant here, however, because Fleis-
cher has abandoned the others on appeal. The purported title
chain is as follows: Original Fleischer transferred its rights to
Paramount Pictures, Inc. (Paramount) in 1941; Paramount
transferred those rights to UM&M TV Corp. (UM&M) in
1955; in 1958, UM&M transferred these rights to National
Telefilm Associates, Inc. (NTA), which became Republic Pic-
tures in 1986; and finally, Republic Pictures transferred the
exclusive copyright to Fleischer in 1997.

A.V.E.L.A. disputed this alleged chain of title, arguing that
there was no admissible evidence to establish each link in the
chain with the exception of the transfer from Original Fleis-
cher to Paramount. The district court agreed and held that
Fleischer failed to satisfy its burden of proof regarding the
transfer of rights from UM&M to NTA and from NTA to
Republic Pictures.

The district court also dismissed Fleischer’s trademark
infringement claim, holding that Fleischer failed to submit
proper evidence of a registered federal trademark in the Betty
Boop image, and, although it had evidence of a registered fed-
eral trademark in the name “Betty Boop,” the fractured own-
 FLEISCHER STUDIOS v. A.V.E.L.A., INC. 2771
ership and use of that mark destroyed Fleischer’s trademark
rights. The court further held that Fleischer did not establish
that it owned common-law trademarks in Betty Boop’s name
or image.

There is no doubt that a separate Betty Boop character
copyright exists. Although there is no evidence in the record
that Original Fleischer filed a copyright registration for the
Betty Boop character, that is of no moment. Because all of the
copied works were created before 1978, both parties agree
that the Copyright Act of 1909 (1909 Act) applies to the
copyrights at issue in this litigation. See Self-Realization Fel-
lowship Church v. Ananda Church of Self-Realization, 206
F.3d 1322, 1325 (9th Cir. 2000). Under section 3 of the 1909
Act:

The copyright provided by this title shall protect all
the copyrightable component parts of the work copy-
righted, and all matter therein in which copyright is
already subsisting, but without extending the dura-
tion or scope of such copyright. The copyright upon
composite works or periodicals shall give to the pro-
prietor thereof all the rights in respect thereto which
he would have if each part were individually copy-
righted under this title.

17 U.S.C. § 3 (repealed) (emphasis added); see also Rice v.
Fox Broad. Co., 330 F.3d 1170, 1175-76 (9th Cir. 2003)
(“[C]haracters that are ‘especially distinctive’ or the ‘story
being told’ receive protection apart from the copyrighted
work”, citing Olson v. Nat’l Broad. Co., 855 F.2d 1446, 1452
(9th Cir. 1988)).

The parties agree that Betty Boop became a separate copy-
rightable component of one of Original Fleischer’s 1930
films, and we accept that concession for the purposes of this
appeal. Shivers v. Amerco, 670 F.2d 826, 832 n.3 (9th Cir.
1982); see also Rice, 330 F.3d at 1175-76. The logical result
2772 FLEISCHER STUDIOS v. A.V.E.L.A., INC.
of this concession is that Original Fleischer owned “all the
rights in respect [to Betty Boop] which [it] would have if” it
had individually copyrighted it.1 17 U.S.C. § 3; Kaplan v. Fox
Film Corp., 19 F. Supp. 780, 781 (S.D.N.Y. 1937).

Fleischer now appeals, objecting to both the district court’s
copyright and trademark rulings. We review the district
court’s summary judgment de novo. Ellison v. Robertson, 357
F.3d 1072, 1075 (9th Cir. 2004).

II.

[1] Fleischer bears the burden of proving copyright owner-
ship. Litchfield v. Spielberg, 736 F.2d 1352, 1355 (9th Cir.
1984) (“To prove copyright infringement, the plaintiff must
show . . . ownership of the copyright . . .”). As mentioned ear-
lier, Fleischer asserts ownership of a copyright in the Betty
Boop character through the following chain of title: Original
Fleischer to Paramount to UM&M to NTA to Republic Pic-
tures to Fleischer. Because this complete chain is necessary to
establish ownership, Fleischer’s copyright action requires it to
establish each link.

