DeLorean counsel: ‘Unique’ case signals hope for future of film licensing

Counsel for the maker of Back to the Future’s time-travelling car, Roger Behle of Foley tells WIPR why film merchandising is a lucrative hit—as long as it’s protected, of course.

Earlier this year, the DeLorean Motor Company—makers of the iconic 1980s car that featured in the Back to the Future trilogy—won its claim that NBCUniversal Media infringed its trademark and trade dress rights.

The films’ popularity propelled NBCU’s continuous distribution of the films and use of the modified DeLorean DMC-12 since 1985 in various media, advertising, and the sale of merchandise including apparel, art, books, games, media, novelties, collectibles, prop replicas, and toys.

Fast-forward to 2022, and DeLorean Estate sued NBCUniversal in a Lanham Act claim for breach of contract and accounting, and trademark and trade dress infringement, of the car.

Two years later, following a settlement between the two parties, a California court ruled in February that the entertainment giant had used the car without permission, in merchandise, at Universal Studios’ theme parks and in film tie-ins such as Ready Player One.

The court part-granted NBCUniversal’s motion for summary judgment, arguing that DeLorean lacked standing to claim that it broke a pivotal 1989 contract between the pair because the deceased carmaker’s estate did not transfer the contract to the film studio.

However, US District Judge David Carter ordered a trial on the trademark infringement issues.

But the parties settled days before the trial, and DeLorean achieved a victory.

Roger Behle, a partner and head of the intellectual property and entertainment law departments at Foley, was lead counsel for DeLorean. He talks to WIPR about how the case was resolved, and why it involved “a really unique legal issue”.

WIPR: What was it about your strategy that led to this success?

RB: Decades ago, my client, the DeLorean Motor Company, had begun registering its trademark registrations in multiple countries, including the UK, for the DeLorean brand. That was a key component to the outcome.

DeLorean is constantly going out and finding people that are infringing DeLorean—either the name or a replica of the car as a toy or a model, or are somehow trying to trade off of the DeLorean brand.

What was interesting is that the original time machine for the movie was supposed to be an old refrigerator. But the folks developing the movie said, we can't have that. Let's make it a car. And they all settled on a DeLorean because it just looked very different—really cool and ‘space-age’ with the stainless steel and gullwing doors.

But of course, as everybody knows, they took a DeLorean and they added things to it—the flux capacitor and the ‘Mr. Fusion’ [power source] and other things to make it look more like a time machine.

Clearly, NBCUniversal had added things that don’t come on a standard DeLorean car. But they kept the name DeLorean, they kept the logo on the front. And of course, the design of the car. But my client has a trade dress registration for the entire design of the car.

So one of the issues was that NBCUniversal was selling merchandise [for the] DeLorean, with [its modifications]. And they had a theme park ride where people would get inside a DeLorean and go through the ride at Universal Studios, Hollywood. But people still know it as a DeLorean. It’s still marketed and sold as a DeLorean.

Our trademarks were being used when they sold merchandise [such as] T-shirts, toys, Legos, little matchbox hot-wheel cars. Typically you acquire a licence; whether it’s Ford or Chevy or Aston Martin or whomever, you go get a licence and then you can add whatever else you want to it, as long as the licence allows it.

That was the battle here. Universal said, ‘we're not really selling it as a pure DeLorean, we're adding things [to it]. But we said: ‘It is a DeLorean. You call it a DeLorean in the movie, it's marketed and advertised as a DeLorean. And it's got our branding all over it’.

So that was the trademark issue. Is it still our client’s IP? The answer is yes.

How common are cases like this in the US?

DeLorean is not huge in that it doesn’t have hundreds or thousands of employees, though it has a very substantial presence. But it’s not anywhere as big as NBCUniversal. So it was very much a David and Goliath situation where, relatively speaking, DeLorean Motor Company was the David in the fight.

If I can put a fine point on it, this was a real legal battle. In the movies, [NBCUniversal] took a DeLorean and they modified it. The question is, does that divest DeLorean of all its rights?

The answer is no. You can take an existing product and, like I said, add things to it. You might own what you added, but it doesn't divest the product owner of all of its rights, and that’s what this case was about.

We had two large, well-known brands—the DeLorean and Back to the Future. And who owns what when the two come together?

There are not lots of cases lined up that involve cars or other products being used without permission. This was a really unique legal issue for the reason that it was a modified car. Then [the question is], what part of it does NBCUniversal have the right to claim, and what remains DeLorean’s property?

Anytime that you take an existing product and you modify it for a television show—you make it talk or whatever—those additions or modifications might be separately protectable to the underlying product. Because it’s possible, as the court in our case said, you can have a car with more than one trademark.

How strong is the movie prop licensing industry?

There is a very robust business—and it's not just in the US, it's international—where companies will pay to have their products featured in motion pictures or in television shows. You might be watching a movie and you'll see a lot of Mercedes Benz in this movie, and it’s because Mercedes paid for its product placement.

That's one aspect of that business, but the other aspect is the merchandising. Apart from the motion picture or the television show, especially with a property like Back to the Future, you've got a huge market for toys and shirts and video games etc. Those licences are very sought after, and can be very lucrative, depending on the property involved.

The interesting thing about merchandise is it can constantly be refreshed. Even though it’s the same item, you just keep rebooting it over and over again. It's what we call evergreen—you just keep a new bunch of toys, new video games or whatever. And with technology, some of these video games make it look like you're actually riding in a DeLorean or driving one.

So with merchandising, it’s not like you have the same old toys from 40 years ago that you’re still selling. You can update them, and that’s what makes it a lucrative market.

The other thing is there's a huge collector market too, including books. There’s a Back to the Future almanac that shows all the toys that have been sold over the 40 years since the movie came out, such as McDonald Happy Meals toys. And then there's the market of people wanting to take their DeLorean and have it modified in some fashion to look like [the car used in the film].

What does the case outcome mean for other film prop licensing litigation?

It probably will signal that even the largest companies still have to obtain rights, before marketing and selling other people's products. Just on a very general level, it signals to the little guy that you're not just going to be pounded into the ground by a larger company, because the rules are, if somebody uses your trademark commercially, and they make money from it, they should pay you and get a licence or permission.

The thing that makes me pleased about this case is it was an outcome against a very large company. I have to say, Universal had some very good lawyers, and I have nothing but compliments and respect for what they did.

But I think the result is good for them and good for us. Because while the settlement terms are confidential, I can confirm that you will continue to see merchandise for Back to the Future that features DeLorean cars. It will work out well for NBCUniversal, and work out well for us going forward all the way into the future. No pun intended.

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