Halicki Films, LLC. v. Carroll Shelby International, Inc.

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

HALICKI FILMS, LLC; ORIGINAL 
GONE IN 60 SECONDS, LLC,
Plaintiffs-Appellants,
DENICE SHAKARIAN HALICKI,
Plaintiff-counter-defendant-
Appellant,
v. Nos. 06-55806
SANDERSON SALES AND MARKETING, 06-55807
Defendant,  D.C. No.
CARROLL SHELBY INTERNATIONAL, CV-04-08813-SJO
INC.; CARROLL SHELBY; CARROLL OPINION
SHELBY LICENSING, INC.; CARROLL
SHELBY ENGINEERING, INC.;
CARROLL SHELBY MOTORS, INC.;
CARROLL SHELBY DISTRIBUTION
INTERNATIONAL, INC.; CARROLL
HALL SHELBY TRUST,
Defendants-counter-claimants,


15303
15304 HALICKI FILMS v. CARROLL SHELBY INT.

and 
UNIQUE MOTORCARS, INC.,
Defendant-Appellee, 
UNIQUE PERFORMANCE, INC.,
Defendant-Appellee.

Appeal from the United States District Court
for the Central District of California
S. James Otero, District Judge, Presiding

Argued and Submitted
August 4, 2008—Pasadena, California

Filed November 12, 2008

Before: Stephen Reinhardt, Roger J. Miner,* and
Marsha S. Berzon, Circuit Judges.

Opinion by Judge Miner

*The Honorable Roger J. Miner, Senior United States Circuit Judge for
the Second Circuit, sitting by designation.
15310 HALICKI FILMS v. CARROLL SHELBY INT.

COUNSEL

Jens B. Koepke and Timothy T. Coates, Greines, Martin,
Stein & Richland LLP, Los Angeles, California, for the appel-
lants.

Robert F. Helfing, Sedgwick, Detert, Moran, & Arnold LLP,
Los Angeles, California, for the appellees and the
appellees/counter-claimants.

OPINION

MINER, Circuit Judge:

Plaintiffs, Denice Shakarian Halicki, Original Gone in 60
Seconds, LLC, and Halicki Films, LLC (collectively, the
“Plaintiffs” or “Halicki”), appeal from so much of a Novem-
ber 14, 2005 summary judgment of the United States District
Court for the Central District of California as granted defen-
dants’ — Unique Motorcars, Inc. and Unique Performance,
Inc. (collectively, the “Unique Defendants”); and Carroll
Shelby International, Inc., Carroll Shelby Licensing, Inc.,
Carroll Shelby Motors, Inc., Carroll Shelby Distribution,
International, Inc., and Carroll Shelby Hall Trust (collec-
 HALICKI FILMS v. CARROLL SHELBY INT. 15311
tively, the “Shelby Defendants” and collectively with the
Unique Defendants, the “Defendants”) — motion for sum-
mary judgment dismissing Plaintiffs’ claims for: (1) copyright
infringement; (2) common law trademark infringement; (3)
federal unfair competition; and (4) declaratory relief. The Dis-
trict Court found that Plaintiffs lacked standing to assert the
foregoing claims. For the reasons that follow, we hold that the
District Court erred in (1) its refusal to use extrinsic evidence
submitted by Plaintiffs to aid in its interpretation of an agree-
ment between the parties, finding that the extrinsic evidence
did not show that the agreement was reasonably susceptible
to Plaintiffs’ interpretation; (2) its interpretation of disputed
language in an agreement between Halicki and a corporation,
not a party to this action; (3) its application of the wrong legal
standard in concluding that Plaintiffs did not have statutory
standing to assert their claims for trademark infringement and
unfair competition; and (4) its conclusion that Plaintiffs did
not have statutory or Article III standing to assert their claims
for declaratory relief. We therefore vacate the District Court’s
grant of summary judgment dismissing Plaintiffs’ copyright,
common law trademark infringement, unfair competition, and
declaratory relief claims and remand the case for further pro-
ceedings.

The Shelby Defendants appeal from the District Court’s
denial of their motion for attorneys’ fees under both the Copy-
right Act, 17 U.S.C. § 505, and the Lanham Act, 15 U.S.C.
§ 1117(a). Because none of Halicki’s claims are frivolous or
unreasonable, we affirm the District Court’s conclusion that
the Shelby Defendants are not entitled to attorneys’ fees.

I. Background

In 1974, H.B. “Toby” Halicki directed, produced, acted in,
and marketed the original motion picture Gone in 60 Seconds
(the “Original GSS”). Toby Halicki registered a copyright for
the Original GSS. The Original GSS featured “Eleanor,” a
yellow 1971 Fastback Ford Mustang, customized to appear as
15312 HALICKI FILMS v. CARROLL SHELBY INT.
a Mach 1 Fastback Mustang. Several years after Toby Hal-
icki’s death, plaintiff Denice Halicki, Toby Halicki’s widow,
obtained ownership of the 1971 Ford Fastback Mustang used
to portray Eleanor and “all right, title and interest, including
copyrights, of the film ‘Gone in 60 Seconds’ which were
owned by [Toby Halicki] . . . .” See Halicki v. Carroll Shelby
Int’l, Inc., No. CV-04-8813, 2005 WL 5253338, at *1 (C.D.
Cal. Nov. 14, 2005). Halicki then began marketing the Origi-
nal GSS on DVD and VHS. She set up a “Gone in 60 Sec-
onds” website; sold “Gone in 60 Seconds” branded baseball
caps; licensed the “Eleanor” name and likeness for a line of
toy cars; and exhibited “Eleanor” from the Original GSS (the
“Original Eleanor”) at car shows. Id.

On May 17, 1995, Halicki entered into an agreement (the
“Agreement”) with Hollywood Pictures (“HPC” or “HPC/
Disney”), a division of the Walt Disney Company (“Disney”).
Under the terms of the Agreement, HPC acquired an option
to purchase the rights to produce a remake of the Original GSS.1
Pursuant to the introductory paragraph of the Agreement,
HPC

acquire[d] all sequel, remake and allied, ancillary
and subsidiary rights therein of every nature and
description in and to the [Original GSS] and any and
all underlying rights thereto (collectively, the “Prop-
erty,” provided that “Property” shall not include the
rights reserved to [Halicki] pursuant to Paragraph
5[ ], below) in connection with possible motion pic-
tures . . . to be based in whole or in part upon the
property.

Thus, “Property” was defined as the Original GSS along with
the underlying rights to the Original GSS. The Agreement
assigned to HPC “all right, title and interest in the sequel and
1
HPC exercised its option on October 12, 1995, thereby acquiring the
rights set forth in the Agreement.
 HALICKI FILMS v. CARROLL SHELBY INT. 15313
remake rights in the Property.” Paragraph 4 of the Agreement
set forth the “rights granted” to HPC. Paragraph 5 of the
Agreement set forth the rights reserved to Halicki. Under
Paragraph 5(a), Halicki reserved the right to continue to dis-
tribute and exhibit the Original GSS, and under Paragraph
5(b), Halicki reserved the “right to manufacture, sell and dis-
tribute merchandise utilizing the car known as ‘Eleanor’ from
the Original [GSS].”