[2] It is undisputed that in 1941 Paramount obtained from
Original Fleischer the rights to both the Betty Boop character
and numerous Betty Boop cartoons. What is disputed, how-
ever, is whether Paramount then transferred the Betty Boop
character to UM&M. Fleischer argues that it did so by a 1955
purchase agreement that stated, in part:
1
Fleischer cites Walt Disney Productions v. Air Pirates, 581 F.2d 751
(9th Cir. 1978), in support of its conclusion that there is no stand-alone
copyright to Betty Boop the character. Fleischer is correct that Walt Dis-
ney held that character copyrights may be created as component parts of
a film or cartoon booklet. Id. at 754. But that holding does not lead to the
conclusion that once created, the character copyright cannot be transferred
or sold separately from the copyright-creating work. Given the clear lan-
guage of section 3 of the 1909 Act and the absence of an on-point binding
precedent, we disagree with Fleischer’s conclusion that Walt Disney con-
trols this issue.
 FLEISCHER STUDIOS v. A.V.E.L.A., INC. 2773
Paramount hereby grants and assigns to [UM&M] all
of Paramount’s right, title and interest in and to said
Photoplays [of Betty Boop] which are deliverable by
Paramount to [UM&M] hereunder and do not revert
to Paramount under Paragraph 11 hereof, hereinafter
for convenience referred to as “Sold Photoplays”,
any copyrights subsisting therein, the literary mate-
rial upon which they are based and the instruments
whereby Paramount acquired its right, title and inter-
est in and to such literary material . . . .

[3] However, a key provision in that same agreement
carved out the transfer of the characters in those Sold Photo-
plays:

Anything to the contrary notwithstanding, no grant
or assignment is made hereunder to [UM&M] of the
characters and characterizations contained in said
Sold Photoplays or said literary material, or of the
copyrights in said characters or characterizations,
or of any production or other rights in said charac-
ters and characterizations, or to use said characters
and characterizations or the names of said charac-
ters or trade names, trademark and names of the
series of Sold Photoplays or of said literary material
in any manner except . . . only as part of the particu-
lar Sold Photoplay in which they or any of them are
contained . . . .

In other words, the purchase agreement explicitly provided
that the right to the Betty Boop character copyright was
retained by Paramount, rather than transferred to UM&M.
The “[a]nything to the contrary notwithstanding” clause is
unambiguous. See Cisneros v. Alpine Ridge Grp., 508 U.S.
10, 17 (1993) (“[T]he use of such a ‘notwithstanding’ clause
clearly signals the drafter’s intention that the provisions of the
‘notwithstanding’ section override conflicting provisions of
any other section”).
2774 FLEISCHER STUDIOS v. A.V.E.L.A., INC.
[4] The “doctrine of indivisibility” has no impact on this
conclusion. “[T]he doctrine of indivisibility is a judge-made
rule that relates primarily to standing.” Abend v. MCA, Inc.,
863 F.2d 1465, 1469 (9th Cir. 1988), aff’d on other grounds
sub nom., Stewart v. Abend, 495 U.S. 207 (1990). “Under the
doctrine, a ‘licensee’ of a copyright—i.e., someone who holds
only partial copyright privileges—may not copyright a work
in the licensee’s name.” Id. Fleischer argues that if, as we
hold here, Paramount retained the copyright to the Betty Boop
character but transferred the copyright to the films to UM&M,
the doctrine of indivisibility would have prevented UM&M
from renewing its copyright. That renewal-blocking result is
evidence, according to Fleischer, that neither party intended
to separate the Betty Boop character and film rights. “At
most,” Fleischer states, “Paramount may have retained a con-
tractual right (or license back) to exploit the character apart
from the films.”

