United States District Court, S.D. New York
[Copyrighted Material Omitted]
For Beastie Boys, a New York Partnership, Michael Diamond, Adam Horovitz, Dechen Yauch, as Executor of the Estate of Adam Yauch, deceased, each individually and collectively d/b/a Brooklyn Dust Music, Plaintiffs: Theodore Conrad Max, Sheppard, Mullin, Richter & Hampton, LLP (NYC), New York, NY; Valentina Shenderovich, Sheppard Mullin Richter & Hampton LLP, New York, NY.
For Monster Energy Company, Defendant, ThirdParty Plaintiff: Adam M. Cohen, Linda Marie Dougherty, S. Reid Kahn, Tanya Claire Pohl, Kane Kessler, P.C., New York, NY.
OPINION & ORDER
Paul A. Engelmayer, United States District Judge.
Between May 27 and June 5, 2014, the Court presided over a jury trial in which the hiphop group the Beastie Boys and affiliated plaintiffs (collectively, the " Beastie Boys" ) pursued claims against Monster Energy Company (" Monster" ), the beverage company. The jury found in the Beastie Boys' favor on both of their claims: for copyright infringement in violation of the Copyright Act, 17 U.S.C. § 101 et seq., and false endorsement in violation of the Lanham Act, 15 U.S.C. § 1051 et seq. These claims arose out of Monster's creation and dissemination of a promotional video that, without the Beastie Boys' knowledge or permission, used portions of five songs composed and recorded by the Beastie Boys as its soundtrack and included other references to the Beastie Boys. The jury awarded the Beastie Boys, on the copyright claim, alternative awards of $1 million in actual and $1.2 million in statutory damages; and on the Lanham Act claim, $500,000 in damages, the jury having found that Monster had intended to deceive consumers, a prerequisite to awarding money damages for a Lanham Act violation.
This decision resolves Monster's post-trial motions. Monster moves for a judgment as a matter of law under Federal Rule of Civil Procedure 50. As to the Copyright Act claim, Monster argues that the evidence was insufficient to support the finding of willful infringement on which the award of enhanced statutory damages was based. As to the Lanham Act claim, Monster argues that the evidence was insufficient to support either a finding of a false endorsement or that Monster acted with intentional deception. Monster alternatively moves for a new trial under Rule 59 or for a reduction in damages. For the following reasons, Monster's motions are denied.
A. Factual Background
1. The Parties
The Beastie Boys are a famous hip-hop group that was inducted into the Rock and Roll Hall of Fame in 2012. See Trial Transcript (" Tr." ) 103-05, 526-28, 869. During their recording career, which dates to the early 1980s, the Beastie Boys were composed of three members: Adam Horovitz, who goes by the stage name " Ad-Rock" ; Michael Diamond, who goes by the stage name " Mike D" ; and Adam Yauch, now deceased, who went by the stage name " MCA." Tr. 105-06, 864, 870. As of trial, the Beastie Boys had sold more than 20 million albums in the United States and 40 million worldwide. Tr. 527, 1477. The Beastie Boys have licensed their music for movies, television shows, sporting events, charitable causes, and other creative projects, but rarely, if ever, for product advertisements. Tr. 118-20, 275, 864-65. On
May 4, 2012, Yauch died of cancer. Tr. 106, 458-59. The surviving members of the Beastie Boys have since stated that they will no longer continue their careers as a group, in deference to Yauch. See Tr. 864.
Monster is a well-known energy drink company. Tr. 997. It is known for its imaginative and decidedly non-traditional approach to advertising. Rather than promoting its drinks in television ads or on billboards, as do many other beverage companies, Monster engages in what it calls " lifestyle marketing." This entails sponsoring action-sport athletes and musicians, promoting concert and " festival-styled" tours, and hosting events. Tr. 1059, 1351-54; PX 221. Monster's advertising goal is to create an aggressive and fun " brand personality," which will lead consumers to associate its beverages with music, action sports, video games, and attractive girls. Tr. 1001-02; PX 221 (" Monster is a lifestyle in a can." ).
Among the key demographic groups that Monster seeks to reach are fans of extreme sports and hip-hop music. At one point, Monster's director of music marketing considered approaching the Beastie Boys about a sponsorship agreement, believing that the Beastie Boys' core " audience was similar to a Monster consumer." Tr. 1379. However, he determined that Monster's budget did not permit it to hire such a prominent group. See Tr. 1379.
