## Facts

- Sid & Marty Krofft Television Productions, Inc. created the children’s television series *H.R. Pufnstuf*, set in a fantasy world with costumed characters and anthropomorphic objects.
- In 1970, McDonald’s advertising agency, Needham, contacted the Kroffts to propose an advertising campaign based on *H.R. Pufnstuf* characters and discussed the concept with them.
- Needham later stated the proposal was cancelled, but proceeded to develop the “McDonaldland” advertising campaign.
- Needham hired former Krofft employees to work on McDonaldland sets and costumes and used a voice actor associated with *H.R. Pufnstuf*.
- McDonaldland commercials first aired in January 1971; the Kroffts alleged the commercials copied protectable elements of *H.R. Pufnstuf*.
- After a jury trial, the jury found infringement and awarded $50,000 to the Kroffts.
- The district court declined to order an accounting of profits and declined to award statutory “in lieu” damages under 17 U.S.C. § 101(b).

## Issues

1. Whether the McDonaldland commercials were substantially similar to protectable expression in *H.R. Pufnstuf* (as opposed to sharing only unprotectable ideas), such that copyright infringement was established.
2. Whether imposing copyright liability for the commercials violated defendants’ First Amendment rights.
3. Whether the district court erred in limiting recovery to a $50,000 award and refusing an accounting of profits and/or statutory “in lieu” damages under 17 U.S.C. § 101(b).

## Decision

- The Ninth Circuit affirmed the finding of infringement, holding the infringement determination was not clearly erroneous.
- The court rejected the defendants’ First Amendment defense.
- The court reversed in part on remedies, holding the district court erred in its approach to damages and in denying further monetary relief.
- The case was remanded for further proceedings concerning an accounting of profits and consideration of statutory “in lieu” damages under § 101(b).

## Legal Principles

- Copyright protects expression, not ideas; infringement requires copying of protectable expression.
- Substantial similarity analysis proceeds in two steps:
  - **Extrinsic test:** an objective comparison of concrete expressive elements (including plot, theme, dialogue, mood, setting, pace, characters, and sequence of events).
  - **Intrinsic test:** a subjective evaluation of the total concept and feel from the standpoint of an ordinary reasonable observer.
- Proof of access combined with substantial similarity can support an inference of copying.
- Copyright liability does not violate the First Amendment when it is based on unauthorized copying of protected expression.
- Monetary remedies may include actual damages and the infringer’s profits and, where applicable, statutory “in lieu” damages; a court may not deny these remedies based on an incorrect view of governing law.

## Conclusion

The Ninth Circuit upheld the jury’s determination that McDonaldland copied protectable expression from *H.R. Pufnstuf* using an extrinsic/intrinsic substantial-similarity framework, rejected a First Amendment defense, and remanded for reconsideration of monetary relief including profits and possible statutory damages.


Sid & Marty Krofft Television Prods., Inc. v. McDonald’s Corp., 562 F.2d 1157 (9th Cir. 1977)