[5] Fleischer is mistaken. Under the 1909 Act, the doctrine
of indivisibility may have prohibited a copyright owner from
renewing his or her copyright if, for example, he or she had
previously sold the magazine-publishing rights to his or her
story. Id.2 Or, because the law abhors a forfeiture, a court
would deem the purported owner of the magazine-publishing
rights to be a mere licensee, thereby allowing the author to
renew the copyright. Sybersound Records, Inc. v. UAV Corp.,
2
We use the word “may” because it is far from certain that the doctrine
of indivisibility applies to copyright registration or renewals. See Abend,
863 F.2d at 1469 (doctrine of indivisibility did not preclude publisher from
registering copyright in rights-divided work). Even at the time of the exe-
cution of the UM&M agreement, the doctrine’s continued vitality in cer-
tain contexts was in considerable doubt. See, e.g., Wodehouse v. Comm’r
of Internal Revenue, 166 F.2d 986, 989 (4th Cir. 1948) (“[S]erial rights,
book rights, dramatic production rights and motion picture rights of a liter-
ary production are rights which may be and are separately and effectively
bought and sold in the literary market”), overruled on other grounds by
Comm’r of Internal Revenue v. Wodehouse, 337 U.S. 369 (1949); Herwig
v. United States, 105 F. Supp. 384, 389 (Ct. Cl. 1952) (similar).
 FLEISCHER STUDIOS v. A.V.E.L.A., INC. 2775
517 F.3d 1137, 1145 (9th Cir. 2008). But that is not the sce-
nario here. Through the UM&M agreement, UM&M obtained
the “totality of rights commanded by copyright” for the Betty
Boop films, id., quoting Gardner v. Nike, Inc., 279 F.3d 774,
778 (9th Cir. 2002); what it did not obtain were the rights to
the Betty Boop character. While the doctrine of indivisibility
may have prohibited UM&M from renewing the film copy-
right if, for example, it did not obtain the DVD distribution
rights to the Betty Boop films it purchased, the doctrine
would have had no impact on UM&M’s attempt to renew its
copyright if it did not own a character copyright component
part of the film. See Richlin v. Metro-Goldwyn-Mayer Pic-
tures, Inc., 531 F.3d 962, 976 (9th Cir. 2008) (renewal of
motion picture permitted without owning all component
parts); cf. Self-Realization Fellowship Church, 206 F.3d at
1325 (“[A] blanket copyright gives a magazine publisher
rights in an individual contribution only if the publisher owns
the common law copyright as the author of the contribution,
or as the author’s assignee”, citing Mail & Express Co. v. Life
Pub. Co., 192 F. 899 (2d Cir. 1912)). In short, the doctrine of
indivisibility does not deprive copyright holders of the right
to transfer or, in this case, retain the component parts of their
copyrights. If we held otherwise, we would be directly contra-
vening section 3 of the 1909 Act by depriving Paramount of
“all the rights in respect [to the component part] which [it]
would have if each part were individually copyrighted.” 17
U.S.C. § 3 (repealed).3

[6] Contrary to another of Fleischer’s arguments, Para-
mount’s conduct subsequent to the execution of the contract
3
We are perplexed by the dissent’s complaint that, in reaching this con-
clusion, we have “adopt[ed] a theory rejected by the district court and
advanced by neither party on appeal.” Dissent at 2787. It is beyond dispute
that “[i]f the decision below is correct, it must be affirmed, even if the dis-
trict court relied on the wrong grounds or wrong reasoning.” Jackson v.
S. Cal. Gas Co., 881 F.2d 638, 643 (9th Cir. 1989). The law is the law.
Regardless of whether the parties correctly interpreted the doctrine of indi-
visibility, we are still obliged to do so.
2776 FLEISCHER STUDIOS v. A.V.E.L.A., INC.
does not cast doubt on our conclusion. Fleischer is correct that
subsequent conduct can be used in some instances to discern
contractual intent. See Wolkowitz v. FDIC (In re Imperial
Credit Industries, Inc.), 527 F.3d 959, 966 (9th Cir. 2008).
However, Paramount’s subsequent conduct is not evidence of
Paramount’s intent to transfer the Betty Boop character to
UM&M. Paramount did not stand idly by while UM&M
renewed the copyrights and profited from ownership of those
copyrights. Instead, the record suggests that three years after
entering into the UM&M agreement, Paramount transferred
its Betty Boop character copyright to Harvey Films. While we
have doubts as to whether the use of subsequent behavior in
this instance—where the contractual language is unambiguous
—is appropriate, see Wells Fargo Bank & Trust Co. v.
McDuffie, 71 F.2d 720, 728 (9th Cir. 1934), Paramount’s sub-
sequent behavior supports our conclusion that it did not trans-
fer the rights to the Betty Boop character copyright by the
UM&M agreement.

