The Beastie Boys sued for copyright infringement and
trademark infringement based on Monster’s allegedly unauthorized use of Beastie
Boys music to accompany a video promoting a Monster-sponsored snowboarding
competition. Here, the court takes care of some pretrial matters relating to
both sets of claims.
First, the court excluded evidence of two videos/sets of
videos that allegedly infringed Beastie Boys copyrights and for which Monster
was allegedly responsible. One instance
involved videos posted by athletes sponsored by Monster to monsterarmy.com, a
website Monster created to promote the athletes and Monster. Monster encouraged sponsored athletes to post
videos, but didn’t create or edit the videos.
Six videos allegedly synchronized Beastie Boys music to film of the
athletes performing. Another video using
a Beastie Boys song was created in connection with a sporting event that
Monster sponsored and promoted; the Beastie Boys alleged that Monster “was
aware of the [video] while it was being produced” and participated in its
production.
The Beastie Boys sought to offer these to establish that
Monster’s alleged infringement was willful and not negligence or based on a
good faith but mistaken belief, “based on communications between Monster
employee Nelson Phillips and disk jockey Z-Trip, that it had a valid license to
make such use of the Beastie Boys’ music.” The court found that the probative
value was outweighed by the prejudicial effect. The probative value of the
other videos was limited; the Beastie Boys didn’t explain why those incidents
shed light on Monster’s state of mind with respect to the video here. Unlike the video in suit, these videos weren’t
created by Monster, and there was no allegation that the Monster personnel at
issue here played any role in the other incidents; that the unauthorized use
resulted from similar control deficiencies internal to Monster; that Monster
had a practice of using Beastie Boys or other music to promote its products
without regard to legality; etc. The
episode at issue here “appears to be an idiosyncratic, singular event, as do,
for that matter, the episodes leading to the creation and posting of the other
two videos or sets of videos.”
The “faint” probative value here was dwarfed by the risk of
unfair prejudice, confusion, and delay. To establish that the other videos
infringed and that Monster could be tied to them in a way that would support a
willfulness finding would require a mini-trial for each. “Presentation of the
proof as to the other two episodes at trial could easily take much more time
than the proof as to the [video in suit], particularly insofar as the Monster
Army Videos were made by six separate athletes. Under these circumstances,
admission of evidence of these other videos would present a substantial risk of
trial delay and confusion, and the jury could well lose focus on the distinct
episode at issue in this case.” The
Beastie Boys had no demonstrated plans to “thoughtfully litigate” the facts and
context of the other videos, such as calling the athletes who created the
Monster Army videos as witnesses. They
apparently just wanted to introduce the “bare fact” of these other videos, then
argue to the jury that the videos infringed and that Monster’s conduct was
therefore willful. This “clipped”
presentation would limit the delay occasioned by the evidence, but only “at
grave risk to the truthseeking process.”
The court did grant the Beastie Boys leave to add a claim of
infringement of an additional, fifth song based on evidence found in discovery,
almost 2 years after the case began.
Though the issue was close, the court found that the Beastie Boys acted
with sufficient diligence in pursuing this claim, given that Monster suffered
no prejudice from the timing. Also,
though the Beastie Boys acquired an interest in this sound recording only after
they filed the complaint, they were assigned the right to sue for accrued
infringement.
The court mostly denied the Beastie Boys’ motion to exclude
the testimony of Monster’s marketing expert Erich Joachimsthaler, in the
process reaffirming that infringement has been completely detached from
harm. Joachimsthaler’s testimony was
about (1) “the likelihood of a consumer association between the Monster brand
and the Beastie Boys as a result of watching” the Video; and (2) the impact on,
and the value of the Video to, the Monster brand. Joachimsthaler opined that
the video didn’t transfer any association between the parties into consumers’
long-term memory, because the video wasn’t itself memorable or part of a
sustained ad campaign that would tend to associate them. The court found that
this testimony rested on a reliable foundation—“academic research concerning
the circumstances under which consumers remember advertisements.” While the
Beastie Boys argued that this research was too general, that went beyond
admissibility and could be tested by cross-examination and competing evidence.
The court found this testimony relevant to the issue of
actual damages, and to recovery of Monster’s profits. It could also be relevant to statutory
damages to the extent they were measured based on Monster’s profits.
However, the court found that Joachimsthaler’s “likelihood
of association” testimony, as formulated, might confuse or mislead the jury as
to Lanham Act liability. Likelihood of association
was not likelihood of confusion (wait for it!).
