On December 26, 2013, a U.S. Federal Court issued a ruling about copyright protection in Sherlock Holmes and the Sherlock Holmes stories. The court held that all elements of the Holmes canon that were first introduced before 1923 -- including the characters of Holmes and Watson -- are in the public domain.
As background: In most of the world, copyright protection has expired in all of Arthur Conan Doyle's Sherlock Holmes canon. This means that in most of the world, Sherlock Holmes, and all of Conan Doyle's stories, are in the public domain and anyone can use them without getting permission. But in the United States, thanks to the Sonny Bono Copyright Extension Act, the last ten Sherlock Holmes stories -- those that were first published after 1923 -- are still protected by copyright. Those copyrights are owned by a company called The Conan Doyle Estate, Ltd. (the "CDE.") The CDE has licensed that copyright to a number of creators who have made recent adaptations of Sherlock Holmes, including Warner Brothers (for the Downey films), CBS-TV (for Elementary), and WGBH (the U.S. distributor of BBC Sherlock). It has also sent "cease and desist" letters to others who have sought to make commercial adaptations of the Canon -- and those letters haven't necessarily distinguished between adaptations of the works still in copyright and those on whom copyright has expired.
One of those "cease and desist" letters went to Leslie Klinger, a Holmes expert and the author of The New Annotated Sherlock Holmes, who together with author Laurie R. King was preparing to publish an anthology of stories inspired by the Holmes Canon. Klinger fired back, bringing a lawsuit against the CDE, seeking declaratory judgment and claiming the copyright had expired on all of the story elements that Klinger and King wanted to include in the anthology.
Now, the court has issued a ruling in Klinger's case. The Court’s ruling states, in brief, that all characters and story elements first introduced before 1923 -- including the characters of Holmes and Watson -- are in the public domain, and creators are free to use them without licensing them from the Conan Doyle Estate. The Court cautioned that copyright law still protects elements that appear exclusively in the ten post-1922 stories by Conan Doyle (those that remain in copyright). The CDE has stated that it's considering appealing the ruling, so it's possible that the ruling isn't the final judicial word on this matter.
In the meantime, what does this ruling mean for U.S. fans of Sherlock Holmes? The case is a victory for Klinger and great news for those who want to commercialize Holmes adaptations, but its impact on fans is, largely, an indirect one. Fans have always relied on fair use principles to support the creation of fanworks. That's still true for most fanworks related to Holmes--copyright not only still protects the post-1923 works, but also (obviously) the sources for many Holmes fandoms, such as the Warner Brothers Holmes, Elementary, and BBC Sherlock. But the fact that the original-recipe Holmes and Watson are in the public domain is still good for fandom: Since most of the traits of Holmes and Watson, and most of the stories, were introduced before 1923, fan creators will seldom have to wonder whether their Doyle Canon fanworks are fair use. And beyond that, it means that the CDE will have a harder time trying to charge licensing fees to commercial adapters of Holmes and Watson. This makes it easier for commercial adaptations to flourish, so in the future, that may mean more Holmes fandoms to draw from!
The case also has broader implications for U.S. copyright in serialized works. Many now-famous characters were introduced in series that started in the early 20th century, but continued for decades or more after then. This ruling establishes the principle that all of those characters have the public domain more quickly than some had originally thought: once copyright protection expires in the works where those characters were thoroughly introduced, those characters enter the public domain--even if some works featuring those characters (and any new facts about them introduced in the new works) remain protected. This is true not only for Holmes, but also a number of other characters introduced early in the 20th century, such as G.K. Chesterton's Father Brown, Edgar Rice Burroughs' Tarzan, and Agatha Christie's Hercule Poirot...and, notably, Disney's Mickey Mouse.
For more on this case, and to get a copy of the court's full ruling, see http://free-sherlock.com/.