                               In the

    United States Court of Appeals
                 For the Seventh Circuit
                     ____________________
No. 14-1128
LESLIE S. KLINGER,
                                                   Plaintiff-Appellee,

                                 v.

CONAN DOYLE ESTATE, LTD.,
                                               Defendant-Appellant.
                     ____________________

         Appeal from the United States District Court for the
           Northern District of Illinois, Eastern Division.
           No. 13 C 1226 — Rubén Castillo, Chief Judge.
                     ____________________

       ARGUED MAY 22, 2014 — DECIDED JUNE 16, 2014
                     ____________________

   Before POSNER, FLAUM, and MANION, Circuit Judges.
    POSNER, Circuit Judge. Arthur Conan Doyle published his
first Sherlock Holmes story in 1887 and his last in 1927.
There were 56 stories in all, plus 4 novels. The final 10 stories
were published between 1923 and 1927. As a result of statu-
tory extensions of copyright protection culminating in the
1998 Copyright Term Extension Act, the American copy-
rights on those final stories (copyrights owned by Doyle’s
estate, the appellant) will not expire until 95 years after the
2                                                  No. 14-1128


date of original publication—between 2018 to 2022, depend-
ing on the original publication date of each story. The copy-
rights on the other 46 stories and the 4 novels, all being
works published before 1923, have expired as a result of a
series of copyright statutes well described in Societe Civile
Succession Guino v. Renoir, 549 F.3d 1182, 1189–90 (9th Cir.
2008).
    Once the copyright on a work expires, the work becomes
a part of the public domain and can be copied and sold
without need to obtain a license from the holder of the ex-
pired copyright. Leslie Klinger, the appellee in this case, co-
edited an anthology called A Study in Sherlock: Stories Inspired
by the Sherlock Holmes Canon (2011)—“canon” referring to the
60 stories and novels written by Arthur Conan Doyle, as op-
posed to later works, by other writers, featuring characters
who had appeared in the canonical works. Klinger’s anthol-
ogy consisted of stories written by modern authors but in-
spired by, and in most instances depicting, the genius detec-
tive Sherlock Holmes and his awed sidekick Dr. Watson.
Klinger didn’t think he needed a license from the Doyle es-
tate to publish these stories, since the copyrights on most of
the works in the “canon” had expired. But the estate told
Random House, which had agreed to publish Klinger’s
book, that it would have to pay the estate $5000 for a copy-
right license. Random House bowed to the demand, ob-
tained the license, and published the book.
    Klinger and his co-editor decided to create a sequel to A
Study in Sherlock, to be called In the Company of Sherlock
Holmes. They entered into negotiations with Pegasus Books
for the publication of the book and W.W. Norton & Compa-
ny for distribution of it to booksellers. Although the editors
No. 14-1128                                                       3


hadn’t finished the book, the companies could estimate its
likely commercial success from the success of its predeces-
sor, and thus decide in advance whether to publish and dis-
tribute it. But the Doyle estate learned of the project and told
Pegasus, as it had told Random House, that Pegasus would
have to obtain a license from the estate in order to be legally
authorized to publish the new book. The estate didn’t
threaten to sue Pegasus for copyright infringement if the
publisher didn’t obtain a license, but did threaten to prevent
distribution of the book. It did not mince words. It told Peg-
asus: “If you proceed instead to bring out Study in Sherlock II
[the original title of In the Company of Sherlock Holmes] unli-
censed, do not expect to see it offered for sale by Amazon,
Barnes & Noble, and similar retailers. We work with those
compan[ies] routinely to weed out unlicensed uses of Sher-
lock Holmes from their offerings, and will not hesitate to do
so with your book as well.” There was also a latent threat to
sue Pegasus for copyright infringement if it published
Klinger‘s book without a license, and to sue Internet service
providers who distributed it. See Digital Millennium Copy-
right Act, 17 U.S.C. § 512(i)(1)(A). Pegasus yielded to the
threat, as Random House had done, and refused to publish
In the Company of Sherlock Holmes unless and until Klinger
obtained a license from the Doyle estate.
   Instead of obtaining a license, Klinger sued the estate,
seeking a declaratory judgment that he is free to use material
in the 50 Sherlock Holmes stories and novels that are no
longer under copyright, though he may use nothing in the 10
stories still under copyright that has sufficient originality to
be copyrightable—which means: at least a tiny bit of origi-
nality, Feist Publications, Inc. v. Rural Telephone Service Co., 499
U.S. 340, 345 (1991) (“at least some minimal degree of crea-
4                                                    No. 14-1128