The dissent states that we are “answer[ing] only half of the
issue[ ] by failing to explain what happened to the copyright
after it transferred to Harvey Films in the 1950s.” Dissent at
2787. That complaint is not well-taken. In this case, the only
issue raised by Fleischer on appeal is whether Fleischer
obtained the Betty Boop copyright via the chain of title Origi-
nal Fleischer to Paramount to UM&M to NTA to Republic to
Fleischer. In the district court, Fleischer raised a number of
other chain-of-title theories but the district court held all of
them to be faulty. By not seeking review of those holdings
here, Fleischer has abandoned them. See Cook v. Schriro, 538
F.3d 1000, 1014 n.5 (9th Cir. 2008) (issue not raised on
appeal is abandoned); United States v. Gregory, 322 F.3d
1157, 1160 n.2 (9th Cir. 2003) (same). The dissent cannot res-
urrect them. It would be patently unfair to A.V.E.L.A. to rule
in favor of Fleischer on one of the theories not raised in Fleis-
cher’s opening brief. See Stuard v. Stewart, 401 F.3d 1064,
1067 (9th Cir. 2005) (“[W]e are not going to construct an
 FLEISCHER STUDIOS v. A.V.E.L.A., INC. 2777
argument for the state sua sponte, depriving Stuard’s counsel
of a fair chance to respond to it”).

Perhaps Fleischer should have argued that A.V.E.L.A.
waived its character-carveout argument by not asserting it to
the district court. Resolution Trust Corp. v. First Am. Bank,
155 F.3d 1126, 1129 (9th Cir. 1998) (explaining that issues
not raised before the district court are generally forfeited).
Perhaps Fleischer does not object to A.V.E.L.A.’s argument
on this ground because, as A.V.E.L.A. argues, it raised the
issue with sufficient clarity to preserve it. Whatever the rea-
son, Fleischer’s failure to argue that A.V.E.L.A. waived this
argument requires us to reach its merits. Norwood v. Vance,
591 F.3d 1062, 1068 (9th Cir. 2010) (“this court will not
address waiver if not raised by the opposing party”).

[7] Upon review of the merits of A.V.E.L.A.’s character-
carveout argument, it is clear that Paramount did not transfer
the copyright to the Betty Boop character to UM&M. Because
the chain of title is broken, and the only chain of title at issue
in this appeal is this one involving UM&M, the district court
properly dismissed Fleischer’s copyright-infringement claim.

III.

Fleischer also sued A.V.E.L.A. for infringing its trade-
marks. The A.V.E.L.A. products to which Fleischer objected
include Betty Boop dolls as well as t-shirts and handbags
prominently displaying her image. The district court dis-
missed Fleischer’s trademark-infringement claim, holding that
Fleischer did not provide evidence, in the time required by the
Federal Rules of Civil Procedure, that Fleischer owned either
the common law or federally registered trademarks that
A.V.E.L.A. allegedly infringed.

Both parties’ briefs discuss the details of whether the dis-
trict court’s decision was correct, including the issue of
whether cartoon characters are protectable as trademarks,
2778 FLEISCHER STUDIOS v. A.V.E.L.A., INC.
whether Fleischer owns a registered image trademark in Betty
Boop’s image and name, whether Fleischer owns a common-
law trademark in “Betty Boop”, whether the fractured owner-
ship of the Betty Boop copyright precludes Fleischer from
asserting a trademark claim, and, finally, whether A.V.E.L.A.
infringed Fleischer’s marks. But all of these arguments are
mooted by controlling precedent that neither party cited:
International Order of Job’s Daughters v. Lindeburg & Co.,
633 F.2d 912 (9th Cir. 1980).

Although the parties did not cite or argue the application of
Job’s Daughters to the facts of this case, and while the district
court did not base its decision on that case, “it is clear that we
have the power to affirm [the district court’s decision] on an
alternate basis” if it is supported by the record. Badea v. Cox,
931 F.2d 573, 575 n.2 (9th Cir. 1991). Because resolving this
issue is in the interest of judicial economy, we elect to do so.
See United States v. Koyomejian, 970 F.2d 536, 541 (9th Cir.
1992), citing Badea, 931 F.2d at 575 n.2.

