According to The Hollywood Reporter (and who could provide better counsel about an intellectual property dispute between the Philadelphia Phillies and Harrison/Erickson Inc., the design firm that created the Original Philly Phanatic, than the Hollwood Reporter?), the design firm has a right to:
reclaim rights to the original Phanatic and [to] preclude the team from challenging the validity of the copyright.
But,
In another part of the report, [Magistrate Judge Sarah] Netburn looks at the recent alterations that the team made to the mascot and examines something called the Copyright Act’s “Derivative Works Exception,” which basically allows the copyright holder to continue to use amended versions even past termination.
Says Judge Netburn:
“To be sure, the changes to the structural shape of the Phanatic are no great strokes of brilliance, but as the Supreme Court has already noted, a compilation of minimally creative elements, ‘no matter how crude, humble or obvious,’ can render a work a derivative,”
In Layman’s Terms – The Designers of the the Original Phanatic are screwed.
However, if they choose to, Harrison/Erickson could file an objection to Judge Netburn’s ruling in U.S. District Court.