In the
`United States Court of Appeals
`For the Seventh Circuit
`No. 14-1128
`Appeal from the United States District Court for the
`Northern District of Illinois, Eastern Division.
`No. 13 C 1226 — Rubén Castillo, Chief Judge.
`ARGUED MAY 22, 2014 — DECIDED JUNE 16, 2014
`Before POSNER, FLAUM, and MANION, Circuit Judges.
`POSNER, Circuit Judge. Arthur Conan Doyle published his
`first Sherlock Holmes story in 1887 and his last in 1927.
`There were 56 stories in all, plus 4 novels. The final 10 stories
`were published between 1923 and 1927. As a result of statu-
`tory extensions of copyright protection culminating in the
`1998 Copyright Term Extension Act, the American copy-
`rights on those final stories (copyrights owned by Doyle’s
`estate, the appellant) will not expire until 95 years after the

`No. 14-1128
`date of original publication—between 2018 to 2022, depend-
`ing on the original publication date of each story. The copy-
`rights on the other 46 stories and the 4 novels, all being
`works published before 1923, have expired as a result of a
`series of copyright statutes well described in Societe Civile
`Succession Guino v. Renoir, 549 F.3d 1182, 1189–90 (9th Cir.
`Once the copyright on a work expires, the work becomes
`a part of the public domain and can be copied and sold
`without need to obtain a license from the holder of the ex-
`pired copyright. Leslie Klinger, the appellee in this case, co-
`edited an anthology called A Study in Sherlock: Stories Inspired
`by the Sherlock Holmes Canon (2011)—“canon” referring to the
`60 stories and novels written by Arthur Conan Doyle, as op-
`posed to later works, by other writers, featuring characters
`who had appeared in the canonical works. Klinger’s anthol-
`ogy consisted of stories written by modern authors but in-
`spired by, and in most instances depicting, the genius detec-
`tive Sherlock Holmes and his awed sidekick Dr. Watson.
`Klinger didn’t think he needed a license from the Doyle es-
`tate to publish these stories, since the copyrights on most of
`the works in the “canon” had expired. But the estate told
`Random House, which had agreed to publish Klinger’s
`book, that it would have to pay the estate $5000 for a copy-
`right license. Random House bowed to the demand, ob-
`tained the license, and published the book.
`Klinger and his co-editor decided to create a sequel to A
`Study in Sherlock, to be called In the Company of Sherlock
`Holmes. They entered into negotiations with Pegasus Books
`for the publication of the book and W.W. Norton & Compa-
`ny for distribution of it to booksellers. Although the editors

`No. 14-1128
`hadn’t finished the book, the companies could estimate its
`likely commercial success from the success of its predeces-
`sor, and thus decide in advance whether to publish and dis-
`tribute it. But the Doyle estate learned of the project and told
`Pegasus, as it had told Random House, that Pegasus would
`have to obtain a license from the estate in order to be legally
`authorized to publish the new book. The estate didn’t
`threaten to sue Pegasus for copyright infringement if the
`publisher didn’t obtain a license, but did threaten to prevent
`distribution of the book. It did not mince words. It told Peg-
`asus: “If you proceed instead to bring out Study in Sherlock II
`[the original title of In the Company of Sherlock Holmes] unli-
`censed, do not expect to see it offered for sale by Amazon,
`Barnes & Noble, and similar retailers. We work with those
`compan[ies] routinely to weed out unlicensed uses of Sher-
`lock Holmes from their offerings, and will not hesitate to do
`so with your book as well.” There was also a latent threat to
`sue Pegasus for copyright infringement if it published
`Klinger‘s book without a license, and to sue Internet service
`providers who distributed it. See Digital Millennium Copy-
`right Act, 17 U.S.C. § 512(i)(1)(A). Pegasus yielded to the
`threat, as Random House had done, and refused to publish
`In the Company of Sherlock Holmes unless and until Klinger
`obtained a license from the Doyle estate.
`Instead of obtaining a license, Klinger sued the estate,
`seeking a declaratory judgment that he is free to use material
`in the 50 Sherlock Holmes stories and novels that are no
`longer under copyright, though he may use nothing in the 10
`stories still under copyright that has sufficient originality to
`be copyrightable—which means: at least a tiny bit of origi-
`nality, Feist Publications, Inc. v. Rural Telephone Service Co., 499
`U.S. 340, 345 (1991) (“at least some minimal degree of crea-

