Judge says Sherlock Holmes Estate’s licensing fee is ‘a form of extortion’

(CBR) In June, U.S. District Judge Richard Posner gleefully dismantled the Arthur Conan Doyle estate”s case, and confirmed the bulk of the Sherlock Holmes stories belongs to the public domain. However, it turns out he wasn”t quite finished.

As Hollywood, Esq., reports, today Posner ordered the estate to pay more than $30,000 in legal fees to author Leslie Klinger – and he took the opportunity to get in a few more licks.

Although 50 Sherlock Holmes stories were released before Jan. 1, 1923, the Doyle estate long insisted that publishers, television networks and film studios pay a licensing fee to use the characters and story elements. Most, including Warner Bros., BBC and CBS, complied, but Klinger – an author, editor and Holmes scholar – refused to pay $5,000 while assembling “In the Company of Sherlock Holmes,” a collection of new stories written by different authors. When the Doyle estate sent a letter to the publisher threatening to block sales of the book through Amazon, Barnes & Noble and other retailers, Klinger sued.

The estate had argued that Holmes is such a “complex” character that he was effectively incomplete until the author”s final story was published in the United States, leaving the entire body of work protected by copyright. A federal judge didn”t buy that, and in December issued a declarative judgment that the elements included in the 50 Sherlock Holmes stories published before Jan. 1, 1923 are, indeed, in the public domain in the United States (leaving the 10 published after 1923 still protected). In June, the Seventh Circuit upheld that decision, with Posner leading the way.

In Monday”s decision, Posner praised Klinger while chastising the estate, going so far as to label its licensing fees as “a form of extortion.”

“The Doyle estate”s business strategy is plain: charge a modest license fee for which there is no legal basis, in the hope that the ‘rational” writer or publisher asked for the fee will pay it rather than incur a greater cost, in legal expenses, in challenging the legality of the demand,” Posner wrote. “The strategy had worked with Random House; Pegasus was ready to knuckle under; only Klinger (so far as we know) resisted. In effect he was a private attorney general, combating a disreputable business practice – a form of extortion – and he is seeking by the present motion not to obtain a reward but merely to avoid a loss. He has performed a public service – and with substantial risk to himself. […] The willingness of someone in Klinger”s position to sue rather than pay Doyle”s estate a modest license fee is important because it injects risk into the estate”s business model. As a result of losing the suit, the estate has lost its claim to own copyrights in characters in the Sherlock Holmes stories published by Arthur Conan Doyle before 1923. For exposing the estate”s unlawful business strategy, Klinger deserves a reward but asks only to break even.”

Posner also cautioned that the estate “was playing with fire” when it sought help from Amazon and other retailers to “enforce its nonexistent copyright claims,” suggesting that doing so was a violation of antitrust laws.

The copyright of Doyle”s Sherlock Holmes works expired in 1980 in the United Kingdom. His 10 post-1922 stories enter the public domain in 2022 in the United States.

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