On September 19, 2000, Halicki assigned to Original Gone
in 60 Seconds, LLC the exclusive right to copy, distribute,
exhibit, market, advertise, derive revenues from, turn to
account, perform, and otherwise exploit all distribution rights
of Halicki to the Original GSS. See Halicki, 2005 WL
5253338, at *2. On May 11, 2001, Halicki formed the Denice
Shakarian Halicki Trust and assigned to it all of her right,
title, and interest in all of her property. Id.

In 2000, Disney released the remake of Gone in 60 Seconds
(the “Remake GSS”). The Remake GSS also featured a car
named Eleanor (the “Remake Eleanor”), but the Remake
Eleanor was referred to in the film as (and was customized to
appear as) a 1967 Shelby GT-500, a variant of the Ford Mus-
tang developed by defendant Carroll Shelby with the Ford
Motor Company. Shelby had secured a United States registra-
tion for “GT-500” in 1988. Soon after the release of the
Remake GSS, Halicki exhibited Original Eleanor at car
shows. Halicki met Carroll Shelby at one of these shows. On
September 28, 2001, defendant Carroll Hall Shelby Trust
applied for registration of the trademark “Eleanor” for model
cars, Halicki, 2005 WL 5253338, at *2, but the registration
has not yet issued. Then on August 30, 2002, the Carroll Hall
Shelby Trust applied for registration of the trademark “Elea-
nor” for automobiles and structural parts of automobiles. The
Carroll Hall Shelby Trust is the registered owner of the “Elea-
nor” trademark for automobiles and structural parts of auto-
mobiles. On September 10, 2002, Carroll Shelby and
defendant Unique Motorcars, Inc. entered into a License
15314 HALICKI FILMS v. CARROLL SHELBY INT.
Agreement whereby Shelby authorized Unique Motorcars,
Inc. to use the trademarks “Shelby GT-500” and “Eleanor” in
connection with the manufacture and sale of vehicles and
merchandise relating to any 1960s Shelby automobiles or
variants thereof. Unique Motorcars, Inc. then began to manu-
facture, produce, and sell vehicles resembling the 1967
Shelby GT-500 “Eleanor” character that appeared in the
Remake GSS. Halicki, 2005 WL 5253338, at *2.

On May 11, 2004, Halicki received a registration for the
mark “Gone in 60 Seconds” for baseball caps. On October 25,
2004, Halicki filed a complaint against the Defendants based
on alleged unauthorized creation of “replicas of Eleanor from
‘Gone in 60 Seconds,’ ” and improper reference to, and/or use
of the terms “Eleanor” and “Gone in 60 Seconds” in the mar-
keting of the automobiles manufactured and sold by Unique
Motorcars, Inc. Halicki, 2005 WL 5253338, at *2. On May
20, 2005, Halicki filed a Second Amended Complaint against
the Unique Defendants, the Shelby Defendants, and various
other defendants stating claims for: (1) copyright infringe-
ment; (2) common law trademark infringement; (3) federal
unfair competition/false advertising, in violation of 15 U.S.C.
§ 1125 et seq.; (4) statutory unfair competition, in violation of
CAL. BUS. & PROF. CODE § 17200 et seq.; (5) intentional inter-
ference with prospective economic advantage; (6) negligent
interference with prospective economic advantage; (7) con-
structive trust/accounting; (8) declaratory relief pursuant to 15
U.S.C. § 1119, in the form of an order from the District Court
instructing the United States Patent and Trademark Office to
cancel the Carroll Hall Shelby Trust’s registration of the “El-
eanor” mark; and (9) declaratory relief in the form of a judg-
ment declaring that Defendants do not have a right in the
“Eleanor” or “Gone in 60 Seconds” marks by virtue of the
registration of the “GT-500” mark. On March 22, 2005, Plain-
tiffs received registrations for the mark “Gone in 60 Seconds”
for toy model cars and toy model kits. Then, on May 27,
2005, Plaintiffs applied to register the “Eleanor” mark for var-
 HALICKI FILMS v. CARROLL SHELBY INT. 15315
ious purposes, including cars and car parts. Halicki, 2005 WL
5253338, at *3.

The District Court granted the Defendants’ motion for sum-
mary judgment, finding, inter alia, that Halicki lacked stand-
ing to bring her claims for copyright infringement, trademark
infringement, unfair competition, and declaratory relief
because she had no rights in Remake Eleanor, having trans-
ferred those rights pursuant to the Agreement.

On November 28, 2005, Halicki filed a motion seeking
reconsideration of the District Court’s summary judgment,
arguing that the District Court committed reversible error by
failing to consider extrinsic evidence — declarations of Hal-
icki and of two of her attorneys, Eric Weissmann and Kirk M.
Hallam — supporting her interpretation of the Agreement. On
January 5, 2006, Halicki submitted, in further support of her
motion for reconsideration, an “Acknowledgment and Agree-
ment” executed by her and by HPC in which HPC stated that
it was its intent to reserve to Halicki the rights to Remake
Eleanor. The Acknowledgment and Agreement accompanied
a declaration of attorney Jeffrey S. Kravitz stating that Hal-
icki’s attorneys had been seeking for nine months to memori-
alize the intent of the parties at the time of the 1995
Agreement, but that HPC/Disney only agreed to enter into the
Acknowledgment and Agreement in light of the November
14, 2005 summary judgment. The District Court denied Hal-
icki’s motion to reconsider, stating that it had considered the
Hallam and Weissmann declarations that Halicki claimed the
court had ignored. The court made no mention of the Halicki
declaration, the Kravitz declaration, or the Acknowledgment
and Agreement.

On November 29, 2005, the Shelby Defendants filed a
motion seeking attorneys’ fees, arguing that they were entitled
to such fees under 17 U.S.C. § 505 (allowing the prevailing
party on a copyright infringement claim to receive attorneys
fees as part of costs), and 15 U.S.C. § 1117(a) (providing that
15316 HALICKI FILMS v. CARROLL SHELBY INT.
“[t]he court in exceptional cases may award reasonable attor-
ney fees to the prevailing party” on a trademark infringement
claim). On April 27, 2006, the District Court denied the
Shelby Defendants’ claim for attorneys’ fees under §§ 505
and 1117, finding that Halicki’s claims were not frivolous or
unreasonable.

The timely appeal of Halicki’s claims and the Shelby
Defendants’ subsequent claims for attorneys’ fees followed.

II. Standard of Review

This Court reviews de novo a district court’s grant of sum-
mary judgment. Levine v. City of Alameda, 525 F.3d 903, 905
(9th Cir. 2008). “We view the evidence in the light most
favorable to the nonmoving party and determine whether
there are any genuine issues of material fact and whether the
district court correctly applied the substantive law.” Id. (citing
Chevron USA, Inc. v. Cayetano, 224 F.3d 1030, 1037 (9th
Cir. 2000)).

