Launching an advertisement, production, or publication without obtaining the necessary third-party intellectual property (IP) rights can have costly consequences. A jury recently awarded the Beastie Boys and related plaintiffs $1.7 million in a lawsuit against Monster Energy for using Beastie Boys music and references to the Beastie Boys without proper permission.
Background
Monster Energy ran a promotional video on its website that used
portions of five Beastie Boys songs as the soundtrack and included
other references to the group. The remix of Beastie Boys songs used
in the video came from a DJ using the name "Z-Trip" who
had a 2011 agreement with the Beastie Boys to create the remix and
use it as a free promotional item. Z-Trip did not have the right to
sell or license the remix, or to authorize third parties to use
it.
In 2012, Monster Energy used Z-Trip's remix in its promotional
video, and a Monster Energy employee sent the video to Z-Trip for
review. He responded "Dope," and Monster Energy later
claimed it believed Z-Trip granted Monster Energy the necessary
rights to use the remix in its video. However, Monster Energy never
obtained authorization from the actual rights-holders to the
musical compositions or the sound recordings.
The jury found Monster Energy's actions to be willful copyright
infringement as well as a false endorsement under the Lanham Act
and awarded $1.7 million in damages. The court recently denied
Monster Energy's post-trial motions for judgment as a matter of
law, a new trial, and a reduction in damages.
Copyright Infringement
In a lengthy opinion and order denying Monster Energy's
post-trial motions, the court made a number of findings regarding
Monster Energy's copyright infringement. The court found that
the jury had sufficient circumstantial evidence of Monster
Energy's "reckless disregard" of the possibility that
the video infringed on the Beastie Boys' copyrights to find the
infringement to be "willful" and therefore award more
significant damages under the Copyright Act. In so holding, the
court found that the Monster Energy employee responsible for the
matter had experience securing approval of other artists' music
for similar videos, so a reasonable jury could find that he was
aware of the legal duty to secure the Beastie Boys' approval
and recklessly disregarded that duty. The court noted that the
employee asked DJ Z-Trip's permission to use the remix in the
video arguably meant that he understood the need to obtain some
sort of authorization.
The court found that the actions of a second Monster Energy
employee, the Director of Interactive Marketing, who failed to
investigate proper licensing before posting the video, also
constituted reckless disregard by Monster Energy. The court
underscored that, the Director of Interactive Marketing was
familiar with music licensing procedures, and his job
responsibilities required sensitivity to others' IP rights in
the sponsorship-type deals he handled. The court noted that the
director had also produced and updated Monster Energy's social
media guide and he had been vigilant in protecting Monster
Energy's own IP rights.
Monster Energy sought to depict its infringement as sloppy, but
non-willful, acts of two employees, but the court noted that
Monster Energy had not performed any training of its employees
related to the use of copyrighted or trademarked content. The court
found that Monster Energy had no comprehensive music licensing
policy, tasked unqualified and untrained employees, and protected
its own IP rights with far more vigor than it did others'
rights.
False Endorsement
The court made several holdings regarding the false endorsement claim under the Lanham Act. First, the court found that the jury could have reasonably concluded that the video contained a false or misleading impression that the Beastie Boys endorsed Monster Energy, which they did not. Second, the court found that consumers were likely to be confused by the false or misleading representation. The court also held that a jury could reasonably conclude that Monster Energy's actions were "intentionally deceptive," that the Monster Energy employee intended that viewers of the video regard the Beastie Boys as equal subjects of the video along with Monster Energy, and that Monster Energy used the Beastie Boys music and marks with the intention of capitalizing on the Beastie Boys' reputation and goodwill.
The Bottom Line
Monster Energy's legal battles are not over. The Beastie
Boys are now seeking an additional $2.4 million in attorneys'
fees and costs. Capitol Records, LLC, the co-owner of the
copyrights in the sound recordings, and Universal-Polygram
International Publishing, Inc., the co-owner of the copyrights in
the various musical compositions written by the members of the
Beastie Boys, have now sued Monster Energy in a related case.
These lawsuits highlight the importance of having IP rights cleared
before launching any new production, advertisement, or publication.
Many potential pieces of third-party content may need to be cleared
for your production, including music, still photos, video footage,
individual likenesses and testimonials, and the use of others'
trademarks. Some of the rights clearance issues can be more
difficult than you might expect. Venable's Intellectual
Property attorneys have extensive experience in this area and stand
ready to assist.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