2. The Infringing Video
As part of its marketing efforts, Monster organizes and sponsors an annual event called the " Ruckus in the Rockies," which consists of a snowboarding competition and an after-party. Tr. 1092-93. On May 5, 2012, coincidentally the day after Yauch died, Monster held the second annual Ruckus in the Rockies at Lake Louise in Alberta, Canada. Tr. 1101-03; PX 145, PX 200. Monster booked various disc jockeys (" DJs" ) to perform at the after-party. Tr. 359, 454, 1096.
One such DJ was Zach Sciacca, who records and performs under the name " Z-Trip." Tr. 356, 954, 964-65, 1096-99; PX 145, PX 200. In early 2011, Z-Trip had entered into an agreement with the Beastie Boys to create a remix of some of their songs to promote the group's then-upcoming album, " Hot Sauce Committee Part II." Tr. 194-96, 278-279, 356-57, 954-58, 969. Under the agreement, Z-Trip was authorized to offer the remix for free as a promotional item. However, Z-Trip did not have the right to sell or license the remix, or to authorize third-parties to use it. Nor did he obtain any rights to the underlying Beastie Boys songs. See Tr. 278-279, 306, 358-59, 973, 975-76. On April 30, 2011, Z-Trip posted the remix on his website, where fans could download or stream it for free. Tr. 197-98, 359, 446-47, 451, 971-72; DX 88. The remix was entitled " Beastie Boys All-Access Megamix" (the " Megamix" ). See Tr. 429-30.
At the 2012 Ruckus in the Rockies after-party, Z-Trip performed for 90 minutes. Tr. 457. His set included Beastie Boys music, in part to honor Yauch; other DJs also played music by the Beastie Boys. Tr. 457-58. At some point, Z-Trip said to the crowd, " Rest in peace, MCA." Tr. 459.
Soon after the 2012 Ruckus, Monster's regional marketing director, Nelson Phillips, worked with videographer Clayton Larsen to create a recap video with highlights from the event. Tr. 1114-16. Phillips intended to use the video to promote the Monster brand. Tr. 1159, 1163. For the video's soundtrack, Phillips directed Larsen to use excerpts from Z-Trip's Megamix of Beastie Boys songs. Tr. 1114-15. Monster never obtained, or attempted to obtain, permission from the Beastie Boys or their management to use the Beastie Boys' music in the video. See, e.g., Tr.
121-22, 256, 875-76, 1115-16, 1173, 1316-17.
At trial, Phillips testified that he believed that Z-Trip, by his words and conduct, had authorized Phillips to use the Megamix, including the underlying Beastie Boys' songs, in Monster's promotional video. Tr. 1115-16; see also Tr. 1170 (Phillips) (" Q. [Y]ou thought you'd obtained a license from Z-Trip, is that right? A. More or less, yes." ). Phillips testified that Z-Trip had conveyed this authorization to him orally, during a conversation in the after-party's " green room" ; Z-Trip denied having any such conversation, or giving any such authorization, or telling anyone at Monster that he had any rights in the Beastie Boys' music. See Tr. 369-70, 456-57, 496. Phillips further claimed that Z-Trip's authorization to use the Beastie Boys' songs in the promotional video could be inferred from a short email exchange in which he sent the video to Z-Trip for " approv[al]," and Z-Trip responded, " Dope!" Tr. 1119, 1121; PX 134. This email exchange, and Phillips' and Z-Trip's respective accounts of their oral communications--both relevant to plaintiffs' claim of willful copyright infringement--are reviewed at length infra, pp. 20-23.
Monster's promotional video is just over four minutes long. See PX 211 (" video" ). It consists of footage from the 2012 Ruckus, including a road trip to Lake Louise, the snowboarding competition, and the after-party. Monster's green logo is ubiquitous in the video: It appears, among other places, on apparel, snowboarding ramps, banners surrounding the snowboarding course, and cans of Monster energy drinks held by promotional models and DJs. The Beastie Boys' music is also ubiquitous: The video's soundtrack consists of excerpts from five Beastie Boys songs: " Pass the Mic," " So Whatcha Want," " Sabotage," " Looking Down the Barrel of a Gun," and " Make Some Noise." The video does not contain any voice-overs, narration, or interviews; the Beastie Boys' music, which fills all but 32 seconds of the video, is the main aural event.
Near the end of the video, the credits roll in neon green and grey text, Monster's official brand colors. In pertinent part, the credits read:
ALL-ACCESS BEASTIE BOYS MEGA MIX
COURTESY OF Z-TRIP
DOWNLOAD THE LINK FOR FREE AT
Video at 3:51-3:53. The next screen reads " RIP MCA." Id. at 3:54-3:58.
