Updated: Aug 11, 2022
What if I told you that the Phillie Phanatic – yes, that Phillie Phanatic – could be responsible for an enormous change in copyright law?
In 2019, the Philadelphia Phillies filed a federal complaint against Harrison/Erickson Inc., the creators of the now hall of fame mascot, alleging that the creators were threatening to breach an agreement that would allow the Phillies to use the mascot “forever.” The threatened breach revolved around a provision in Section 203 of the Copyright Act that allows a copyright holder of a work who has assigned its rights to another party to terminate the assignment and reclaim full rights in the copyright. The year 2019 happened to be the 35th anniversary of the purported “forever” assignment of the Phanatic mascot to the Philadelphia Phillies organization, and Harrison/Erickson Inc. wanted to reclaim their rights under Section 203 if a new deal with the organization could not be reached; the Phillies took the stance that the assignment truly was “forever” and therefore Harrison/Erickson Inc. was threatening to breach the agreement.
In the backdrop of the ongoing lawsuit, the Philadelphia Phillies organization elected to make changes to the Phanatic in 2020 in an attempt to cement its rights in the continued use of the beloved bird(?) without having to provide additional compensation to Harrison/Erickson Inc. for the right to do so.
Now I am not an expert in design, but I am not sure I can see the difference in the new mascot:
To be fair, U.S. Magistrate Judge Sarah Netburn did acknowledge in her recent decision on this matter that the changes made by the Phillies were “no great strokes of brilliance.” So why did the Phillies seemingly win this case?
What the organization hoped to do by making these “changes” to the Phanatic was to create a derivative work. Under the Copyright Act, a derivative work is defined as:
A work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modifications which, as a whole, represent an original work of authorship
By taking the preexisting work, the original Phanatic mascot design created by Harrison/Erickson Inc., and recasting, transforming, and adapting it into the post-2020 version of the Phanatic mascot, the Philadelphia Phillies organization hoped to stake their claim under copyright law in the design of the new, derivative mascot. If found to be a derivative work, the Philadelphia Phillies would have copyright protections for the post-2020 version of the Phanatic mascot to the extent that the organization “material[ly] contributed” to the derivative work “as distinguished from the preexisting material employed in the work.” These rights would not affect the rights of Harrison/Erickson Inc. in the original mascot design, but it would create a situation where the Phillies would be able to continue to use the derivative mascot without further obligations to Harrison/Erickson Inc. as the copyright holders in the original mascot design.
The Phillies had no interest in negating or otherwise affecting Harrison/Erickson Inc.’s rights in the copyright – the organization simply wanted to stake its claim in the copyright for the derivative work and avoid having to negotiate a new deal for use of the copyrighted old mascot.
And for now, it seems that the Phillies will be able to continue to use the derivative work without worrying about renegotiating their “forever” deal with Harrison/Erickson Inc: the Court determined that the new Phanatic mascot was sufficiently transformed to constitute a derivative work.
What is next? The legal battle will continue. Lawyers for Harrison/Erickson Inc. fear that:
If left uncorrected this low bar for a derivative work will thwart the very purpose and intent of the copyright termination provisions established by Congress to fairly compensate original creators for their works 35 years after they have licensed or granted rights in their creations
Could the Phillie Phanatic lower the bar for what constitutes a derivative work under the Copyright Act? Probably not – I doubt that this decision will stand. But if it does, the Phillie Phanatic will be responsible for helping to create new case law that makes it easier for large sports organizations, and other large businesses, to make minimal changes to licensed, copyrighted works to effectively take ownership of those original works (before or after the 35 year window in Section 203) under the theory that what the sports organization is using is its own derivative work, not the original work.
Sources:  Phillies.pdf (courthousenews.com).  17 U.S. Code § 203 - Termination of transfers and licenses granted by the author | U.S. Code | US Law | LII / Legal Information Institute (cornell.edu).  Phillies will unveil a new-look Phanatic on Sunday | RSN (nbcsports.com).  Magistrate judge rules Phillies can use changed Phanatic (apnews.com).  17 U.S. Code § 101 - Definitions | U.S. Code | US Law | LII / Legal Information Institute (cornell.edu).  17 U.S. Code § 103 - Subject matter of copyright: Compilations and derivative works | U.S. Code | US Law | LII / Legal Information Institute (cornell.edu).  Magistrate judge rules Phillies can use changed Phanatic (apnews.com).  Magistrate judge rules Phillies can use changed Phanatic (apnews.com).