The Original Lawsuit

Details of the entire affair are frustratingly hard to find on the internet thanks to a combination of its longevity but also the inevitable effects of link rot. are juicy! The gist is that SQRAT is a half-squirrel half-rat character created by Silberstein, pitched to ‘FOX’ in 1999 and ultimately passed on. Cue the 2003 release of Ice Age featuring the character Scrat that is also a half-squirrel half-rat character.

Via: The Human Interest Story

Want to read the actual legal documents for yourself? You should! Here they are:
Subsequently, in or around July 2003, Silberstein purchased Szafarczyk’s rights in and to the Beaver, retroactive to the date of the Beaver’s creation in July 1994.

I’ve a few parting thoughts. The first is that creators must be smart about how they handle their creations, but also how how they contest any litigation surrounding them. Get a good lawyer and get your facts straight before filing. Large corporations like Disney and FOX do have the resources to discover the truth, and they will do it when they know they are right.

She then sued FOX again but, crucially, used the same arguments as her original lawsuit.

Silberstein had filed a trademark claim for ‘SQRAT’ back in 1999 that was abandoned by accident prior to the release of Ice Age in 2002. She then re-filed and used that as a basis for the original lawsuit. The result of which is above.

Silberstein subsequently sued for copyright and trademark infringement and this is where things start to get interesting. Silberstein came up with the idea and the name ‘SQRAT’ but hired an artist to create an image of the character with the intent of merchandising it. That artist did not create what was supposed as an original image but a “dead ringer” for a piece of clip art of a beaver sold commercially by a company called DAS. During development of Ice Age, FOX approached the company behind the clip art package (DAS) and acquired rights to the clip art image in question. Except it would later be revealed, that the image was not created under a work for hire arrangement and was instead created by an independent contractor; Ron Szafarczyk. He disputed DAS’ ownership of the image and in July 2003, arbitration awarded both parties an equal 50% ownership in it, retroactive to 1999.
What does this mean for either party? Probably not as much as you might think. Disney’s shutdown of Blue Sky suggests they’re satisfied with the assets they acquired and can milk for ever more amen since the judgements (and possibly settlement) allow them to exploit they properties already in existence. For Silberstein, she can now sell merchandise with the ‘SQRAT’ name and enforce her trademark properly.
On the trademark issue, it held that:

  1. Silberman was unable to prove that her 1999 pitch of ‘SQRAT’ was definitively connected to the development of FOX’s Scrat. On the other hand, FOX was able to prove that said pitch to the company in 1999 was to a completely different part of the overall conglomerate that shared no connection to the film studio or Blue Sky.
  2. FOX was able to provide incontrovertible proof that “the conception of this character [Scrat] and its role in the film evolved and developed in an incremental fashion that does not bear any indication of having been shaped by plaintiff’s Sqrat or indeed by any other preexisting creative work.”
  3. As a half owner of the original beaver, Silberstein could not sue the other, equal owner (FOX) for copyright infringement for their use of the beaver as the basis for Scrat. She only had grounds to sue for clear and obvious copying of her own derivative SQRAT character. The court found that “…no reasonable jury could conclude that Sqrat and Scrat are substantially similar with respect to protectible (and, indeed, non-protectible) elements…”. The judge noted one of the distinctions being that SQRAT exists solely as a 2-D characater while Scrat exists only as a 3-D character.

That didn’t pass muster with the federal courts and in 2018, they found that because her argument in this second case was the same as the original and relied on the same facts as the original case which were already judged upon, they precluded her from having a new case even though she filed under a different cause and in a different [federal district] court.

  1. “Plaintiff’s trademark infringement claim is deficient as a matter of law.” Oof! Silberman never actually exploited her trademark for commercial purposes, instead “Silberstein’s Sqrat logo was a mere advertisement for itself as a hypothetical commodity”. Basically since Silberstein never actually sold any SQRAT merchandise, she had no grounds under the law for remediation from FOX. Interestingly, the court noted that “Had she agreed to one of the offers she allegedly received in 2000 to license Sqrat for a TV project (Silberstein Decl. ¶¶ 85-90 Exs. I J), that commodity might have formed the basis for a trademark infringement action.”

All in all, there’s a lot surrounding the entire saga that highlights yet again why the intersection of art, commerce, and law is never straightforward.

The Appeal

Silberstein’s lawsuits concern both copyright and trademarks and as the initial lawsuit details, they can form a formidable legal thicket for owners and users alike.

