LOS ANGELES, CA – In a recent ruling that could carry enormous importance for creators of video games, comic books, and various digital media forms, the California 2nd District Court of Appeals upheld the First Amendment right of artists to make use of characters that resemble celebrities and other public figures, so long as that use is “transformative” in nature.At issue in the case – Kirby v. Sega of America – was the claim of former Deee-Lite singer Kieren Kirby (AKA “Lady Miss Kier,” “Miss Kier” and “Lady Kier”) that the character “Ulala” from the Sega video game Space Channel 5 was “nothing other than a mere emulation of Lady Kier with minor digital enhancements and manipulations,” and, as such, that her “likeness and identity had been misappropriated” by Sega.

In the lawsuit, initiated in April 2003, Kirby alleges that she has causes for action including common law infringement of the right of publicity, misappropriation of likeness, violation of the Lanham Act, unfair competition, interference with prospective business advantage, and unjust enrichment.

Sega moved for summary judgment in the case, arguing that the First Amendment provides a complete defense for all of Kirby’s claims. The trial court agreed, granted Sega’s motions, and awarded the company with attorney’s fees as provided under California law.

In its recent ruling, the appellate court concurred with the lower court, reasoning that “Material issues of fact exist as to whether Kirby’s likeness or identity was appropriated,” and that the “First Amendment affords a complete defense to Kirby’s claims.”

In the decision, the court acknowledges certain similarities between Kirby and Ulala, noting that both “images are thin, and have similarly shaped eyes and faces, red lips and red or pink hair.” The court further recognized that the video game character and the singer wear similar clothing, and use some of the same catch phrases, such as “groove,” “meow,” “dee-lish,” and “I won’t give up.”

“These similarities support Kirby’s contention her identity was misappropriated,” the court concedes, countering that “Ulala and Kirby also differ in significant respects.”

Regardless of whether Ulala is, in fact, based on Kirby, the court reasoned that the First Amendment protects the use of Kirby’s likeness on the part of Sega, so long as that use is “transformative,” according to the standards for transformative use set in prior cases.

One such case cited by the Court is Winter v. D.C. Comics; in that case, musicians Edgar and Johnny Winter sued DC Comics for publishing a series of comics featuring two half-worm, half-human characters based the Winter brothers.

As noted in the court’s decision, both of the DC characters “had long white hair and albino features similar to the Winter brothers, while one wore a hat similar to one often worn by Johnny Winter.”

The Winter brothers sued for statutory appropriation and lost. Applying the “transformative” test, the Court in Winter v. D.C. Comics found that “the comic depictions contained significant expressive content beyond the Winters’ mere likenesses.”

Applying the same standard of transformative use in the Kirby case, the court states “we agree with the trial court that, notwithstanding certain similarities, Ulala is more than a mere likeness or literal depiction of Kirby.”

“Ulala contains sufficient expressive content to constitute a ‘transformative work’ under the test articulated by the Supreme Court,” the Appellate Court states in its Kirby decision.

The court’s decision in the case also creates what Kirby’s attorney referred to as a “square split” in the courts, noting that the Missouri Supreme Court came to a different conclusion in a case involving former St. Louis Blues hockey player Tony Twist and Todd McFarlane, creator of the comic book series Spawn.

Courtney Palko, an attorney with the Los Angeles-based firm that represents Kirby in the lawsuit, told the National Law Journal she sought publication of the court’s ruling in Kirby v. Sega to draw attention to the case.

“It’s an important decision,” Palko said, adding that the case further limits right-of-publicity claims in California. (“Right of publicity” is the right to prevent unauthorized use of one’s likeness or name by a third party for that third party’s commercial benefit).

Palko added that “Now that there’s this Missouri case out there, I think there is a square split,” between the California and Missouri courts.

In the Twist case, McFarlane was sued for allegedly violating Twist’s right of publicity because McFarlane used the name “Tony Twist” for a fictional crime boss in a comic book.

The Missouri Supreme Court rejected McFarlane’s First Amendment defense in the case, finding that because the use of Swift’s name was not done in the context of parody, or other expressive comment, and not a fictionalized account of the real Tony Twist, “the metaphorical reference to Twist, though a literary device, has very little literary value compared to its commercial value.”

Reasoning that “the use and identity of Twist’s name has become predominantly a ploy to sell comic books and related products rather than an artistic or literary expression,” the Missouri Supreme Court asserted that “under these circumstances, free speech must give way to the right of publicity.”

Michael Kahn, a St. Louis-based attorney who represents McFarlane in the Missouri case, told the National Law Journal that he has applied to appeal McFarlane’s case to the Missouri Supreme Court. If that fails, McFarlane said he will petition the U.S. Supreme Court to hear the case, given the inconsistent case law that exists.

“It creates a very profound First Amendment issue for most forms of entertainment and media,” Kahn said of the uncertainty created by the varying case law.