Halloween in the United States generates commercial activity—and potential intellectual property risk, if manufacturers produce trademarked costumes. Costumes replicating branded characters, trademarks, or other protected intellectual property may be central to intellectual property disputes. Disney cases illustrate where those lines are drawn, and how courts rely on survey evidence when evaluating infringement claims.
Halloween Market and IP Implications
Spirit Halloween is the largest Halloween-only retail chain in the United States, generating over $1.1 billion in annual revenue, occupying vacant commercial real estate each season to meet consumer demand. U.S. consumers spent $10.6 billion on Halloween in 2022. Halloween costumes in the United States are wide-ranging, spanning everything from a stalk of corn to characters from recent popular movies. But when costumes imitate a brand or character too closely, issues of consumer confusion may arise.
Copyright Protection for Costumes
Wearable components of most costumes are not eligible for copyright protection, because they serve a utilitarian function. The Supreme Court’s decision in Star Athletica v. Varsity Brands provided an important exception: a feature incorporated into a garment may be protected by copyright when it can be perceived as a two- or three-dimensional work of art.
Trademark protection operates alongside, and sometimes independently of, copyright in the costume context. Many companies license their trademarks and copyrights for use in Halloween costumes, particularly in the superhero and entertainment categories. When those marks are infringed, trademark holders may pursue enforcement through litigation.
Disney v. Kool Klown Party People: Trademark Infringement in Character Costumes
In 2008, The Walt Disney Company brought a federal trademark infringement suit against Kool Klown Party People, Inc. for advertising and selling adult-size costumes that closely resembled Disney’s trademarked characters Tigger and Eeyore from the Winnie the Pooh franchise. Beyond the sale of the costumes themselves, KKPP used the costumes in events, depicting the Disney characters without authorization. The case ultimately settled in Disney’s favor.
In a separate action, Disney Enterprises Inc., Marvel Characters Inc., and Lucasfilm Ltd. LLC sued Characters for Hire LLC and its owner, Nick Sarelli, for copyright and trademark infringement. The suit alleged that Characters for Hire offered party services and entertainment using protected characters, including Mickey Mouse; Elsa and Anna from Frozen; Captain America, Hulk, and Iron Man from The Avengers; and various Star Wars characters, without authorization.
Characters for Hire argued that the characters were derived from works in the public domain and that their use was fair use. The court considered evidence of a likelihood of consumer confusion between the characters used by Characters for Hire and Disney, Marvel, and Lucasfilm at the summary judgment stage. The court found for the defendants on the trademark claims, dismissing those counts, because the evidence did not establish a sufficient likelihood of consumer confusion.
Consumer Surveys in Trademark Infringement Cases
Commercial use of costumesand the profit motive behind that use were central to these infringement analyses. In the Characters for Hire matter, the court applied standards for analyzing the likelihood of confusion to resolve the trademark claims. Properly designed likelihood of confusion surveys address whether consumers associate a costume, character, or party entertainment service with a particular brand or IP holder, and whether that association creates a reasonable likelihood of confusion as to source, affiliation, sponsorship, or approval. In cases where the outcome turns on this standard, as it did in Characters for Hire, survey evidence can be determinative.
IMS Legal Strategies provides litigation survey design and expert testimony for trademark infringement actions, including likelihood of confusion surveys and patent and copyright infringement surveys. Contact our team to discuss your matter.