`No. 14-1128
`tivity … the requisite level of creativity is extremely low”);
`CDN Inc. v. Kapes, 197 F.3d 1256, 1257, 1259–60 (9th Cir.
`The estate defaulted by failing to appear or to respond to
`Klinger’s complaint, but that didn’t end the case. Klinger
`wanted his declaratory judgment. The district judge gave
`him leave to file a motion for summary judgment, and he
`did so, and the Doyle estate responded in a brief that made
`the same arguments for enlarged copyright protection that it
`makes in this appeal. The judge granted Klinger’s motion for
`summary judgment and issued the declaratory judgment
`Klinger had asked for, thus precipitating the estate’s appeal.
`The appeal challenges the judgment on two alternative
`grounds. The first is that the district court had no subject-
`matter jurisdiction because there is no actual case or contro-
`versy between the parties. The second ground is that if there
`is jurisdiction, the estate is entitled to judgment on the mer-
`its, because, it argues, copyright on a “complex” character in
`a story, such as Sherlock Holmes or Dr. Watson, whose full
`complexity is not revealed until a later story, remains under
`copyright until the later story falls into the public domain.
`The estate argues that the fact that early stories in which
`Holmes or Watson appeared are already in the public do-
`main does not permit their less than fully “complexified”
`characters in the early stories to be copied even though the
`stories themselves are in the public domain.
`But jurisdiction first. Article III of the Constitution limits
`the jurisdiction of federal courts to cases or controversies
`(terms that appear to be synonyms), which is to say to actual
`legal disputes. It would be very nice to be able to ask federal
`judges for legal advice—if I do thus and so, will I be subject

`No. 14-1128
`to being sued and if I am sued am I likely to lose and have to
`pay money or even clapped in jail? But that would be advi-
`sory jurisdiction, which, though it exists in some states and
`foreign countries, see, e.g., Nicolas Marie Kublicki, “An
`Overview of the French Legal System From an American
`Perspective,” 12 Boston University Int’l L.J. 57, 66, 78–79
`(1994), is both inconsistent with Article III’s limitation of
`federal jurisdiction to actual disputes, thus excluding juris-
`diction over merely potential ones, and would swamp the
`federal courts given these courts’ current caseload, either
`leaving the judges little if any time for adjudicating disputes
`or requiring that judges’ staffs be greatly enlarged.
`So no advisory opinions in federal courts. Declaratory
`judgments are permitted but are limited—also to avoid
`transgressing Article III—to “case[s] of actual controversy,”
`28 U.S.C. § 2201(a), that is, actual legal disputes. Had Klinger
`had no idea how the Doyle estate would react to the publica-
`tion of In the Company of Sherlock Holmes, he could not have
`sought a declaratory judgment, because he would not have
`been able to demonstrate that there was an actual dispute.
`He could seek advice, but not from a federal judge. But the
`Doyle estate had made clear that if Klinger succeeded in get-
`ting his book published the estate would try to prevent it
`from being sold by asking Amazon and the other big book
`retailers not to carry it, implicitly threatening to sue the pub-
`lisher, as well as Klinger and his co-editor, for copyright in-
`fringement if they defied its threat. The twin threats—to
`block the distribution of the book by major retailers and to
`sue for copyright infringement—created an actual rather
`than merely a potential controversy. This is further shown
`by the fact that Klinger could have sued the estate for having

`No. 14-1128
`committed tortious interference with advantageous business
`relations by intimidating his publisher.
`So he’s been injured and seeks a judicial declaration that
`the conduct by the Doyle estate that caused the injury violat-
`ed his legal rights because the threat was based on a ground-
`less copyright claim. Only if Klinger obtains the declaration
`will he be able to publish his book without having to yield to
`what he considers extortion.
`Compare the more common example of a suit by an in-
`surance company seeking a judicial declaration that it has no
`obligation to defend or indemnify its insured. The company
`prefers to seek declaratory relief rather than waiting to be
`sued by the insured and defending against the suit because
`if it lost that suit it might be ordered to pay punitive damag-
`es. This case is similar. Klinger doesn’t want to publish his
`book before his controversy with the Doyle estate is re-
`solved, for if he does he’ll be facing the prospect not only of
`being enjoined from selling the book but also of having to
`pay damages if the estate sues him for copyright infringe-
`ment and wins. Even if the book’s sales turn out to be mod-
`est, and actual damages (as measured by losses of sales by
`competing editions licensed by the estate) therefore small,
`the estate would be entitled, for each copyrighted work in-
`fringed, to up to $30,000 in statutory damages and up to
`$150,000 if the court determined that Klinger had infringed
`the estate’s copyrights willfully. 17 U.S.C. §§ 504(c)(1), (2).
`Anyway he can’t publish his book; his publisher is unwilling
`to take a chance on publishing it, given the estate’s threat to
`impede distribution. And to be effective and thus harm the
`person seeking declaratory relief, a threat need not be a