tivity … the requisite level of creativity is extremely low”);
CDN Inc. v. Kapes, 197 F.3d 1256, 1257, 1259–60 (9th Cir.
1999).
   The estate defaulted by failing to appear or to respond to
Klinger’s complaint, but that didn’t end the case. Klinger
wanted his declaratory judgment. The district judge gave
him leave to file a motion for summary judgment, and he
did so, and the Doyle estate responded in a brief that made
the same arguments for enlarged copyright protection that it
makes in this appeal. The judge granted Klinger’s motion for
summary judgment and issued the declaratory judgment
Klinger had asked for, thus precipitating the estate’s appeal.
     The appeal challenges the judgment on two alternative
grounds. The first is that the district court had no subject-
matter jurisdiction because there is no actual case or contro-
versy between the parties. The second ground is that if there
is jurisdiction, the estate is entitled to judgment on the mer-
its, because, it argues, copyright on a “complex” character in
a story, such as Sherlock Holmes or Dr. Watson, whose full
complexity is not revealed until a later story, remains under
copyright until the later story falls into the public domain.
The estate argues that the fact that early stories in which
Holmes or Watson appeared are already in the public do-
main does not permit their less than fully “complexified”
characters in the early stories to be copied even though the
stories themselves are in the public domain.
    But jurisdiction first. Article III of the Constitution limits
the jurisdiction of federal courts to cases or controversies
(terms that appear to be synonyms), which is to say to actual
legal disputes. It would be very nice to be able to ask federal
judges for legal advice—if I do thus and so, will I be subject
No. 14-1128                                                    5


to being sued and if I am sued am I likely to lose and have to
pay money or even clapped in jail? But that would be advi-
sory jurisdiction, which, though it exists in some states and
foreign countries, see, e.g., Nicolas Marie Kublicki, “An
Overview of the French Legal System From an American
Perspective,” 12 Boston University Int’l L.J. 57, 66, 78–79
(1994), is both inconsistent with Article III’s limitation of
federal jurisdiction to actual disputes, thus excluding juris-
diction over merely potential ones, and would swamp the
federal courts given these courts’ current caseload, either
leaving the judges little if any time for adjudicating disputes
or requiring that judges’ staffs be greatly enlarged.
    So no advisory opinions in federal courts. Declaratory
judgments are permitted but are limited—also to avoid
transgressing Article III—to “case[s] of actual controversy,”
28 U.S.C. § 2201(a), that is, actual legal disputes. Had Klinger
had no idea how the Doyle estate would react to the publica-
tion of In the Company of Sherlock Holmes, he could not have
sought a declaratory judgment, because he would not have
been able to demonstrate that there was an actual dispute.
He could seek advice, but not from a federal judge. But the
Doyle estate had made clear that if Klinger succeeded in get-
ting his book published the estate would try to prevent it
from being sold by asking Amazon and the other big book
retailers not to carry it, implicitly threatening to sue the pub-
lisher, as well as Klinger and his co-editor, for copyright in-
fringement if they defied its threat. The twin threats—to
block the distribution of the book by major retailers and to
sue for copyright infringement—created an actual rather
than merely a potential controversy. This is further shown
by the fact that Klinger could have sued the estate for having
6                                                 No. 14-1128


committed tortious interference with advantageous business
relations by intimidating his publisher.
    So he’s been injured and seeks a judicial declaration that
the conduct by the Doyle estate that caused the injury violat-
ed his legal rights because the threat was based on a ground-
less copyright claim. Only if Klinger obtains the declaration
will he be able to publish his book without having to yield to
what he considers extortion.
     Compare the more common example of a suit by an in-
surance company seeking a judicial declaration that it has no
obligation to defend or indemnify its insured. The company
prefers to seek declaratory relief rather than waiting to be
sued by the insured and defending against the suit because
if it lost that suit it might be ordered to pay punitive damag-
es. This case is similar. Klinger doesn’t want to publish his
book before his controversy with the Doyle estate is re-
solved, for if he does he’ll be facing the prospect not only of
being enjoined from selling the book but also of having to
pay damages if the estate sues him for copyright infringe-
ment and wins. Even if the book’s sales turn out to be mod-
est, and actual damages (as measured by losses of sales by
competing editions licensed by the estate) therefore small,
the estate would be entitled, for each copyrighted work in-
fringed, to up to $30,000 in statutory damages and up to
$150,000 if the court determined that Klinger had infringed
the estate’s copyrights willfully. 17 U.S.C. §§ 504(c)(1), (2).
Anyway he can’t publish his book; his publisher is unwilling
to take a chance on publishing it, given the estate’s threat to
impede distribution. And to be effective and thus harm the
person seeking declaratory relief, a threat need not be a
No. 14-1128                                                    7