Decisions by a district court awarding or denying attorneys’
fees under the Copyright Act and under the Lanham Act are
reviewed for abuse of discretion. Stephen W. Boney, Inc. v.
Boney Services, Inc.,127 F.3d 821, 825 (9th Cir. 1997).

III. Discussion

A. Halicki Reserved the Merchandising Rights to Remake
Eleanor

“Under copyright law, only copyright owners and exclusive
licensees of copyright may enforce a copyright or a license.”
Sybersound Records, Inc. v. UAV Corp., 517 F.3d 1137, 1144
(9th Cir. 2008) (citing 17 U.S.C. § 501(b)) (conferring stand-
ing only to the “legal or beneficial owner of an exclusive right
who is entitled . . . to institute an action for any infringement
 HALICKI FILMS v. CARROLL SHELBY INT. 15317
. . . while he or she is the owner of it” (internal quotation
marks omitted)).

Halicki’s primary argument is that Paragraph 5(b) of the
Agreement, which grants her the “right to manufacture, sell
and distribute merchandise utilizing the car known as ‘Elea-
nor’ from the Original [GSS],” should be read to grant her
rights to manufacture, sell, and distribute merchandise utiliz-
ing the Remake Eleanor as well as the Original Eleanor. Hal-
icki claims that reading Paragraph 5(b) as reserving her rights
related to the Remake Eleanor is supported by: (1) the lan-
guage in the Agreement itself; (2) extrinsic evidence that the
District Court was required to consider by California law; and
(3) the parties’ conduct subsequent to the release of the
Remake GSS. Because the District Court’s rulings were based
in large part on a contrary interpretation of the Agreement —
that, pursuant to the Agreement, Halicki transferred her rights
to Remake Eleanor and therefore lacks standing to assert her
claims — the interpretation of Paragraph 5(b) of the Agree-
ment is the core issue in this case.

The meaning of Paragraph 5(b) must be determined by
reading it in the context of the entire Agreement. Moreover,
the extrinsic evidence presented by Halicki must be consid-
ered in aid of the interpretation of the contract. Reading Para-
graph 5(b) in its context, and examining the extrinsic
evidence, we conclude that the District Court erred in its
interpretation of Paragraph 5(b) of the Agreement. We agree
with Halicki that Paragraph 5(b) reserves to her the merchan-
dising rights to Remake Eleanor.

1. The Agreement

Halicki claims that the plain language of the Agreement
supports reservation of her rights to the Remake Eleanor.
After examining Halicki’s arguments with respect to the lan-
guage in the Agreement itself, we conclude that the Agree-
ment is “reasonably susceptible to the interpretation” she
15318 HALICKI FILMS v. CARROLL SHELBY INT.
urges. ASP Properties Group v. Fard, Inc., 35 Cal. Rptr. 3d
343, 350 (Cal. Ct. App. 2005). At the same time, the Agree-
ment’s language does not command Halicki’s interpretation.
As a result of this ambiguity, we may properly examine
extrinsic evidence to determine a definitive interpretation. See
id. We consider the Agreement’s language in this section, and
the extrinsic evidence in the ensuing section. See Part III.A.2,
infra.

First, Halicki argues that Paragraph 5(b) speaks of “the car
known as ‘Eleanor’ from the Original [GSS]” (emphasis sup-
plied by Halicki). We agree that the use of the word “from”
lends weight to Halicki’s proposed interpretation of Paragraph
5(b). Indeed “from” can be defined as “a function word to
indicate the source or original or moving force of something:
as . . . the source, cause, means, or ultimate agent of an action
or condition.” WEBSTER’S THIRD NEW INTERNATIONAL
DICTIONARY 913 (1981). This implies that “Eleanor” in
another setting — such as a sequel or a remake of GSS — is
still “Eleanor from the Original” GSS and is therefore encom-
passed by Paragraph 5(b).

Halicki next asserts that while Paragraph 5(a) speaks of
rights to continue to distribute and exhibit the Original GSS,
Paragraph 5(b) speaks of the right to “manufacture, sell and
distribute,” not to continue to do so; if Paragraph 5(b) was
meant to refer only to the Original Eleanor, Halicki contends,
it would have granted a right to “continue to manufacture, sell
and distribute” merchandise depicting the character Eleanor.
We agree that the description of the reserved rights in Para-
graph 5(a) as the “right to continue” to distribute and exhibit
Original GSS — as opposed to the right in Paragraph 5(b) to
“manufacture, sell, and distribute” merchandise related to
Original Eleanor — lends support to Halicki’s proposed inter-
pretation of Paragraph 5(b).

Halicki next urges us to examine the interaction between
Paragraphs 4 and 5(b). Under Paragraph 4, Halicki granted to
HPC
 HALICKI FILMS v. CARROLL SHELBY INT. 15319
all right, title, and interest of every kind and nature
. . . to sequels to and/or remakes of the Property,
including without limitation the following:

....

j. The right to manufacture, sell, furnish, supply
and distribute products, by-products, services, facili-
ties, merchandise and commodities of every nature
and description . . . which make reference to or are
based upon or adopted from the Property . . ., includ-
ing, . . . the characters, subject to Paragraph 5.b.

Paragraph 5(b) reserves to Halicki “[t]he right to manufacture,
sell and distribute merchandise utilizing the car known as
‘Eleanor’ from the Original [GSS].” We agree with Halicki
that these two provisions, when read together, are at least
capable of supporting her proposed interpretation of the
Agreement, even if they do not command it. According to
Halicki, Paragraph 4(j) provided HPC with merchandising
rights only for products related to a remake of or sequel to the
original film. This reading is consistent with the language
from Paragraph 4’s introductory paragraph which grants HPC
the rights only to “sequels to and/or remakes of the Property.”2
If we accept Halicki’s view that Paragraph 4 granted HPC
merchandising rights only to Remake GSS, then Paragraph
5(b) would be completely superfluous unless, as Halicki sug-
gests, it was intended to reserve her rights to produce mer-
chandise related to Remake Eleanor. After all, if Halicki
retained all of the merchandising rights to the Original GSS,
2
On the other hand, Paragraph 4(j)’s grant to HPC of the merchandising
rights to any products “which make reference to or are based upon or
adopted from the Property” could be read, as the Defendants suggest, to
grant HPC the merchandising rights even to products related to the Origi-
nal GSS. The central issue at this point, however, is whether the contract
is at least “reasonably susceptible to the interpretation urged by” Halicki.
See ASP Properties Group, 35 Cal. Rptr. 3d at 350. We conclude that it
is.
15320 HALICKI FILMS v. CARROLL SHELBY INT.
there would be no reason for her to protect specifically her
right to “manufacture, sell and distribute merchandise utiliz-
ing” the Original Eleanor in Paragraph 5(b). Because we con-
clude that the introductory portion of Paragraph 4 renders
Halicki’s interpretation of the rights granted in Paragraph 4(j)
reasonable, the inclusion of Paragraph 5(b) in the contract
supports Halicki’s argument that she and HPC intended that
she retain the rights to Remake Eleanor.

