Right of Publicity

Factors Etc. v. Pro Arts: When an Exclusive Elvis License Outlived the Right It Licensed

The Second Circuit first upheld, then withdrew, an exclusive licensee's power to enforce Elvis Presley's posthumous identity — a whiplash that exposed how fragile a celebrity-estate license is when the underlying right depends on an unsettled state law.

February 10, 2025
Stacks of celebrity memorabilia posters in a warehouse
A licensing chain is only as durable as the descendible right at the top of it. Shutterstock
Educational content, not legal advice. This article explains general legal concepts. It does not create an attorney–client relationship. For your specific situation, consult a licensed attorney.

Three days after Elvis Presley died on August 16, 1977, Pro Arts, Inc. bought rights to a photograph of the singer, printed it under the words “IN MEMORY,” and shipped the poster to retailers. Factors Etc., Inc. — which held what it described as the exclusive worldwide license to commercially exploit Presley’s name and likeness, acquired through Boxcar Enterprises — sued to stop it. The litigation that followed, Factors Etc., Inc. v. Pro Arts, Inc., became the canonical study of a celebrity-estate license: not because the licensee won, but because it won and then lost the same right in the same court within three years. The United States Court of Appeals for the Second Circuit first affirmed Factors’ injunction in an opinion by Judge Joe McDonald Ingraham, No. 77-7544 (2d Cir. June 27, 1978), then reversed course in an opinion by Judge Jon O. Newman, No. 503, Docket 80-7692 (2d Cir. June 29, 1981). The two decisions, read together, are a primer on what a license to a dead celebrity’s identity is actually worth.

At a glance

  • Case: Factors Etc., Inc. v. Pro Arts, Inc.
  • First decision: No. 77-7544 (2d Cir. June 27, 1978), Ingraham, J. — affirming a preliminary injunction for Factors
  • Second decision: No. 503, Docket 80-7692 (2d Cir. June 29, 1981), Newman, J. (Mansfield, J., dissenting) — reversing and dissolving the injunction
  • Chain of title: Presley assigned exploitation rights to Boxcar Enterprises during his life; Boxcar licensed Factors
  • 1978 holding: Because Presley exploited his identity commercially during life through Boxcar, the right of publicity survived his death and passed as transferable property; the “IN MEMORY” memorial poster was not privileged as newsworthy
  • 1981 holding: Deferring to the Sixth Circuit’s reading of Tennessee law, the court concluded Boxcar had no descendible right to convey after Presley’s death, so Factors had nothing to enforce
  • Why it matters: An exclusive license to a celebrity’s posthumous identity is only as good as the state-law right at the top of the chain — and that right was, at the time, unsettled

The 1978 decision: a license that looked airtight

Factors arrived in court with what looked like an exemplary chain of title. Presley, through his manager Colonel Tom Parker, had channeled the commercial exploitation of his name and image into Boxcar Enterprises, a Tennessee corporation, during his lifetime. After his death, Boxcar granted Factors an exclusive license. When Pro Arts rushed its memorial poster to market, Factors had a clean story to tell: a living celebrity who had treated his identity as a business asset, a corporate vehicle that held that asset, and a licensee that had paid for the exclusive right to enforce it.

Judge Ingraham’s panel embraced that story. Applying what it understood to be the governing law, the court reasoned that because Presley had assigned an exclusive property right to Boxcar during his lifetime, the right functioned like any other transferable intangible. Death did not extinguish it. As the court framed it, the income interest in Presley’s identity “should inure to Presley’s estate at death like any other intangible property right.” The descendibility of the right turned, in the court’s view, on the fact that Presley had exploited it while alive — the asset existed, had been commercialized, and therefore had something to pass.

The panel also disposed of Pro Arts’ First Amendment defense. Pro Arts argued that a poster commemorating the death of a global icon was protected commentary on a newsworthy event. The court rejected the framing. Slapping “IN MEMORY” across a photograph did not transform a piece of merchandise into journalism or political satire; the poster was a product sold to capitalize on Presley’s identity, not reportage about his death. That distinction — between exploiting an identity and commenting on a public event — remains one of the most-cited contributions of the 1978 opinion.

The 1981 reversal: the right evaporates beneath the license

The license that looked airtight in 1978 sprang a leak from an unexpected direction. The descendibility of Presley’s right of publicity was a question of state law, and the relevant state was Tennessee, Presley’s domicile. Neither the Tennessee legislature nor its highest court had squarely answered whether the right survived death. In the interval, the United States Court of Appeals for the Sixth Circuit — whose jurisdiction includes Tennessee — confronted the same Tennessee-law question in separate Presley litigation and concluded that Tennessee recognized no descendible right of publicity.