threat to sue. See, e.g., MedImmune, Inc. v. Genentech, Inc., 549
U.S. 118, 132 (2007).
    The estate argues that Klinger’s suit is premature (“un-
ripe” in legal jargon), and therefore not yet an actual contro-
versy and so not within the jurisdiction of the federal courts,
for until the book is completed (and thus can be read), how
is one to decide whether it infringes? That would be a good
argument in many cases but not in the present one, because
the only issue presented by Klinger’s quest for a declaratory
judgment is one of law: whether he is free to copy the char-
acters of Holmes and Watson as they are depicted in the sto-
ries and novels of Arthur Conan Doyle that are in the public
domain. To answer that question requires no knowledge of
the contents of the book. A different question is whether the
book will infringe the estate’s unexpired copyrights, and to
answer that question would require knowledge of the con-
tents. But that question is not presented by this suit. Klinger
avers that his book will contain no original and therefore
copyrightable material that appears only in the last ten sto-
ries, which are still under copyright, but only material that
appears in the public-domain works. If he’s lying, the estate
will have a remedy when the book is published. To require
him to defer suit until he finishes the book would gratui-
tously discourage declaratory-judgment suits by authors and
publishers threatened with suits for copyright infringement
or with boycotts by distributors—and so would discourage
authors from ever writing such works in the first place.
   There is still another jurisdictional wrinkle. Apparently
because of a mislabeling of certain exhibits, the district judge
was under the impression that Klinger’s suit was challeng-
ing the copyrights on the ten stories published after 1922,
8                                                  No. 14-1128


and so he denied summary judgment insofar as those stories
were concerned. That makes it seem as if there were no final
judgment in the district court, in which event we would not
have jurisdiction of the appeal, as there is no suggestion that
there is any basis for an interlocutory appeal. The plaintiff
claims, however, not to be challenging the copyrights on the
last ten stories. And the claim is correct, for he acknowledges
that those copyrights are valid and that the only copying he
wants to include in his book is copying of the Holmes and
Watson characters as they appear in the earlier stories and in
the novels. The summary judgment ruling on the last ten
stories was a mistake, and can be ignored. Nothing remains
in the district court. The declaratory judgment issued by the
district judge, limited entirely to the earlier works, ended the
litigation in that court.
    So the judge was right to assert (and retain) jurisdiction
over the case, and we come to the merits, where the issue as
we said is whether copyright protection of a fictional charac-
ter can be extended beyond the expiration of the copyright
on it because the author altered the character in a subse-
quent work. In such a case, the Doyle estate contends, the
original character cannot lawfully be copied without a li-
cense from the writer until the copyright on the later work,
in which that character appears in a different form, expires.
    We cannot find any basis in statute or case law for ex-
tending a copyright beyond its expiration. When a story falls
into the public domain, story elements—including charac-
ters covered by the expired copyright—become fair game for
follow-on authors, as held in Silverman v. CBS Inc., 870 F.2d
40, 49–51 (2d Cir. 1989), a case much like this one. At issue
was the right to copy fictional characters (Amos and Andy)
No. 14-1128                                                 9


who had appeared in copyrighted radio scripts. The copy-
rights covered the characters because they were original. As
in this case the characters also appeared in subsequent radio
scripts that remained under copyright, though the copy-
rights on the original scripts in which the characters had ap-
peared had expired. The court ruled that “a copyright af-
fords protection only for original works of authorship and,
consequently, copyrights in derivative works secure protec-
tion only for the incremental additions of originality con-
tributed by the authors of the derivative works.” Id. at 49;
see Leslie A. Kurtz, “The Methuselah Factor: When Charac-
ters Outlive Their Copyrights,” 11 U. Miami Entertainment &
Sports L. Rev. 437, 447–48 (1994). The copyrights on the de-
rivative works, corresponding to the copyrights on the ten
last Sherlock Holmes stories, were not extended by virtue of
the incremental additions of originality in the derivative
works.
    And so it is in our case. The ten Holmes-Watson stories
in which copyright persists are derivative from the earlier
stories, so only original elements added in the later stories
remain protected. Id. at 49–50. The “freedom to make new
works based on public domain materials ends where the re-
sulting derivative work comes into conflict with a valid cop-
yright,” Warner Bros. Entertainment, Inc. v. X One X Produc-
tions, 644 F.3d 584, 596 (8th Cir. 2011)—as Klinger acknowl-
edges. But there is no such conflict in this case.
   Lacking any ground known to American law for assert-
ing post-expiration copyright protection of Holmes and
Watson in pre-1923 stories and novels going back to 1887,
the estate argues that creativity will be discouraged if we
don’t allow such an extension. It may take a long time for an
10                                                No. 14-1128


