What does this mean for new stories that use the Sherlock Holmes character, and of course Dr. Watson and the other recurring characters? Are authors free to write such stories, since the Holmes character is in the public domain, having first been defined in 1887? Are they not free to write the stories, since some more details were added to Holmes’s character as late as 1927? Or is the answer something in between?
The Seventh Circuit says “in between”: people are now free to publish works that use those creative attributes of the Holmes character that appear in the pre-1923 stories, but not works that also use creative attributes of the Holmes character — whether elements of his life, or traits of his character — that appear in the 1923 to 1927 stories. For instance, according to the court, “Only in the late stories … do we learn that Holmes’s attitude toward dogs has changed — he has grown to like them — and that Watson has been married twice.” If enough such late-added elements are used, that would infringe the copyright in the late stories. But if only the pre-1923 elements are used (or maybe just the pre-1923 elements plus one or two minor details from the 1923-to-1927 stories), then there’s no infringement.
This seems to me (as someone who taught copyright for about 10 years) to be perfectly sound copyright logic, though I can’t speak to how intuitive that is to others. The Copyright Act doesn’t protect characters as such; it protects, among other things, literary works, and protects them not just from literal copying but also from copying of creative expression embodied in those works. And that creative expression can include details of characters as well as details of plot. (Indeed, it would be hard to distinguish the two.) Just as a sequel (or a similar work) can infringe the original by copying enough plot elements, so it can infringe the original by copying enough character elements.
Conversely, once a work is in the public domain, all its elements can be copied without violating copyright, and this includes character details. Sherlockiana authors are thus free to use most of Holmes — but not all of him.