In a related argument, Halicki contends that Paragraph 7,
which grants her merchandising royalties in all products sold
by HPC “in connection with Picture or Property, other than
the car from the Original Picture known as ‘Eleanor,’ ” like-
wise supports her interpretation of the Agreement. Again, if
Halicki’s view that the parties intended Paragraph 4 to grant
HPC only the rights to Remake GSS merchandise (and not to
Original GSS or Original Eleanor merchandise) is reasonable
— and we hold that it is — there would be no need to refer-
ence “the car from the Original Picture known as ‘Eleanor’ ”
in Paragraph 7 unless that language referred to Remake Elea-
nor. Thus, Paragraph 7, read in light of Halicki’s reasonable
interpretation of Paragraph 4, also supports the interpretation
of the contract which would reserve to Halicki the rights to
Remake Eleanor.

[1] Accordingly, the plain language of the Agreement per-
mits an interpretation of Paragraph 5(b) as reserving Halicki’s
merchandising rights in Remake Eleanor as well as Original
Eleanor.

2. The Extrinsic Evidence

In her opposition to the Defendants’ motion for summary
judgment, Halicki submitted declarations of two of her attor-
neys, Kirk M. Hallam and Eric Weissmann, each of whom
had participated in the negotiations leading up to the Agree-
ment. Each declarant stated that (1) Halicki and her attorneys
made it clear to HPC/Disney that she was to retain all rights
 HALICKI FILMS v. CARROLL SHELBY INT. 15321
to Eleanor in the Remake as well as the Original GSS; and (2)
HPC/Disney accepted that term and intended the Agreement
to reflect the reservation of Halicki’s rights in the character
Eleanor. Moreover, Hallam declared that the drafts of the
Agreement and related notes reflected this understanding. In
her opposition to Defendants’ motion for summary judgment,
Halicki also submitted a declaration stating that she had made
it clear to HPC that her retention of the merchandising rights
to “Eleanor” was a “non-negotiable deal point.”

In her motion to reconsider the District Court’s decision,
Halicki claimed that the District Court did not consider the
Hallam, Weissmann, and Halicki declarations in its summary
judgment. After filing the motion for reconsideration, Halicki
submitted an “Acknowledgment and Agreement” between
HPC and Halicki in further support of her motion, which
stated that “HPC hereby acknowledges that as between it and
Halicki, Halicki retained the merchandising rights to that cer-
tain car called ‘Eleanor’ as such car appears in the Remake
[GSS] . . . .” The Acknowledgment and Agreement accompa-
nied the declaration of attorney Jeffrey S. Kravitz, which
stated that Halicki’s attorneys had been trying for nine months
to secure such an agreement in writing from HPC and had
only been successful once HPC learned of the District Court’s
summary judgment.

On April 12, 2006, the District Court denied Halicki’s
motion to reconsider its summary judgment. The District
Court stated (as memorialized in the civil minutes) that it had
considered the Weissmann and Hallam declarations in decid-
ing the summary judgment motion but that it had determined
that the evidence presented therein did not “yield to a contrac-
tual interpretation to which the [Agreement] is reasonably
susceptible.” The District Court did not mention the Halicki
declaration either in its summary judgment or in its decision
on the motion for reconsideration. The District Court also did
not mention the Acknowledgment and Agreement, which had
been submitted on January 5, 2006.
15322 HALICKI FILMS v. CARROLL SHELBY INT.
[2] Where parties dispute the meaning of contractual lan-
guage, “the first question to be decided is whether the dis-
puted language is ‘reasonably susceptible’ to the
interpretation urged by the party. If it is not, the case is over.”
People ex rel. Lockyer v. R.J. Reynolds Tobacco Co., 132 Cal.
Rptr. 2d 151, 157 (Cal. Ct. App. 2003). When deciding this
question,

the trial court must provisionally receive any prof-
fered extrinsic evidence which is relevant to show
whether the contract is reasonably susceptible of a
particular meaning . . . . [I]t is reversible error for a
trial court to refuse to consider such extrinsic evi-
dence on the basis of the trial court’s own conclusion
that the language of the contract appears to be clear
and unambiguous on its face.

Morey v. Vannucci, 75 Cal. Rptr. 2d 573, 578 (Cal. Ct. App.
1998) (citations omitted). Although extrinsic evidence is gen-
erally prohibited “to vary, alter or add to” terms of a contract,
id. at 578 n.4, “[t]he test of admissibility of extrinsic evidence
to explain the meaning of a written instrument is not whether
it appears to the court to be plain and unambiguous on its
face, but whether the offered evidence is relevant to prove a
meaning to which the language of the instrument is reason-
ably susceptible,” Pacific Gas & Elec. Co., 442 P.2d at 644.
“If in light of the extrinsic evidence the court decides the lan-
guage is reasonably susceptible to the interpretation urged, the
extrinsic evidence is then admitted to aid in . . . interpreting
the contract.” ASP Properties Group, 35 Cal. Rptr. 3d at 350
(internal quotation marks omitted).

[3] In its decision denying Halicki’s motion to reconsider,
the District Court addressed the Hallam and Weissmann dec-
larations, but it did not even mention the Halicki declaration
or the Acknowledgment and Agreement. Lacking any indica-
tion that the court considered these documents although spe-
cifically asked to do so and although mentioning others, we
 HALICKI FILMS v. CARROLL SHELBY INT. 15323
assume it did not consider the documents not mentioned. The
court erred in failing to consider this evidence. These items
supported Halicki’s claim of a non-negotiable demand of all
rights to Eleanor and of HPC’s intended acquiescence in that
demand. The court further erred in concluding that the lan-
guage in the Agreement was not reasonably susceptible to the
interpretation advanced by Halicki in light of the declarations
and the Acknowledgment and Agreement. The court was
required to use the extrinsic evidence to aid in its interpreta-
tion of the contract. See ASP Properties Group, 35 Cal. Rptr.
3d at 350.