author to perfect a character or other expressive element that
first appeared in his early work. If he loses copyright on the
original character, his incentive to improve the character in
future work may be diminished because he’ll be competing
with copiers, such as the authors whom Klinger wishes to
anthologize. Of course this point has no application to the
present case, Arthur Conan Doyle having died 84 years ago.
More important, extending copyright protection is a two-
edged sword from the standpoint of inducing creativity, as it
would reduce the incentive of subsequent authors to create
derivative works (such as new versions of popular fictional
characters like Holmes and Watson) by shrinking the public
domain. For the longer the copyright term is, the less public-
domain material there will be and so the greater will be the
cost of authorship, because authors will have to obtain li-
censes from copyright holders for more material—as illus-
trated by the estate’s demand in this case for a license fee
from Pegasus.
    Most copyrighted works include some, and often a great
deal of, public domain material—words, phrases, data, en-
tire sentences, quoted material, and so forth. The smaller the
public domain, the more work is involved in the creation of
a new work. The defendant’s proposed rule would also en-
courage authors to continue to write stories involving old
characters in an effort to prolong copyright protection, ra-
ther than encouraging them to create stories with entirely
new characters. The effect would be to discourage creativity.
     The estate offers the hypothetical example of a mural that
is first sketched and only later completed by being carefully
painted. If the sketch is allowed to enter the public domain,
there to be improved by creative copiers, the mural artist
No. 14-1128                                                 11


will have a diminished incentive to perfect his mural. True;
but other artists will have a greater incentive to improve it,
or to create other works inspired by it, because they won’t
have to pay a license fee to do so provided that the copyright
on the original work has expired.
    The estate asks us to distinguish between “flat” and
“round” fictional characters, potentially a sharper distinction
than the other one it urges (as we noted at the beginning of
this opinion), which is between simple and complex. Re-
peatedly at the oral argument the estate’s lawyer dramatized
the concept of a “round” character by describing large circles
with his arms. And the additional details about Holmes and
Watson in the ten late stories do indeed make for a more
“rounded,” in the sense of a fuller, portrayal of these charac-
ters. In much the same way we learn things about Sir John
Falstaff in Henry IV, Part 2, in Henry V (though he doesn’t ac-
tually appear in that play but is merely discussed in it), and
in The Merry Wives of Windsor, that were not remarked in his
first appearance, in Henry IV, Part 1. Notice also that Henry
V, in which Falstaff is reported as dying, precedes The Merry
Wives, in which he is very much alive. Likewise the ten last
Sherlock Holmes stories all are set before 1914, which was
the last year in which the other stories were set. One of the
ten, The Adventure of the Veiled Lodger (published in 1927), is
set in 1896. See 2 William S. Baring-Gould, The Annotated
Sherlock Holmes 453 (1967). Thus a more rounded Holmes or
Watson (or Falstaff) is found in a later work depicting a
younger person. We don’t see how that can justify extending
the expired copyright on the flatter character. A contempo-
rary example is the six Star Wars movies: Episodes IV, V, and
VI were produced before I, II, and III. The Doyle estate
would presumably argue that the copyrights on the charac-
12                                                No. 14-1128


ters as portrayed in IV, V, and VI will not expire until the
copyrights on I, II, and III expire.
   The estate defines “flat” characters oddly, as ones com-
pletely and finally described in the first works in which they
appear. Flat characters thus don’t evolve. Round characters
do; Holmes and Watson, the estate argues, were not fully
rounded off until the last story written by Doyle. What this
has to do with copyright law eludes us. There are the early
Holmes and Watson stories, and the late ones, and features
of Holmes and Watson are depicted in the late stories that
are not found in the early ones (though as we noted in the
preceding paragraph some of those features are retrofitted to
the earlier depictions). Only in the late stories for example
do we learn that Holmes’s attitude toward dogs has
changed—he has grown to like them—and that Watson has
been married twice. These additional features, being (we
may assume) “original” in the generous sense that the word
bears in copyright law, are protected by the unexpired copy-
rights on the late stories. But Klinger wants just to copy the
Holmes and the Watson of the early stores, the stories no
longer under copyright. The Doyle estate tells us that “no
workable standard exists to protect the Ten Stories’ incre-
mental character development apart from protecting the
completed characters.” But that would be true only if the
early and the late Holmes, and the early and the late Watson,
were indistinguishable—and in that case there would be no
incremental originality to justify copyright protection of the
“rounded” characters (more precisely the features that
makes them “rounder,” as distinct from the features they
share with their earlier embodiments) in the later works.
No. 14-1128                                                   13