That left the Second Circuit in an awkward posture: it had predicted Tennessee law one way, and the circuit that actually sits over Tennessee had predicted it the other. In the 1981 decision, Judge Newman’s majority chose deference. When a federal court must apply the law of a state located in another circuit, and that other circuit has spoken to an unsettled question of that state’s law, the deciding court should generally follow the home circuit’s reading rather than substitute its own. Applying that principle, the Second Circuit held that “after Presley’s death, Boxcar had no right of publicity in Presley’s name and likeness to convey to Factors.” The injunction was reversed and dissolved.

Judge Mansfield dissented. He argued that the Sixth Circuit’s prediction lacked any actual foundation in Tennessee authority and that the Second Circuit should reach its own conclusion on the merits rather than defer to a guess. The disagreement is itself instructive: even the judges could not agree on what Tennessee law was, which is precisely the risk a licensee underwrites when it builds a business on an unadjudicated state right.

What collapsed — and what did not

It is important to be precise about what the 1981 reversal did and did not establish. It did not announce a general rule that the right of publicity dies with the celebrity; it held only that, on the court’s chosen reading of Tennessee law at that moment, Boxcar held no descendible right to license. Tennessee later enacted a robust statutory right of publicity that is expressly descendible, and Presley’s estate went on to build one of the most valuable identity-licensing operations in the world. The Factors whiplash is therefore not a verdict on Elvis’s commercial legacy. It is a snapshot of a transitional era in which the law of posthumous identity was being written case by case, and a licensee was caught in the gap.

What collapsed was the enforceability of a specific license at a specific time, defeated not by any flaw in the contract between Boxcar and Factors but by the absence of a settled property right for that contract to convey. The licensing documents were sound. The asset underneath them was contingent.

Open questions

The two Factors opinions leave several issues unresolved. They do not decide how a licensee should be protected when it pays for an exclusive right that a later court holds never existed — whether through warranties, indemnities, or restitution against the licensor. They do not address the choice-of-law mechanics when a celebrity is domiciled in one state, the licensee operates in another, and the infringement occurs nationwide; the decisions assume Tennessee law governs without exhaustively justifying that premise against competing approaches. Nor do they resolve the tension the dissent identified: how much deference one circuit owes another circuit’s prediction of a third sovereign’s unsettled law, especially where, as here, the prediction may rest on thin authority. Finally, the newsworthiness holding leaves a soft boundary — the line between a merchandised “memorial” and genuine commentary on a public figure’s death is drawn by degree, not by rule.

Implications

  • Diligence runs to the right, not just the paperwork. Before paying for an exclusive celebrity license, counsel must confirm that the underlying right of publicity actually exists and is descendible under the governing state’s law — a clean contract over a contingent asset is a contingent license.
  • Domicile selects the governing law, and the home circuit’s reading can control. A celebrity’s state of domicile can determine descendibility, and a federal court may defer to the interpretation of the circuit that sits over that state.
  • Unsettled state law is a live business risk. Building a licensing program on a question no state court has answered means the program can be dissolved by a single appellate prediction.
  • Allocate the risk by contract. Representations, warranties, and indemnities about the existence and descendibility of the right — and remedies if a court later finds it absent — belong in every celebrity-estate license.
  • Newsworthiness is a narrow privilege. Labeling merchandise as a tribute does not convert commercial exploitation into protected commentary.

Frequently asked questions

Did Factors ultimately own the right to license Elvis Presley’s image? On the 1981 decision, no — the Second Circuit held that, under its reading of Tennessee law at the time, Boxcar had no descendible right to convey to Factors, so the license was unenforceable as to the claims at issue. Tennessee later recognized a descendible statutory right, and Presley’s estate built a major licensing business, but that came after and apart from the Factors holdings.

Why did the same court reach opposite results three years apart? The descendibility of the right was a question of Tennessee law that no Tennessee court had settled. After the 1978 affirmance, the Sixth Circuit (which covers Tennessee) read Tennessee law to deny a descendible right. In 1981 the Second Circuit deferred to that reading and reversed itself.

What made the “IN MEMORY” poster unprotected by the First Amendment? The 1978 court treated the poster as merchandise that exploited Presley’s identity, not as news coverage or commentary on a newsworthy event. The memorial caption did not transform a commercial product into protected speech.

Authorities and sources