[4] Reading the Agreement as a whole along with the
extrinsic evidence, Paragraph 5(b) is reasonably susceptible to
Halicki’s interpretation. Halicki submitted three declarations
— one of her own and two from her attorneys — stating that
the reservation of rights in Eleanor was a non-negotiable term
and that HPC/Disney understood and agreed to this. More-
over, HPC/Disney — which had nothing to gain by doing so
— executed the Acknowledgment and Agreement, making
clear that it was its intention that the rights to Remake Eleanor
be reserved to Halicki. This is not the more usual situation
where parties to an agreement disagree as to the meaning of
its terms. Here, statements by both parties to the Agreement
— the declarations of Halicki and her attorneys and the
Acknowledgment and Agreement executed by HPC/Disney
— demonstrate that each party had the same intention as to
the meaning of Paragraph 5(b).3 Having concluded that the
contract, when read in light of the extrinsic evidence, is sus-
ceptible to Halicki’s interpretation, we must now consider
3
Halicki also argues that the fact that HPC/Disney has not made any
efforts to market Remake Eleanor is further evidence that the merchandis-
ing rights to Remake Eleanor belong to her. Although HPC’s failure to
engage in merchandising Remake Eleanor is consistent with Halicki’s
contention that it intended to reserve to her the merchandising rights for
Remake Eleanor, it is equally consistent with other inferences, such as that
HPC had no interest in selling cars. We therefore do not rely on this con-
sideration.
15324 HALICKI FILMS v. CARROLL SHELBY INT.
whether that interpretation is in fact the correct one. Here, the
extrinsic evidence unequivocally supports Halicki’s interpre-
tation. Accordingly, we can only conclude that Paragraph 5(b)
reserves to Halicki the rights to Remake Eleanor as well as
Original Eleanor.4

B. Whether the Eleanor Character Is Entitled To
Copyright Protection

The Defendants assert on appeal that the Eleanor character
does not qualify for copyright protection.

[5] This Court has stated that where a character “is only the
chessman in the game of telling the story he is not within the
area of the protection afforded by the copyright.” Warner
Bros. Pictures, Inc. v. Columbia Broad. Sys., Inc., 216 F.2d
945, 950 (9th Cir. 1954). Warner Bros. held that a character
could only be granted copyright protection if it “constituted
the story being told.” Id. The Defendants rely on this strict
standard, arguing that Eleanor is not “the story being told” but
is “simply a car.” In deciding that Dashiel Hammet’s “Sam
Spade” character did not qualify for copyright protection,
Warner Bros. reasoned that literary characters are difficult to
delineate and may be based on nothing more than an unpro-
tected idea. Id.; see Walt Disney Prods. v. Air Pirates, 581
F.2d 751, 755 (9th Cir. 1978). Air Pirates, however, distin-
guished cartoon characters from literary characters, reasoning
that comic book characters have “physical as well as concep-
tual qualities, [and are] more likely to contain some unique
elements of expression.” 581 F.2d at 755.
4
Halicki contends that even if she were not a legal owner of the mer-
chandising rights to Remake Eleanor, she could still pursue the copyright
claims either because (1) she is a beneficial owner of the copyright due to
her royalty interest in the Remake GSS or (2) she is the owner of the Orig-
inal Eleanor copyright and Remake Eleanor is a derivative work. We need
not reach either question, as we have concluded that Halicki can assert her
claims as legal owner of the rights to Remake Eleanor and so need not rely
on other bases for doing so.
 HALICKI FILMS v. CARROLL SHELBY INT. 15325
[6] This Court has also recognized copyright protection for
characters that are especially distinctive, see Olson v. Nat’l
Broad. Co., 855 F.2d 1446, 1452 (9th Cir. 1988), and has
noted, consistent with Air Pirates, that copyright protection
“may be afforded to characters visually depicted in a televi-
sion series or a movie,” Olson, 855 F.2d at 1452 (citing
Silverman v. CBS, Inc., 632 F. Supp. 1344, 1355 (S.D.N.Y.
1986)). “Characters that have received copyright protection
have displayed consistent, widely identifiable traits.” Rice v.
Fox Broad. Co., 330 F.3d 1170, 1175 (9th Cir. 2003) (citing
Toho Co., Ltd. v. William Morrow & Co., Inc., 33 F. Supp. 2d
1206, 1215-16 (C.D. Cal. 1998) (recognizing copyright pro-
tection for Godzilla)); Metro-Goldwyn-Mayer, Inc. v. Am.
Honda Motor Corp., 900 F. Supp. 1287, 1296-97 (C.D. Cal.
1995) (recognizing copyright protection for James Bond);
Anderson v. Stallone, No. 87-0592, 1989 WL 206431, *7
(C.D. Cal. Apr. 25, 1989) (recognizing copyright protection
for Rocky Balboa). The Defendants argue that, to the extent
Eleanor can be regarded as a character, it is not sufficiently
distinctive and therefore not deserving of copyright protec-
tion.

The District Court did not directly examine the question of
whether Eleanor is a character deserving of copyright protec-
tion. The court therefore never addressed the question of what
the appropriate standard is for making such a determination.
In examining the question whether Remake Eleanor was a
derivative of Original Eleanor, however, the District Court
implied that Eleanor is deserving of copyright protection —
the court stated that, “[i]f the Remake Eleanor is deemed a
derivative work of the Original Eleanor, Plaintiffs, as the
author of the Original Eleanor, would also have the exclusive
right to the Remake Eleanor.” Halicki, 2005 WL 5253338, at
*4 (citing 17 U.S.C. § 103(a)).

[7] The Eleanor character can be seen as more akin to a
comic book character than a literary character. Moreover,
Eleanor “display[s] consistent, widely identifiable traits,” see
15326 HALICKI FILMS v. CARROLL SHELBY INT.
Rice, 330 F.3d at 1175, and is “especially distinctive,” see
Olson, 855 F.2d at 1452. In both films, the thefts of the other
cars go largely as planned, but whenever the main human
character tries to steal Eleanor, circumstances invariably
become complicated. In the Original GSS, the main character
says “I’m getting tired of stealing this Eleanor car.” And in
the Remake GSS, the main character refers to his history with
Eleanor. Nevertheless, this fact-intensive issue must be
remanded to the District Court for a finding in the first
instance as to whether Eleanor is entitled to copyright protec-
tion. On remand the court should examine whether Eleanor’s
“physical as well as conceptual qualities [and] . . . unique ele-
ments of expression” qualify Eleanor for copyright protection.
See Air Pirates, 581 F.2d at 755.

C. Halicki’s Trademark Claims

The District Court held that Halicki lacked standing to sue
for common law infringement of either the “Eleanor” or
“Gone in 60 Seconds” trademarks. We cannot agree. With
respect to the “Eleanor” mark, the District Court’s failure to
evaluate Halicki’s contentions that she acquired an ownership
interest in the mark through prior use and that she had a cog-
nizable commercial interest in the mark renders the court’s
standing analysis fatally incomplete. We therefore reverse the
District Court’s decision and remand for further consider-
ation. We likewise reverse the District Court’s ruling that Hal-
icki lacked standing to sue for infringement of the “Gone in
60 Seconds” mark. As the court acknowledged, Halicki is the
registered owner of the “Gone in 60 Seconds” mark for two
product classes, “toy model cars and toy model car kits” and
“baseball caps.” A valid ownership interest in a mark (for any
product class) is sufficient, although not necessary, to provide
standing to sue for infringement of that mark. See 15 U.S.C.
§§ 1114(1), 1125(a). We therefore hold that Halicki has
standing to sue for infringement of the “Gone in 60 Seconds”
mark.
 HALICKI FILMS v. CARROLL SHELBY INT. 15327
1. Standing Requirements For a Trademark
Infringement Claim