   It’s not unusual for an author to use the same character in
successive works, yet with differences resulting, in the sim-
plest case, just from aging. In Shakespeare’s two Henry IV
plays, the Henry who later becomes Henry V is the Prince of
Wales, hence Crown Prince of England; in Henry V he is the
King of England. Were Henry IV in the public domain and
Henry V under copyright, Henry Prince of Wales could be
copied without Shakespeare’s permission but not Henry V.
Could the Doyle estate doubt this? Could it think Holmes a
more complex and altered character than Henry?
    The more vague, the less “complete,” a character, the less
likely it is to qualify for copyright protection. An author
“could not copyright a character described merely as an un-
expectedly knowledgeable old wino,” but could copyright
“a character that has a specific name and a specific appear-
ance. Cogliostro’s age, obviously phony title (‘Count’), what
he knows and says, his name, and his faintly Mosaic facial
features combine to create a distinctive character. No more is
required for a character copyright.” Gaiman v. McFarlane, 360
F.3d 644, 660 (7th Cir. 2004); see also Nichols v. Universal Pic-
tures Corp., 45 F.2d 119, 121 (2d Cir. 1930) (L. Hand, J.). From
the outset of the series of Arthur Conan Doyle stories and
novels that began in 1887 Holmes and Watson were distinc-
tive characters and therefore copyrightable. They were “in-
complete” only in the sense that Doyle might want to (and
later did) add additional features to their portrayals. The re-
sulting somewhat altered characters were derivative works,
the additional features of which that were added in the ten
late stories being protected by the copyrights on those sto-
ries. The alterations do not revive the expired copyrights on
the original characters.
14                                                No. 14-1128


    We can imagine the Doyle estate being concerned that a
modern author might write a story in which Sherlock
Holmes was disparaged (perhaps by being depicted as a
drug dealer—he was of course a cocaine user—or as an idiot
detective like Inspector Clouseau of the Pink Panther mov-
ies), and that someone who read the story might be deterred
from reading Doyle’s Sherlock Holmes stories because he
would realize that he couldn’t read them without puzzling
confusedly over the “true” character of Sherlock Holmes.
The analogy would be to trademark dilution, see, e.g., Hyatt
Corp. v. Hyatt Legal Services, 736 F.2d 1153, 1157–59 (7th Cir.
1984), as if a hot-dog stand advertised itself as “The Rolls-
Royce Hot-Dog Stand.” No one would be confused as to
origin—Rolls-Royce obviously would not be the owner. Its
concern would be that its brand would be diminished by be-
ing linked in people’s involuntary imagination to a hot-dog
stand; when they thought “Rolls-Royce,” they would see the
car and the hot-dog stand—an anomalous juxtaposition of
high and low. There is no comparable doctrine of copyright
law; parodies or burlesques of copyrighted works may or
may not be deemed infringing, depending on circumstances,
see Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 580–81
and n. 14, 588, 591 (1994), but there is no copyright infringe-
ment of a story or character that is not under copyright. An-
yway it appears that the Doyle estate is concerned not with
specific alterations in the depiction of Holmes or Watson in
Holmes-Watson stories written by authors other than Arthur
Conan Doyle, but with any such story that is published
without payment to the estate of a licensing fee.
   With the net effect on creativity of extending the copy-
right protection of literary characters to the extraordinary
lengths urged by the estate so uncertain, and no legal
No. 14-1128                                                    15


grounds suggested for extending copyright protection be-
yond the limits fixed by Congress, the estate’s appeal bor-
ders on the quixotic. The spectre of perpetual, or at least
nearly perpetual, copyright (perpetual copyright would vio-
late the copyright clause of the Constitution, Art. I, § 8, cl. 8,
which authorizes copyright protection only for “limited
Times”) looms, once one realizes that the Doyle estate is
seeking 135 years (1887–2022) of copyright protection for the
character of Sherlock Holmes as depicted in the first Sher-
lock Holmes story.
                                                      AFFIRMED.