In Job’s Daughters, plaintiff Job’s Daughters sued defen-
dant Lindeburg “for trademark infringement arising out of
Lindeburg’s manufacture and sale of jewelry bearing the
Job’s Daughters insignia.” 633 F.2d at 914. Job’s Daughters
was a young women’s organization that used its name and
emblem as trademarks. Id. Lindeburg was a maker and
retailer of fraternal jewelry. Id. Lindeburg began selling jew-
elry and related items bearing the Job’s Daughters insignia
and, after failing to negotiate a license, Job’s Daughters sued
Lindeburg for trademark infringement. Id.

When the case came to us on appeal, we evaluated the same
trademark infringement claims that are asserted here: those
based on 15 U.S.C. §§ 1114 and 1125(a). Job’s Daughters,
633 F.2d at 917. We held that “Lindeburg was not using the
Job’s Daughters name and emblem as trademarks.” Id. at 920.
That conclusion, and the reasoning that Job’s Daughters used
to reach it, are directly applicable to the case before us.
 FLEISCHER STUDIOS v. A.V.E.L.A., INC. 2779
[8] “In general,” Job’s Daughters stated,

trademark law is concerned only with identification
of the maker, sponsor, or endorser of the product so
as to avoid confusing consumers. Trademark law
does not prevent a person from copying so-called
“functional” features of a product which constitute
the actual benefit that the consumer wishes to pur-
chase, as distinguished from an assurance that a
particular entity made, sponsored, or endorsed a
product.

....

It is not uncommon for a name or emblem that
serves in one context as a collective mark or trade-
mark also to be merchandised for its own intrinsic
utility to consumers. We commonly identify our-
selves by displaying emblems expressing alle-
giances. Our jewelry, clothing, and cars are
emblazoned with inscriptions showing the organiza-
tions we belong to, the schools we attend, the land-
marks we have visited, the sports teams we support,
the beverages we imbibe. Although these inscrip-
tions frequently include names and emblems that are
also used as collective marks or trademarks, it
would be naive to conclude that the name or emblem
is desired because consumers believe that the prod-
uct somehow originated with or was sponsored by
the organization the name or emblem signifies.

Id. at 917 (internal citations omitted; emphases added).

After setting forth these principles, Job’s Daughters
explained the role of the court in determining whether an
infringer’s use of an image and name was for functional or
trademark purposes: “[A] court must closely examine the arti-
cles themselves, the defendant’s merchandising practices, and
2780 FLEISCHER STUDIOS v. A.V.E.L.A., INC.
any evidence that consumers have actually inferred a connec-
tion between the defendant’s product and the trademark
owner.” Id. at 919. Accordingly, we held:

Lindeburg was not using the Job’s Daughters name
and emblem as trademarks. The insignia were a
prominent feature of each item so as to be visible to
others when worn, allowing the wearer to publicly
express her allegiance to the organization. Lindeburg
never designated the merchandise as “official” Job’s
Daughters’ merchandise or otherwise affirmatively
indicated sponsorship. Job’s Daughters did not show
a single instance in which a customer was misled
about the origin, sponsorship, or endorsement of
Lindeburg’s jewelry, nor that it received any com-
plaints about Lindeburg’s wares. Finally, there was
evidence that many other jewelers sold unlicensed
Job’s Daughters jewelry, implying that consumers
did not ordinarily purchase their fraternal jewelry
from only “official” sources. We conclude that Job’s
Daughters did not meet its burden of proving that a
typical buyer of Lindeburg’s merchandise would
think that the jewelry was produced, sponsored, or
endorsed by the organization. The name and emblem
were functional aesthetic components of the product,
not trademarks. There could be, therefore, no
infringement.

Id. at 920.