To establish standing to sue for trademark infringement
under the Lanham Act, a plaintiff must show that he or she
is either (1) the owner of a federal mark registration, (2) the
owner of an unregistered mark, or (3) a nonowner with a cog-
nizable interest in the allegedly infringed trademark.5 See 15
U.S.C. §§ 1114(1), 1125(a); 5 J. Thomas McCarthy, McCar-
thy on Trademarks and Unfair Competition §§ 27:20-21, 32:3,
32:12 (4th ed. 2008) (noting that standing to sue for trade-
mark infringement under the Lanham Act extends to owners
of registered and unregistered marks, and nonowners with a
protectable interest in the mark); see also Nat’l Licensing
Ass’n, LLC v. Inland Joseph Fruit Co., 361 F. Supp. 2d 1244,
1256 (E.D. Wash. 2004) (“[T]o maintain a [claim under
§ 1125(a)], the plaintiff must show that it has a commercial
interest in the allegedly misused mark that is ‘likely to be
damaged.’ ” (citing Waits v. Frito-Lay, Inc., 978 F.2d 1093,
1109 (9th Cir. 1992))).

2. The “Eleanor” Mark

The District Court found that Halicki lacked standing to
bring her trademark claims based on the “Eleanor” mark
solely because she had not proffered evidence that she was the
registered owner of the mark. In addition, the court noted that
5
The District Court asserted that “Plaintiffs concede that the common
law [of trademark infringement] and the Lanham Act standing require-
ments are similar.” Halicki, 2005 WL 5253338, at *10. Halicki does not
contest the District Court’s characterization of her position and, in fact,
repeatedly argues that she has “standing under the Lanham Act.” We
therefore assume, as did the District Court, that the Lanham Act’s standing
requirements apply to Halicki’s common law infringement claims. Cf.
Donchez v. Coors Brewing Co., 392 F.3d 1211, 1219 (10th Cir. 2004)
(noting that “[t]he elements of common law trademark or service mark
infringement are similar to those required to prove unfair competition
under § 43(a) of the Lanham Act”).
15328 HALICKI FILMS v. CARROLL SHELBY INT.
the Defendant Carroll Hall Shelby Trust had produced evi-
dence that it was the registered owner of the mark for “vehi-
cles, namely, automobiles, engines for automobiles, and
structural parts of automobiles.” Halicki, 2005 WL 5253338,
at *11.

The District Court’s analysis suffers from a fundamental
flaw. Halicki does not argue that she has standing to sue for
infringement of the “Eleanor” mark as a registered owner of
the mark. Rather, Halicki asserts standing on other grounds.

[8] First, she maintains that she has acquired ownership of
the “Eleanor” trademark through prior use. In other words,
Halicki is asserting her rights as the owner of an unregistered
trademark. “It is axiomatic in trademark law that the standard
test of ownership is priority of use. . . . [I]t is not enough to
have invented the mark first or even to have registered it first;
the party claiming ownership must have been the first to actu-
ally use the mark in the sale of goods or services.” Sengoku
Works Ltd. v. RMC Int’l, Ltd., 96 F.3d 1217, 1219 (9th Cir.
1996). Accordingly, ownership of an unregistered trademark,
like ownership of a registered mark, is sufficient to establish
standing under the Lanham Act. See MCCARTHY, TRADEMARKS
AND UNFAIR COMPETITION, supra, at § 32:3.

[9] Whether Halicki has acquired ownership of the “Elea-
nor” mark through prior use in commerce is a fact-intensive
inquiry that requires the District Court to evaluate “the totality
of the circumstances” of Halicki’s case.6 See Chance v. Pac-
Tel Teletrac Inc., 242 F.3d 1151, 1159 (9th Cir. 2001) (pro-
viding a non-exclusive list of five factors for the district court
6
In support of her prior use argument, Halicki alleges that she (1)
licenses the Original GSS for use on DVDs and VHS tapes with “Eleanor”
on the package, (2) licensed the “Eleanor” name and likeness for a line of
toy cars, and (3) exhibited the Original Eleanor at auto shows. She also
asserts that Toby Halicki sold “Eleanor”-related merchandise, such as t-
shirts, before his death.
 HALICKI FILMS v. CARROLL SHELBY INT. 15329
to consider). In this case, the District Court failed even to
acknowledge Halicki’s prior use arguments, let alone evaluate
whether her activities were sufficient to establish ownership
of the “Eleanor” mark. We therefore reverse the District
Court’s finding that Halicki lacks standing to assert a trade-
mark infringement claim based on the “Eleanor” mark and
remand for a determination of whether her prior actions were
sufficient to establish ownership of the mark. If so, Halicki
has standing to bring an infringement claim.7

Halicki further asserts that, in the event the District Court
concludes that she did not acquire ownership of the “Eleanor”
mark through prior use, she nonetheless has standing because
her royalty interest in the sale of Remake GSS products pro-
vides her with a commercial interest in the “Eleanor” mark.
She makes this argument on the assumption that we have not
reversed the District Court’s finding that she does not own the
merchandising rights to the Remake Eleanor. Because we
have reversed that finding, however, Halicki’s argument must
now be that her ownership interest in the merchandising rights
to the Remake Eleanor provides her with a cognizable com-
mercial interest in the Eleanor mark. In other words, Halicki
also believes she qualifies under the third possible basis for
7
The District Court may have found it unnecessary to explore Halicki’s
prior-use arguments because it also concluded that Halicki had assigned
to HPC any rights that she owned to Remake Eleanor and therefore lacked
standing under the Lanham Act to bring a lawsuit related to the use of the
“Eleanor” mark in Remake Eleanor products. Halicki, 2005 WL 5253338,
at *12. This conclusion is incorrect for two reasons. First, as we have
explained, Halicki reserved her merchandising rights to Remake Eleanor
in the Agreement and did not assign them to HPC. Second, even if she had
assigned her rights to the “Eleanor” mark, she might nonetheless have
standing to sue for infringement of the mark. Ownership of a mark is suffi-
cient but not required to establish standing under the Lanham Act. So long
as Halicki retained a cognizable interest in the use of the “Eleanor” mark
— an issue we need not decide at this time — she would have standing
under the Lanham Act even as a non-owner. The District Court’s failure
to evaluate whether Halicki retained a cognizable interest renders its con-
clusion incomplete.
15330 HALICKI FILMS v. CARROLL SHELBY INT.
Lanham Act standing, as a non-owner with a cognizable com-
mercial interest in the allegedly infringed mark.

[10] The District Court did not reach Halicki’s non-
trademark owner standing argument. If the District Court
determines on remand that Halicki has not established owner-
ship of the “Eleanor” mark through prior use — and therefore
does not have standing on that basis — the court must then
consider Halicki’s argument that she is a non-owner with a
“commercial interest in the allegedly misused mark that is
likely to be damaged.” See Nat’l Licensing Ass’n, LLC, 361
F. Supp. 2d at 1256-57; MCCARTHY, TRADEMARKS AND UNFAIR
COMPETITION, supra, at § 32:12.

