9th Circuit Sides with Disney in “Inside Out” Character Copyright

The Ninth Circuit ruled in favor of Disney on Monday and against plaintiff Denise Daniels who claimed the characters displaying the protagonist’s emotions in “Inside Out” were based off The Moodsters, an idea the plaintiff allegedly pitched to The Walt Disney Company and other entertainment and toy companies in the United States between 2005 and 2009.

Daniels and The Moodsters are represented by Robins Kaplan and Disney is represented by Munger, Tolles & Olson.

“The panel held that The Moodsters, lightly sketched anthropomorphized characters representing human emotions, did not qualify for copyright protection because they lacked consistent, identifiable character traits and attributes and were not especially distinctive,” the opinion states. The panel also determined the claims did not fit the “story being told” test because the Moodsters did not have a specific story. The court also cited that the rigorous standard needed to plead idea submission was not met in this case.

Daniels, a specialist in children’s emotional development, designed initiatives to help children cope with emotions, including The Moodsters. She hired a team to produce the idea of The Moodsters and created a pitchbook in 2005, according to the court document. The Moodsters had colors that correspond with the characters in “Inside Out,” including yellow for happiness, blue for sadness, red for anger, green for fear and pink for love. In “Inside Out” the green character is disgust and fear is represented with the color purple.

Daniels and her team released a 30-minute pilot episode and Moodsters toys and books sold through retailers beginning in 2015. “Inside Out” began development in 2010 and was released in 2015. Daniels filed the lawsuit against Disney in 2017.

The opinion held that ideas are not able to be copyrighted, and it is not a surprise that color would be used to represent an emotion. “The notion of using a color to represent a mood or emotion is an idea that does not fall within the protection of copyright,” it stated. It also explained the physical appearance of the Moodsters changed over time, the first generation appeared to be insect-like but the second looked like “small loveable bears.”

Daniels also argued there was an implied-in-fact contract with Disney based on discussions she had with various Disney employees when looking for a partner to develop the Moodsters. “There is no dispute that Daniels created the characters in question, and we accept as true that the alleged conversations took place.  But the existence of a conversation in which an idea is disclosed is, by itself, an insufficient basis to support an implied-in-fact contract,” the court decided.