`No. 14-1128
`threat to sue. See, e.g., MedImmune, Inc. v. Genentech, Inc., 549
`U.S. 118, 132 (2007).
`The estate argues that Klinger’s suit is premature (“un-
`ripe” in legal jargon), and therefore not yet an actual contro-
`versy and so not within the jurisdiction of the federal courts,
`for until the book is completed (and thus can be read), how
`is one to decide whether it infringes? That would be a good
`argument in many cases but not in the present one, because
`the only issue presented by Klinger’s quest for a declaratory
`judgment is one of law: whether he is free to copy the char-
`acters of Holmes and Watson as they are depicted in the sto-
`ries and novels of Arthur Conan Doyle that are in the public
`domain. To answer that question requires no knowledge of
`the contents of the book. A different question is whether the
`book will infringe the estate’s unexpired copyrights, and to
`answer that question would require knowledge of the con-
`tents. But that question is not presented by this suit. Klinger
`avers that his book will contain no original and therefore
`copyrightable material that appears only in the last ten sto-
`ries, which are still under copyright, but only material that
`appears in the public-domain works. If he’s lying, the estate
`will have a remedy when the book is published. To require
`him to defer suit until he finishes the book would gratui-
`tously discourage declaratory-judgment suits by authors and
`publishers threatened with suits for copyright infringement
`or with boycotts by distributors—and so would discourage
`authors from ever writing such works in the first place.
`There is still another jurisdictional wrinkle. Apparently
`because of a mislabeling of certain exhibits, the district judge
`was under the impression that Klinger’s suit was challeng-
`ing the copyrights on the ten stories published after 1922,

`No. 14-1128
`and so he denied summary judgment insofar as those stories
`were concerned. That makes it seem as if there were no final
`judgment in the district court, in which event we would not
`have jurisdiction of the appeal, as there is no suggestion that
`there is any basis for an interlocutory appeal. The plaintiff
`claims, however, not to be challenging the copyrights on the
`last ten stories. And the claim is correct, for he acknowledges
`that those copyrights are valid and that the only copying he
`wants to include in his book is copying of the Holmes and
`Watson characters as they appear in the earlier stories and in
`the novels. The summary judgment ruling on the last ten
`stories was a mistake, and can be ignored. Nothing remains
`in the district court. The declaratory judgment issued by the
`district judge, limited entirely to the earlier works, ended the
`litigation in that court.
`So the judge was right to assert (and retain) jurisdiction
`over the case, and we come to the merits, where the issue as
`we said is whether copyright protection of a fictional charac-
`ter can be extended beyond the expiration of the copyright
`on it because the author altered the character in a subse-
`quent work. In such a case, the Doyle estate contends, the
`original character cannot lawfully be copied without a li-
`cense from the writer until the copyright on the later work,
`in which that character appears in a different form, expires.
`We cannot find any basis in statute or case law for ex-
`tending a copyright beyond its expiration. When a story falls
`into the public domain, story elements—including charac-
`ters covered by the expired copyright—become fair game for
`follow-on authors, as held in Silverman v. CBS Inc., 870 F.2d
`40, 49–51 (2d Cir. 1989), a case much like this one. At issue
`was the right to copy fictional characters (Amos and Andy)

`No. 14-1128
`who had appeared in copyrighted radio scripts. The copy-
`rights covered the characters because they were original. As
`in this case the characters also appeared in subsequent radio
`scripts that remained under copyright, though the copy-
`rights on the original scripts in which the characters had ap-
`peared had expired. The court ruled that “a copyright af-
`fords protection only for original works of authorship and,
`consequently, copyrights in derivative works secure protec-
`tion only for the incremental additions of originality con-
`tributed by the authors of the derivative works.” Id. at 49;
`see Leslie A. Kurtz, “The Methuselah Factor: When Charac-
`ters Outlive Their Copyrights,” 11 U. Miami Entertainment &
`Sports L. Rev. 437, 447–48 (1994). The copyrights on the de-
`rivative works, corresponding to the copyrights on the ten
`last Sherlock Holmes stories, were not extended by virtue of
`the incremental additions of originality in the derivative
`And so it is in our case. The ten Holmes-Watson stories
`in which copyright persists are derivative from the earlier
`stories, so only original elements added in the later stories
`remain protected. Id. at 49–50. The “freedom to make new
`works based on public domain materials ends where the re-
`sulting derivative work comes into conflict with a valid cop-
`yright,” Warner Bros. Entertainment, Inc. v. X One X Produc-
`tions, 644 F.3d 584, 596 (8th Cir. 2011)—as Klinger acknowl-
`edges. But there is no such conflict in this case.
`Lacking any ground known to American law for assert-
`ing post-expiration copyright protection of Holmes and
`Watson in pre-1923 stories and novels going back to 1887,
`the estate argues that creativity will be discouraged if we
`don’t allow such an extension. It may take a long time for an