3. The “Gone in 60 Seconds” Mark

[11] With respect to the “Gone in 60 Seconds” mark, the
court found that Halicki lacked standing because Halicki’s
registered marks for “Gone in 60 Seconds” are for toy model
cars, toy model car kits, and baseball caps, whereas the
Defendants only manufacture, produce, and sell restored vehi-
cles fitted and detailed to replicate the 1960s Shelby GT-500
and GT-350 automobiles — i.e., actual cars. Halicki, 2005
WL 5253338, at *11 (“Because Plaintiffs are not the regis-
tered owner of ‘Gone in 60 Seconds’ for vehicles or automo-
biles, Plaintiffs may not claim standing in this instance as a
registrant.”). This conclusion confuses an analysis of the mer-
its of Halicki’s infringement claim with an analysis of
whether she has standing to bring those claims. To establish
standing under the Lanham Act, a plaintiff need only demon-
strate that she is the registered owner of a mark for any class
of products, even one that does not compete directly with the
defendant’s products. See 15 U.S.C. § 1114. The question of
whether the products on which the allegedly infringing mark
appears are sufficiently related to goods sold by the plaintiff
such that the defendant’s actions qualify as infringement is,
by contrast, a merits question. See Perfumebay.com Inc. v.
EBAY, Inc., 506 F.3d 1165, 1173 (9th Cir. 2007) (noting that
 HALICKI FILMS v. CARROLL SHELBY INT. 15331
the degree of “relatedness” between the defendant’s and the
plaintiff’s products is one factor that a district court should
consider when evaluating whether the defendant has infringed
on plaintiff’s mark). In this case, it is undisputed that Halicki
is a registered owner of the “Gone in 60 Seconds” mark for
“toy model cars and toy model car kits” and “baseball caps.”
She therefore has standing under the Lanham Act to bring an
infringement claim against others allegedly using the mark in
a proscribed manner.

[12] Although we do not reach the merits of Halicki’s “El-
eanor” or “Gone in 60 Seconds” trademark infringement
claims, we note that the defendants’ use of those marks on
products — i.e., automobiles and automobile parts — that do
not directly compete with products sold with Halicki’s mark
— i.e., toy cars, toy model car kits, baseball caps, and t-shirts
— is not dispositive of the merits of Halicki’s claim. See
MCCARTHY, TRADEMARKS AND UNFAIR COMPETITION, supra, at
§ 24:2 (“Occasionally, a modern court will fall into the error
of thinking that there must be competition between the parties
for trademark infringement to occur.”); see, e.g., Hallmark
Cards, Inc. v. Hallmark Dodge, Inc., 634 F. Supp. 990 (W.D.
Mo. 1986) (automobile dealer’s use of the name “Hallmark
Dodge” infringed on trademark owned by greeting card com-
pany); Triangle Publ’ns, Inc. v. Standard Plastic Products,
Inc., 241 F. Supp. 613 (E.D. Pa. 1965) (producer of “MISS
SEVENTEEN” luggage found to have infringed “SEVEN-
TEEN” trademark registered to magazine publisher); see also
MCCARTHY, TRADEMARKS AND UNFAIR COMPETITION, supra, at
§ 24:61 (providing extensive list of successful infringement
claims brought by registered trademark owners against pro-
ducers of non-competing goods). As the Tenth Circuit
recently explained,

[The] basic premise — that a trademark provides
protection only when the defendant uses the mark on
directly competing goods — is no longer good law.
15332 HALICKI FILMS v. CARROLL SHELBY INT.
Although this notion survived into the early 1900s,
it has long since been superceded.

Team Tires Plus, Ltd. v. Tires Plus, Inc., 394 F.3d 831,
833-35 (10th Cir. 2005). The core question in non-
competitive goods cases, as in most trademark infringement
cases, is “whether customers are likely to be confused about
the source or sponsorship of the products.” Perfumebay.com
Inc., 506 F.3d at 1173 (internal quotation marks omitted)
(quoting Reno Air Racing Ass’n, Inc. v. McCord, 452 F.3d
1126, 1135 (9th Cir. 2006)); see also 15 U.S.C. §§ 1114(1),
1125(a). The “proximity or relatedness of the goods” is but
one of eight factors for a district court to consider in its “like-
lihood of confusion” analysis. See Perfumebay.com, 506 F.3d
at 1173. Thus we caution the District Court to take a suffi-
ciently broad approach if and when it reaches the merits of
Halicki’s infringement claims.

D. Standing to Seek Declaratory Relief

[13] Halicki contends that the District Court erred by find-
ing that she did not have standing to seek a declaratory judg-
ment cancelling the “Eleanor” trademark registration of the
Defendant Carroll Hall Shelby Trust. We have explained the
standing requirements for a cancellation claim brought under
§ 1064 of the Lanham Act:

The Lanham Act requires only that the cancellation
petitioner plead and prove facts showing a ‘real
interest’ in the proceeding in order to establish stand-
ing. While [n]o absolute test can be laid down for
what must be proved, a cancellation petitioner must
show he is more than an intermeddler but rather has
a personal interest, and that there is a real contro-
versy between the parties. Thus, his allegations alone
do not establish standing. The petitioner, instead,
must show a real and rational basis for his belief that
he would be damaged by the registration sought to
 HALICKI FILMS v. CARROLL SHELBY INT. 15333
be cancelled, stemming from an actual commercial
or pecuniary interest in his own mark. Interest asser-
tions will vary with the facts surrounding each can-
cellation dispute and therefore, a petitioner’s
standing must be scrutinized case-by-case. Examples
of what courts have countenanced as reasonable
bases are: an assertion of a likelihood of confusion
[between the petitioner’s mark and the registered
mark at issue] which is not wholly without merit, . . .
or . . . a rejection of an application during prosecu-
tion.

Star-Kist Foods, Inc. v. P.J. Rhodes & Co., 735 F.2d 346, 349
(9th Cir. 1984) (internal citations and quotation marks omit-
ted). The District Court found that Halicki did not show a
“real and rational basis for [her] belief that [s]he would be
damaged by the registration sought to be cancelled, stemming
from an actual commercial or pecuniary interest in [her] own
mark,” id., because her “exclusive rights lie only with the
Original Eleanor and the exploitation of that property,” Hal-
icki, 2005 WL 5253338, at *19. For the reasons stated above,
Halicki has made the showing required by Star-Kist. First,
Halicki reserved the rights to Remake Eleanor. Moreover, an
issue exists as to whether there is a real likelihood of confu-
sion between the mark as used by the Defendants and the
mark as used by Halicki. If Halicki were to sell a car based
on the Original Eleanor, she may be able to show that a likeli-
hood exists that there would be confusion in the marketplace.