[9] Job’s Daughters is directly applicable to Fleischer’s
trademark claims. Even a cursory examination, let alone a
close one, of “the articles themselves, the defendant’s mer-
chandising practices, and any evidence that consumers have
actually inferred a connection between the defendant’s prod-
uct and the trademark owner,” reveal that A.V.E.L.A. is not
using Betty Boop as a trademark, but instead as a functional
product. See id. at 919. Just as in Job’s Daughters, Betty
 FLEISCHER STUDIOS v. A.V.E.L.A., INC. 2781
Boop “w[as] a prominent feature of each item so as to be visi-
ble to others when worn . . . .” Id. A.V.E.L.A. “never desig-
nated the merchandise as ‘official’ [Fleischer] merchandise or
otherwise affirmatively indicated sponsorship.” Id. Fleischer
“did not show a single instance in which a customer was mis-
led about the origin, sponsorship, or endorsement of
[A.V.E.L.A.’s products], nor that it received any complaints
about [A.V.E.L.A.’s] wares.” Id. Given the marked similarity
between the facts of Job’s Daughters and the appeal before
us, we reach the same conclusion here as in our earlier deci-
sion. “The name and [Betty Boop image] were functional aes-
thetic components of the product, not trademarks. There could
be, therefore, no infringement.” Id.; see also New Kids on the
Block v. News Am. Pub., Inc., 971 F.2d 302, 309 (9th Cir.
1992) (“[T]he trademark laws do not give the New Kids the
right to channel their fans’ enthusiasm (and dollars) only into
items licensed or authorized by them”), citing Job’s Daugh-
ters.

Dastar Corp. v. Twentieth Century Fox Film Corp., another
case that both parties failed to cite, is also relevant. 539 U.S.
23 (2003). Dastar held that where a copyright is in the public
domain, a party may not assert a trademark infringement
action against an alleged infringer if that action is essentially
a substitute for a copyright infringement action. Id. at 33. To
do so would be to circumvent the Copyright Act and allow
trademark holders perpetual rights to exploit their creative
work. Id. The Court explained,

The right to copy, and to copy without attribution,
once a copyright has expired, like the right to make
an article whose patent has expired—including the
right to make it in precisely the shape it carried when
patented—passes to the public. In general, unless an
intellectual property right such as a patent or copy-
right protects an item, it will be subject to copying.
The rights of a patentee or copyright holder are part
of a carefully crafted bargain, under which, once the
2782 FLEISCHER STUDIOS v. A.V.E.L.A., INC.
patent or copyright monopoly has expired, the public
may use the invention or work at will and without
attribution. Thus, in construing the Lanham Act, we
have been careful to caution against misuse or over-
extension of trademark and related protections into
areas traditionally occupied by patent or copyright.

Id. (internal quotations, citations and alterations omitted;
emphases added).

If we ruled that A.V.E.L.A.’s depictions of Betty Boop
infringed Fleischer’s trademarks, the Betty Boop character
would essentially never enter the public domain. Such a result
would run directly contrary to Dastar. 539 U.S. at 37 (“To
hold otherwise would be akin to finding that § 43(a) created
a species of perpetual patent and copyright, which Congress
may not do”).

[10] Therefore, even if Fleischer owns trademarks in Betty
Boop, it cannot assert a trademark infringement action against
A.V.E.L.A. Given that A.V.E.L.A.’s use of Betty Boop is
functional and aesthetic, and because ruling in Fleischer’s
favor would prevent the Betty Boop character from ever
entering the public domain, Fleischer’s infringment claim is
barred by Job’s Daughters and Dastar.

In light of our holding, we also deny as moot Fleischer’s
motion to take judicial notice of the incontestible status of its
trademark registrations.

AFFIRMED.

GRABER, Circuit Judge, dissenting:

I respectfully dissent.
 FLEISCHER STUDIOS v. A.V.E.L.A., INC. 2783
The beginning and the ending of this story are undisputed.
Max Fleischer created the lovable character Betty Boop in the
1930s. In 1941, he sold to Paramount Pictures the copyright
to certain cartoons and to the character Betty Boop herself.
Max Fleischer died in 1972.

After Fleischer’s death, some of his descendants incorpo-
rated Fleischer Studios, which is Plaintiff here. Part of Plain-
tiff’s plan was to bring back into circulation the character
Betty Boop. Carrying out that plan, Plaintiff purchased the
rights to Betty Boop from various entities in the 1980s and
1990s. When Defendants began selling Betty Boop merchan-
dise, Plaintiff brought this action alleging, among other
things, copyright infringement.

