infringement can occur even if consumers don’t remember it

Beastie Boys v. Monster Energy Co., No. 12 Civ. 6065 (SDNY Mar. 18, 2014)

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, 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 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 , 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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