`No. 14-1128
`author to perfect a character or other expressive element that
`first appeared in his early work. If he loses copyright on the
`original character, his incentive to improve the character in
`future work may be diminished because he’ll be competing
`with copiers, such as the authors whom Klinger wishes to
`anthologize. Of course this point has no application to the
`present case, Arthur Conan Doyle having died 84 years ago.
`More important, extending copyright protection is a two-
`edged sword from the standpoint of inducing creativity, as it
`would reduce the incentive of subsequent authors to create
`derivative works (such as new versions of popular fictional
`characters like Holmes and Watson) by shrinking the public
`domain. For the longer the copyright term is, the less public-
`domain material there will be and so the greater will be the
`cost of authorship, because authors will have to obtain li-
`censes from copyright holders for more material—as illus-
`trated by the estate’s demand in this case for a license fee
`from Pegasus.
`Most copyrighted works include some, and often a great
`deal of, public domain material—words, phrases, data, en-
`tire sentences, quoted material, and so forth. The smaller the
`public domain, the more work is involved in the creation of
`a new work. The defendant’s proposed rule would also en-
`courage authors to continue to write stories involving old
`characters in an effort to prolong copyright protection, ra-
`ther than encouraging them to create stories with entirely
`new characters. The effect would be to discourage creativity.
`The estate offers the hypothetical example of a mural that
`is first sketched and only later completed by being carefully
`painted. If the sketch is allowed to enter the public domain,
`there to be improved by creative copiers, the mural artist

`No. 14-1128
`will have a diminished incentive to perfect his mural. True;
`but other artists will have a greater incentive to improve it,
`or to create other works inspired by it, because they won’t
`have to pay a license fee to do so provided that the copyright
`on the original work has expired.
`The estate asks us to distinguish between “flat” and
`“round” fictional characters, potentially a sharper distinction
`than the other one it urges (as we noted at the beginning of
`this opinion), which is between simple and complex. Re-
`peatedly at the oral argument the estate’s lawyer dramatized
`the concept of a “round” character by describing large circles
`with his arms. And the additional details about Holmes and
`Watson in the ten late stories do indeed make for a more
`“rounded,” in the sense of a fuller, portrayal of these charac-
`ters. In much the same way we learn things about Sir John
`Falstaff in Henry IV, Part 2, in Henry V (though he doesn’t ac-
`tually appear in that play but is merely discussed in it), and
`in The Merry Wives of Windsor, that were not remarked in his
`first appearance, in Henry IV, Part 1. Notice also that Henry
`V, in which Falstaff is reported as dying, precedes The Merry
`Wives, in which he is very much alive. Likewise the ten last
`Sherlock Holmes stories all are set before 1914, which was
`the last year in which the other stories were set. One of the
`ten, The Adventure of the Veiled Lodger (published in 1927), is
`set in 1896. See 2 William S. Baring-Gould, The Annotated
`Sherlock Holmes 453 (1967). Thus a more rounded Holmes or
`Watson (or Falstaff) is found in a later work depicting a
`younger person. We don’t see how that can justify extending
`the expired copyright on the flatter character. A contempo-
`rary example is the six Star Wars movies: Episodes IV, V, and
`VI were produced before I, II, and III. The Doyle estate
`would presumably argue that the copyrights on the charac-

`No. 14-1128
`ters as portrayed in IV, V, and VI will not expire until the
`copyrights on I, II, and III expire.
`The estate defines “flat” characters oddly, as ones com-
`pletely and finally described in the first works in which they
`appear. Flat characters thus don’t evolve. Round characters
`do; Holmes and Watson, the estate argues, were not fully
`rounded off until the last story written by Doyle. What this
`has to do with copyright law eludes us. There are the early
`Holmes and Watson stories, and the late ones, and features
`of Holmes and Watson are depicted in the late stories that
`are not found in the early ones (though as we noted in the
`preceding paragraph some of those features are retrofitted to
`the earlier depictions). Only in the late stories for example
`do we learn that Holmes’s attitude toward dogs has
`changed—he has grown to like them—and that Watson has
`been married twice. These additional features, being (we
`may assume) “original” in the generous sense that the word
`bears in copyright law, are protected by the unexpired copy-
`rights on the late stories. But Klinger wants just to copy the
`Holmes and the Watson of the early stores, the stories no
`longer under copyright. The Doyle estate tells us that “no
`workable standard exists to protect the Ten Stories’ incre-
`mental character development apart from protecting the
`completed characters.” But that would be true only if the
`early and the late Holmes, and the early and the late Watson,
`were indistinguishable—and in that case there would be no
`incremental originality to justify copyright protection of the
`“rounded” characters (more precisely the features that
`makes them “rounder,” as distinct from the features they
`share with their earlier embodiments) in the later works.