Plaintiff must establish the chain of title of the copyright to
the character Betty Boop. It is undisputed that Paramount
owned the copyright as of 1941. The dispute focuses on the
chain of title between Paramount and Plaintiff. In the district
court, Plaintiff argued, primarily, that Paramount sold the
copyright in 1955 to UM&M TV Corporation, which eventu-
ally sold it to Plaintiff. Plaintiff argued, alternatively, that
even if Paramount did not sell the copyright to UM&M, Para-
mount sold the copyright in 1958 to Harvey Films, which
eventually sold the copyright to Plaintiff. In other words, one
chain of title leads through UM&M and another leads through
Harvey Films, but both paths lead to Plaintiff.

A. The District Court’s View: Copyright Transferred to
UM&M

The district court held that Paramount sold the copyright to
UM&M in 1955. The district court held, however, that the
post-1950s link between UM&M and Plaintiff was broken,
largely because of the court’s evidentiary rulings. Plaintiff
appealed.

On appeal, Plaintiff made precisely the arguments one
would expect: The district court erred in its evidentiary rul-
2784 FLEISCHER STUDIOS v. A.V.E.L.A., INC.
ings and in its conclusion that the link between UM&M and
Plaintiff was broken. In their answering brief, Defendants
defended the district court’s holdings on those points. In my
view, Plaintiff is correct that the district court erred. For
example, the relevant statements in the 1997 settlement agree-
ment qualify as an exception to hearsay under Federal Rule of
Evidence 803(15) and establish the link between UM&M and
Plaintiff.

In sum, if the copyright transferred to UM&M, Plaintiff
prevails.

B. Defendants’ New Theory: Copyright Transferred to No
One

Defendants also raised an entirely new theory. They argued
that the district court erred in concluding that Paramount sold
the copyright to UM&M. Defendants argued that, because of
the doctrine of indivisibility, the copyright passed neither to
UM&M nor to Harvey Films; instead, the copyright entered
the public domain by virtue of Paramount’s failure to renew
the copyrights to certain cartoons.

Defendants’ argument fails on its own terms. Even if the
doctrine of indivisibility applied, as Defendants assert, the
copyright nevertheless transferred to UM&M.1 In short, even
if we accept Defendants’ premise, it does not change the
result: The copyright transferred to UM&M. Because, as
1
Because the majority, too, rejects Defendants’ argument, I do not
explain in detail how the doctrine of indivisibility would operate. Briefly,
Defendants’ explanation for how the doctrine would operate would be
contrary to the parties’ subsequent conduct, whereas an alternative inter-
pretation is consistent with the parties’ subsequent conduct and leads to
the conclusion that the copyright transferred to UM&M. See Wolkowitz v.
FDIC (In re Imperial Credit Indus., Inc.), 527 F.3d 959, 966 (9th Cir.
2008) (“As with any contract, our goal is to give effect to the mutual intent
of the parties . . . [which permits examination of] the subsequent conduct
of the parties.”).
 FLEISCHER STUDIOS v. A.V.E.L.A., INC. 2785
explained above, the copyright then passed from UM&M to
Plaintiff, Plaintiff prevails.

C. The Majority’s View: Copyright Transferred to Harvey
Films

The majority strikes out on its own and adopts a position
rejected by the district court and advanced by neither party on
appeal. The majority holds that Paramount did not sell the
copyright to UM&M but instead sold it to Harvey Films. See
maj. op. at 2776 (“Paramount transferred its Betty Boop char-
acter copyright to Harvey Films.”).2 But the majority’s analy-
sis stops mid-stream. Plaintiff argued, before the district court
and on appeal, that if the copyright transferred to Harvey
Films, then Plaintiff prevails because Harvey Films later sold
the copyright to Plaintiff.

The majority inexplicably fails to respond to that theory,
asserting only that Plaintiff waived the argument that it pos-
sesses the copyright via the Harvey Films chain of title. I dis-
agree with the majority’s assertion for four reasons.