“‘Confusion’ refers to a viewer’s reaction upon seeing an advertisement,
while ‘association’ relates to the durability of that reaction. An
advertisement can be confusing without being memorable; a defendant does not
escape liability under the Lanham Act merely because his advertisement is not
memorable.” Sigh. Once again, harm/materiality takes a
hammering because the claim is §43(a)(1)(A) and not §43(a)(1)(B), for no good
reason. Anyhow, the court wouldn’t allow
Joachimsthaler to testify about likelihood of confusion, and would instruct the
jury that his testimony was relevant solely to damages.
Joachimsthaler also proposed to testify on the Video’s
impact on and value to the Monster brand. This was plainly relevant to Monster’s
profits, and thus to statutory damages.
The Beastie Boys objected that his methodology was “nonrandom” and
“unscientific.” The court mostly
disagreed—his experience and research in marketing qualified him to opine on
these matters, even without constructing a formal model. “Technical . . . or other specialized
knowledge,” may be relevant and reliable, and therefore admissible under Daubert, “even if the field of
knowledge, be it marketing or plumbing, does not readily lend itself to a
formal or quantitative methodology.” But one aspect of the testimony was “plainly
unreliable.” He stated that he obtained
expertise about consumer perceptions of Monster’s brand by “ask[ing] people in
my office . . . [who] have an age range from 18 to 55 . . . to help me
understand the Monster Energy brand.” This was “unreliable and blatantly non-rigorous,”
and indeed didn’t pass the laugh test.
As he had been in a previous case, Joachimsthaler was precluded from
offering expert testimony that recited or relied on his conversations with
co-workers.
On to damages: In the Second Circuit, until 1999, the
longstanding common law rule prevailed: to prove liability and obtain
injunctive relief under the Lanham Act, a plaintiff need only show a likelihood
of confusion, but to obtain monetary relief he or she was required to show
either (1) actual confusion; or (2) bad faith, meaning intentional deception or
willfulness. In 1999, however, Congress
amended 15 U.S.C. § 1117, the provision of the Lanham Act which provides for
damages, to state that damages may be obtained for willful violations of § 1125(c) (dilution). Judges have disagreed
about whether adding a specific reference to a willfulness requirement for
dilution damages altered the common law rule that actual confusion or
willfulness was required for confusion damages.
Some cases, including in the Third Circuit, have held that the plain
language abrogated the prior rule, applying the canon that when Congress uses
particular language in one section of a statute but omits it in another, it’s
generally presumed that Congress acted intentionally. But a number of judges in
the Second Circuit have disagreed: because Congress is assumed to have been
aware of existing law when it passes or amends legislation, and because it did
not expressly change the requirements for damages under § 1125(a), the old rule
about confusion damages should stay the same.
Plus, the legislative history and headings of the dilution amendment
indicate that Congress was only concerned about dilution, not §1125(a), when it
added that language. The court here agreed with the latter view. Thus, to
receive damages under the Lanham Act, the Beastie Boys would have to prove
actual confusion or intentional deception.
For a profits award, the Beastie Boys would have to prove willful
infringement.
Also, Monster argued that the Beastie Boys only owned 50% of
each copyright and had to limit their recovery accordingly. The court agreed
with the Beastie Boys that their 50% interest wasn’t relevant to the jury’s
damages calculation. Any award would simply
have to be discounted, if not already reflected in the jury’s award.
The court also rejected Monster’s argument that the Beastie
Boys were entitled to only one award of statutory damages per work, because “[w]here
the same plaintiff owns both the musical composition copyright and the sound
recording copyright, awarding damages on a per work—or per song—basis is
appropriate.” The court found Monster’s factual predicate to be wrong: Monster
hadn’t challenged the Beastie Boys’ assertion that the sound recording
copyrights were owned by one entity but the musical composition copyrights were
owned by another. Monster could attempt
to show that the parties were so closely affiliated as to be considered one
company for statutory damages purposes.
Note: I haven’t looked up the case law, but I don’t see why
separate ownership matters: the statute says “the copyright owner may elect …
an award of statutory damages for all infringements involved in the action,
with respect to any one work …. For
the purposes of this subsection, all the parts of a compilation or derivative
work constitute one work” (emphasis added).
Since it’s common to have separate ownership for contributions to
compilations and the compilations themselves, or for underlying works and
derivative works, this last sentence seems clearly to contemplate that there
will be multiple copyright owners whose rights are infringed, but only one
award of statutory damages. I imagine
the argument to the contrary is predicated on the phrase “the copyright owner,”
but singular usually means plural too in these situations.
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