`No. 14-1128
`It’s not unusual for an author to use the same character in
`successive works, yet with differences resulting, in the sim-
`plest case, just from aging. In Shakespeare’s two Henry IV
`plays, the Henry who later becomes Henry V is the Prince of
`Wales, hence Crown Prince of England; in Henry V he is the
`King of England. Were Henry IV in the public domain and
`Henry V under copyright, Henry Prince of Wales could be
`copied without Shakespeare’s permission but not Henry V.
`Could the Doyle estate doubt this? Could it think Holmes a
`more complex and altered character than Henry?
`The more vague, the less “complete,” a character, the less
`likely it is to qualify for copyright protection. An author
`“could not copyright a character described merely as an un-
`expectedly knowledgeable old wino,” but could copyright
`“a character that has a specific name and a specific appear-
`ance. Cogliostro’s age, obviously phony title (‘Count’), what
`he knows and says, his name, and his faintly Mosaic facial
`features combine to create a distinctive character. No more is
`required for a character copyright.” Gaiman v. McFarlane, 360
`F.3d 644, 660 (7th Cir. 2004); see also Nichols v. Universal Pic-
`tures Corp., 45 F.2d 119, 121 (2d Cir. 1930) (L. Hand, J.). From
`the outset of the series of Arthur Conan Doyle stories and
`novels that began in 1887 Holmes and Watson were distinc-
`tive characters and therefore copyrightable. They were “in-
`complete” only in the sense that Doyle might want to (and
`later did) add additional features to their portrayals. The re-
`sulting somewhat altered characters were derivative works,
`the additional features of which that were added in the ten
`late stories being protected by the copyrights on those sto-
`ries. The alterations do not revive the expired copyrights on
`the original characters.

`No. 14-1128
`We can imagine the Doyle estate being concerned that a
`modern author might write a story in which Sherlock
`Holmes was disparaged (perhaps by being depicted as a
`drug dealer—he was of course a cocaine user—or as an idiot
`detective like Inspector Clouseau of the Pink Panther mov-
`ies), and that someone who read the story might be deterred
`from reading Doyle’s Sherlock Holmes stories because he
`would realize that he couldn’t read them without puzzling
`confusedly over the “true” character of Sherlock Holmes.
`The analogy would be to trademark dilution, see, e.g., Hyatt
`Corp. v. Hyatt Legal Services, 736 F.2d 1153, 1157–59 (7th Cir.
`1984), as if a hot-dog stand advertised itself as “The Rolls-
`Royce Hot-Dog Stand.” No one would be confused as to
`origin—Rolls-Royce obviously would not be the owner. Its
`concern would be that its brand would be diminished by be-
`ing linked in people’s involuntary imagination to a hot-dog
`stand; when they thought “Rolls-Royce,” they would see the
`car and the hot-dog stand—an anomalous juxtaposition of
`high and low. There is no comparable doctrine of copyright
`law; parodies or burlesques of copyrighted works may or
`may not be deemed infringing, depending on circumstances,
`see Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 580–81
`and n. 14, 588, 591 (1994), but there is no copyright infringe-
`ment of a story or character that is not under copyright. An-
`yway it appears that the Doyle estate is concerned not with
`specific alterations in the depiction of Holmes or Watson in
`Holmes-Watson stories written by authors other than Arthur
`Conan Doyle, but with any such story that is published
`without payment to the estate of a licensing fee.
`With the net effect on creativity of extending the copy-
`right protection of literary characters to the extraordinary
`lengths urged by the estate so uncertain, and no legal

`No. 14-1128
`grounds suggested for extending copyright protection be-
`yond the limits fixed by Congress, the estate’s appeal bor-
`ders on the quixotic. The spectre of perpetual, or at least
`nearly perpetual, copyright (perpetual copyright would vio-
`late the copyright clause of the Constitution, Art. I, § 8, cl. 8,
`which authorizes copyright protection only for “limited
`Times”) looms, once one realizes that the Doyle estate is
`seeking 135 years (1887–2022) of copyright protection for the
`character of Sherlock Holmes as depicted in the first Sher-
`lock Holmes story.

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