U.S. Magistrate Judge Sarah Netburn recommended that the team should be able to keep using the updated-look Phanatic mascot.
It comes after the mascot's creators tried to reclaim the Phanatic's copyright after 35 years.
Bonnie Erickson and Wayde Harrison registered the copyright in 1979 and licensed the Phanatic to the Phillies in 1984.
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Last year, the artists say they were in the middle of negotiations with the team when the Phillies suddenly sued.
In a statement to Action News, the artists say they're incredibly disappointed and that "At the Phillies request more than 40 years ago, we created the Phanatic, giving him a story and a life. Over the decades since, we have taken care of him, even patching him back together when he needed it. While we very much want the Phanatic to remain the Phillies mascot, we will not yield to this lawsuit tactic."
At the heart of the copyright dispute, the Phillies say in their suit, the mascot was their idea and that Harrison/ Erickson just executed it.
The Phillies made modifications to the Phantic's look in 2019. It now features feathers rather than fur-colored arms, stars outlining the eyes, a powder blue tail, and new socks and shoes.
Judge Netburn says those changes -- under the Derivative Works Exception -- should allow the Phillies to keep its mascot.
"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," Netburn wrote in the filing.
Both sides have 14 days to file objections to Netburn's ruling. Judge Victor Marrero is presiding over the case.