First, it is true that Plaintiff did not raise the Harvey Films
chain of title in its opening brief. But its failure in that regard
is perfectly understandable. The district court had ruled in
Plaintiff’s favor on every link in the UM&M chain except
one. Plaintiff thus challenged only the portion of the district
court’s opinion in which Plaintiff lost. That strategy makes
particular sense because Defendants had never before
2
The majority reaches that result by concluding that the doctrine of indi-
visibility does not apply in these circumstances. I am uncertain whether
the doctrine of indivisibility applies here. Compare Kaplan v. Fox Film
Corp., 19 F. Supp. 780, 781-82 (S.D.N.Y. 1937) (stating that indivisibility
does not apply in circumstances similar to the circumstances here), with
Silvers v. Sony Pictures Entm’t, Inc., 402 F.3d 881, 886 (9th Cir. 2005)
(en banc) (suggesting that indivisibility applied before the 1976 change in
copyright laws). Even if the majority is correct, however, Plaintiff never-
theless prevails for the reasons stated in text.
2786 FLEISCHER STUDIOS v. A.V.E.L.A., INC.
advanced the argument made in their answering brief. Fur-
thermore, after Defendants did advance a new argument,
Plaintiff immediately retorted, in its reply brief, that even if
the doctrine of indivisibility applied, Plaintiff prevails via the
Harvey Films chain of title.3 I see nothing to be gained from
encouraging litigants to protect against the waiver doctrine by
asserting, pro forma, in their opening briefs any and all possi-
ble theories of victory, in the possible event that the opposing
party will raise a completely new argument in its answering
brief.

Second, the majority uses the waiver doctrine as both a
sword and a shield. Immediately after holding that Plaintiff
waived this argument, maj. op. at 2776-77, the majority
excuses Defendants from having failed to raise a “doctrine of
indivisibility” argument, on the ground that Plaintiff waived
the waiver, id. at 2777. It is unclear to me why similar reason-
ing does not apply to the majority’s theory of the case,
because the majority adopts a theory advanced by neither
party on appeal. That is, an argument advanced before the dis-
trict court and on appeal is ignored, while a wholly new the-
ory advanced by neither party prevails.

Third, as a matter of discretion, I would reach the Harvey
Films chain of title. The basic question raised by this appeal
is the ownership of the copyright. I see nothing to be gained,
and no unfair advantage to be conferred, by resolving this
issue to the present day, rather than arbitrarily stopping our
analysis as of the 1950s.
3
The background rule is that we may affirm the district court on any
ground supported by the record. Quan v. Computer Scis. Corp., 623 F.3d
870, 878 (9th Cir. 2010). Accordingly, when the appellant argues that the
district court erred at a particular step in the analysis, the appellant reason-
ably may rely on the district court’s rulings in its favor on the other steps
in the analysis. If the appellee then asserts that the district court erred at
one of those steps, the appellant is free to respond that it wins even under
the theory advanced by the appellee. A contrary rule would lead, as noted
in text, to formalistic and repetitive briefing by the appellant.
 FLEISCHER STUDIOS v. A.V.E.L.A., INC. 2787
Finally, if we are to adhere strictly to the doctrine of
waiver, then I would address only the issues raised by the par-
ties. Plaintiff argues that the district court erred in its analysis
of the UM&M chain of title. I agree. Defendants argue that
the copyright transferred to no one. I, as does the majority,
disagree. If we were to address only the parties’ arguments,
we would stop there. I would not reach the line of reasoning
invented by the majority.

In conclusion, the majority adopts a theory rejected by the
district court and advanced by neither party on appeal. Worse
still, the majority answers only half of the issue, by failing to
explain what happened to the copyright after it transferred to
Harvey Films in the 1950s.

D. Conclusion

If the copyright transferred to UM&M, as the district court
held, then Plaintiff prevails because UM&M sold the copy-
right to Plaintiff. If the copyright transferred to Harvey Films,
as the majority holds, then Plaintiff prevails because Harvey
Films sold the copyright to Plaintiff. There is no support for
the novel argument advanced by Defendants that the copy-
right transferred neither to UM&M nor to Harvey Films.
Accordingly, I would reverse the district court’s grant of sum-
mary judgment to Defendants on the copyright claim.4

4
Because of the potential interplay between the doctrines, the district
court ruled on the trademark claims only after it had rejected Plaintiff’s
copyright claim. In light of the district court’s errors concerning the copy-
right claim, I would vacate the district court’s trademark decision and
remand for reconsideration, if necessary, in light of the correct copyright
analysis.