That’s NOT All Folks!

Stolen ideas are a dime a dozen and studios deal with their fare share of shafted ‘original creators’ looking for restitution. The SQRAT/Scrat case if anything, magnifies the enormity of the legalese to be navigated by creators to contest and win a case. Silberstein lost not once, but twice and managed to luck out in the end, but the same won’t be true for others. She’s also had almost two decades of legal fighting over her head to deal with.
What the settlement potentially involved was Disney promising not to file or contest further litigation in return for Silberstein promising not to file any further suits over the trademark. Ergo the latter’s recent tweet and the absence of the Scrat character from the former’s latest series.
The summary judgement in the case (essentially the court determines that given all the known facts in the case, a trial would produce no different outcome) was against Silberman on all counts.
So where we’re at at the end of 2004 is that both FOX and Silberstein own half of a character that forms the basis of each other’s SQRAT/Scrat creations. Notably, FOX did not contest that the beaver in question forms a basis for the Ice Age ‘Scrat’ character.
Now here’s where it gets really interesting:
After the judgement in that case, Silberstein filed a trademark for ‘SQRAT’ on what it known as the ‘Supplemental Register’; a good description of which is here. Essentially she was reasserting her ‘SQRAT’ trademark under a slightly different form of legal protection.

The Confusion

…in or around September 2003, Fox and DAS entered into a second agreement that superseded and voided the March 2002 agreement based on the fact that the parties had, at the time of that prior agreement, lacked knowledge as to the ownership of the Beaver copyright. Under the new agreement, Fox gained a non-exclusive license, retroactive to July 27, 1994 and continuing in perpetuity, to use and exploit the Beaver in connection with Fox’s Scrat.
Details on what happened next are hazy, but what is known is that Disney acquired FOX and therefore Blue Sky in 2019 and in 2020 approached Silberstein with an offer of settlement with results depending on who you ask. Silberstein says she ‘won’ while Disney state they ‘settled’, the case. Since the settlement is private, no details are available.
The other thought is that almost two decades of litigation ultimately amounts to nought. Silberstein obtained her federal trademark in the end but it’s valid only within the United States of America. Is Disney the undisputed owner of the ‘Scrat’ trademark everywhere? You bet! There is nothing stopping them from producing a new Ice Age film or show in, say, Canada and selling it everywhere but the USA. Such a move would not be surprising since Ice Age has traditionally done better in the international market than the domestic on. If that’s the case, who really won in the end?

Parting Thoughts

But that’s far from the end of the story. Silberstein appealed the decision and in 2007, the Court of Appeals affirmed the lower court’s decision that, essentially, Silberstein failed to successfully argue her case or disprove FOX’s evidence to the contrary. In 2008, the District Court denied FOX’s request for legal fees on the grounds that while unsuccessful and presenting a weak case, Silberstein nonetheless used the correct legal motions to pursue it and that her decision to sue was not made in bad faith. That being said, FOX alleged that Silberstein “intended to extort a settlement” in the original case and, “perjured herself at her deposition”, and that she did not believe the arbitration settlement over the beaver character was binding on the court. FOX also allege (without any apparent proof) that Silberstein created a document to support her claims.
This week, ‘SQRAT’ creator Ivy ‘Supersonic’ Silberstein celebrated the postscript of over a decade of litigation against Blue Sky Studios/FOX (subsequently Disney). A lot of articles (and there are quite a few) comment that Disney can no longer use the character ‘Scrat’ or create any more films featuring him. Such an assertion isn’t entirely correct and once again highlights the muddy waters that lie between copyright and trademarks. Read on to find out why.
A copyright prevents anyone else from replicating the artwork in question even for non-commercial reasons and in different forms without permission from the creator. A trademark prevents anyone promoting or selling something substantially similar under a name that may cause confusion. For example, you could not start your own Pixar animation studio without infringing on Disney’s trademark, but you could start a Pixar oil company and there’s little that Disney can do to stop you. (Ironically. Disney got sued for trademark reasons for selling ‘Luxo Jr.’ versions of the Luxo lamp that serves as Pixar’s mascot.)
On the copyright issue, it held that:
As I wrote about here (and here, and here), there’s a lot of confusion surrounding copyright and trademarks with the two often being conflated for each other. Silberstein’s actions add further confusion as her tweets and other interviews attest to since the nuanced detail of what exactly she owns is not mentioned.

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