[14] The District Court also found that Halicki did not have
Article III standing — specifically, the court found that Hal-
icki had not shown an injury-in-fact because she provided no
evidence such as lost profits from the Defendants’ merchan-
dising of Eleanor. The District Court has conflated the Article
III requirement of alleging an injury-in-fact with the burden
of production required to defeat summary judgment. Halicki
submitted two expert reports estimating damages in excess of
$7 million. It is not clear from the District Court’s opinion if
15334 HALICKI FILMS v. CARROLL SHELBY INT.
it considered this evidence and rejected it or if it did not con-
sider it at all. In any event, the District Court erred by con-
cluding that a lack of evidence supporting an alleged injury-
in-fact deprived Halicki of Article III standing. Halicki has
alleged an injury-in-fact and submitted evidence on it suffi-
cient to preclude summary judgment for lack of standing.
Moreover, Halicki has statutory standing under the Lanham
Act because she retains the merchandising rights to Remake
Eleanor and, as stated above, an issue exists as to whether the
Defendants’ use of the mark “Eleanor” has created a likeli-
hood of confusion in the marketplace.

E. Halicki’s Other Claims

[15] The District Court rejected Halicki’s claim for con-
structive trust based on its understanding that she did not have
standing to bring suit for trademark infringement. In view of
the foregoing, the District Court should revisit her construc-
tive trust claim in the event that she establishes trademark
standing and infringement.

[16] To the extent the District Court granted the Defen-
dants’ summary judgment motion as to Halicki’s remaining
federal law claim for false advertising and unfair business
competition and state law claims for intentional or negligent
interference with prospective economic advantage, Halicki
has waived any challenges to the dismissal of these claims.
Halicki’s two passing references to “related state claims” in
the argument section of her opening brief are insufficient to
preserve those remaining state and federal claims for appellate
review. See Reusser v. Wachovia Bank, N.A., 525 F.3d 855,
858 n.4 (9th Cir. 2008) (stating that arguments not raised in
the opening brief are waived); Aramark Facility Servs. v.
Serv. Employees Intern. Union, Local 1877, 530 F.3d 817,
824 n.2 (9th Cir. 2008) (stating that arguments made in pass-
ing and inadequately briefed are waived).

[17] Halicki also challenges the District Court’s dismissal
for lack of standing of her state claim for unfair competition
 HALICKI FILMS v. CARROLL SHELBY INT. 15335
under Cal. Bus. & Prof. Code § 17200 et seq. The District
Court based its dismissal on its prior conclusion that Halicki
had retained only an interest in the Original Eleanor, not
Remake Eleanor. As we have now concluded otherwise, we
reverse the District Court’s ruling on this issue and hold that
Halicki has standing to bring her state unfair competition
claim.

F. Cross-appeal: Defendants are not entitled to attorneys’
fees under 17 U.S.C. § 505 of the Copyright Act or 15
U.S.C. § 1117(a) of the Lanham Act

The Shelby Defendants claim that the District Court erred
in denying their request for attorneys’ fees, arguing that
because the District Court found that the plain language of the
Agreement precluded Halicki’s claims, those claims were
therefore frivolous. As stated above, this Court reviews the
District Court’s denial of the Shelby Defendants’ motion for
attorneys’ fees for abuse of discretion. See Stephen W. Boney,
Inc., 127 F.3d at 825.

The Copyright Act under 17 U.S.C. § 505 provides for
recovery of reasonable attorneys’ fees by the prevailing party
in a civil action. In Fogerty v. Fantasy, Inc., 510 U.S. 517
(1994), the Supreme Court eliminated the “dual standard”
approach where attorneys’ fees are awarded to defendants
only where claims against it were frivolous or brought in bad
faith. Id. at 531-32, 534 (“Prevailing plaintiffs and prevailing
defendants are to be treated alike . . . .” ). Fogerty also
rejected a rule requiring attorneys’ fees in copyright infringe-
ment cases as a matter of course, instead leaving the question
of attorneys fees to the discretion of district courts. Id. at 534
(“[A]ttorneys’ fees are to be awarded to prevailing parties
only as a matter of the court’s discretion.”).

In deciding whether to award attorneys’ fees, courts in this
Circuit consider certain factors, including (1) “the degree of
success obtained; [(2)] frivolousness; [(3)] motivation; [(4)]
15336 HALICKI FILMS v. CARROLL SHELBY INT.
objective unreasonableness (both in the factual and legal argu-
ments in the case); and [(5)] the need in particular circum-
stances to advance considerations of compensation and
deterrence.” Jackson v. Axton, 25 F.3d 884, 890 (9th Cir.
1994), overruled on other grounds by Fogerty, 510 U.S. at
534 (internal citations omitted).

The District Court applied the factors articulated in Jackson
and denied the Shelby Defendants’ claim for attorneys’ fees
pursuant to § 505, concluding that (1) the claims were not
“frivolous, fanciful, or clearly baseless”; (2) Plaintiffs’ moti-
vation in bringing the claims was to protect an interest that
they believed was theirs; and (3) the Plaintiffs’ claims were
not unreasonable and were decided on the basis of standing,
not on the question whether the Shelby Defendants were in
fact copyright infringers. The Shelby Defendants claim that
the District Court abused its discretion in applying the factors.
According to the Shelby Defendants, Halicki’s copyright
claims were frivolous and unreasonable because: (1) “it is
highly doubtful” that the Eleanor character qualifies for copy-
right protection; and (2) Halicki had no standing to assert any
claims based on copying of Remake Eleanor. The Shelby
Defendants claim that Halicki could not have thought the
interests she sought to protect were hers, because she trans-
ferred those interests. As set forth above in the discussion of
Halicki’s claims, that is not so, and Halicki’s causes of action
must be heard on the merits. So, regardless which party pre-
vails, the District Court correctly found that Halicki’s claims
were not in any way frivolous, unreasonable, or lacking in
good faith. The District Court did not abuse its discretion by
denying the Defendants’ motion for attorneys’ fees under
§ 505.

Attorneys’ fees under the Lanham Act are awarded in “ex-
ceptional cases.” 15 U.S.C. § 1117(a). An exceptional case is
found where “a plaintiff’s case is groundless, unreasonable,
vexatious, or pursued in bad faith.” Stephen W. Boney, Inc.,
127 F.3d at 827. The District Court found that this case was
 HALICKI FILMS v. CARROLL SHELBY INT. 15337
not exceptional under the meaning of § 1117(a), concluding
that “nothing in the record demonstrates that Halicki’s lawsuit
‘is groundless, unreasonable, vexatious, or pursued in bad
faith.’ ” No abuse of discretion can be found in the District
Court’s conclusion that this is not an exceptional case within
the meaning of § 1117(a).

[18] The District Court’s denial of attorneys’ fees under 17
U.S.C. § 505 and 15 U.S.C. § 1117 is affirmed.

IV. Conclusion

The judgment of the District Court with respect to Plain-
tiffs’ claims is VACATED. The case is REMANDED for fur-
ther proceedings consistent with this opinion. The judgment
is AFFIRMED with respect to the District Court’s denial of
the Shelby Defendants’ claims for attorneys’ fees.