On May 9, 2012, Monster posted the video on its website, YouTube channel, and Facebook page. See Tr. 307, 531, 1119-21, 1124-26, 1266; PX 135, PX 142, PX 150, PX 200, PX 270. The description of the video read: " Beastie Boys Megamix by Z-Trip. Download 'All-Access A Beastie Boys Megamix' here: http://ztrip.bandcamp.com." PX 135, PX 150, PX 270; see also Tr. 708, 835. Monster also sent press releases to various snowboarding magazines and websites; these included the same language. Tr. 1126-29; PX 165, PX 276. " Dozens" of websites posted Monster's release verbatim, including the reference to the Beastie Boys Megamix. See PX 165; see also, e.g., PX 164, PX 276.
A few weeks later, Monster received a letter from counsel for the Beastie Boys, which stated that Monster did not have permission to use the Beastie Boys' music
in the video. Tr. 1129, 1269. Phillips immediately removed the video from Monster's YouTube channel. Tr. 1130. Phillips and Larsen later edited the video, to replace the music and remove the references to the Beastie Boys, and then reposted it. Tr. 1130-31, 1277. As of August 2012, the video had been viewed 13,341 times. Tr. 1275-76.
B. Pre-Trial Procedural History
1. The Beastie Boys' Complaint
On August 8, 2012, the Beastie Boys filed suit against Monster in this District. Dkt. 1 (" Compl." ). Factually, the Complaint alleged that Monster, without the Beastie Boys' consent, had used the Beastie Boys' songs in the video, that Monster had thereby sought to associate its products with the Beastie Boys and to convey the Beastie Boys' endorsement of Monster, that the video text had included the names " Beastie Boys" and " MCA" for the same purpose, and that Monster had posted links to the video on various websites to advertise and promote Monster's products, events, and corporate goodwill. Compl. ¶ ¶ 58-68.
Based on these allegations, the Beastie Boys asserted claims of copyright infringement in violation of the Copyright Act, and false endorsement in violation of the Lanham Act. As to copyright, the Beastie Boys asserted two claims of infringement for each of the five songs used in the video: one for infringement of the Beastie Boys' sound recording copyright, and another for infringement of Brooklyn Dust's musical composition copyright. Compl. ¶ ¶ 70-100. In each of these 10 claims, the Beastie Boys alleged an " unauthorized reproduction," " distribution to the public, " and public performance" that was " intentional and willful." Id. In their Lanham Act claim, the Beastie Boys alleged that Monster had made unauthorized use of the mark " Beastie Boys" and " the marks comprised of the legal and professional names" of individual members. Id. ¶ ¶ 109-17. As a result, the Beastie Boys alleged, " the public was confused into believing that plaintiffs sponsored, endorsed, and are associated with defendant Monster in promoting Monster's products and promotional events." Id. ¶ 114.
On October 4, 2014, Monster filed an Answer. Dkt. 5 (" Answer" ). Monster denied almost every factual allegation in the Complaint or stated that it lacked knowledge sufficient to enable it to form a belief as to its truth. Id. ¶ ¶ 1-122. Monster also raised 12 affirmative defenses. Significant here, several sought to deflect responsibility for any copyright infringement onto Z-Trip. In this vein, the Answer asserted that (1) any injury to the Beastie Boys was due not to Monster but instead to a breach of contract or fraud by Z-Trip; (2) in using the band's music in its video, Monster had reasonably relied on Z-Trip's apparent authority as an agent for the Beastie Boys; and (3) Monster had
received permission from Z-Trip to use the Beastie Boys' music. Id. at 13. Monster also raised the defense of a failure to join a necessary party, again presumably Z-Trip. Id. at 12.
2. Monster's Third-Party Complaint Against Z-Trip
The following day, October 5, 2012, Monster brought a third-party Complaint against Z-Trip. Dkt. 9. Consistent with the affirmative defenses in its Answer, Monster alleged that Z-Trip had caused any damage to the Beastie Boys for which Monster might be found liable by (1) contracting with Monster to allow it to make unrestricted use of the Megamix, and (2) fraudulently leading Monster to believe that Z-Trip had authority to license the Beastie Boys' recordings contained in the Megamix. Id. ¶ ¶ 12-23, 28-33. Monster based these claims on the brief interactions between its employee, Phillips, and Z-Trip. Id. ¶ ¶ 11-12, 15-17. Specifically, Monster alleged that Z-Trip had authorized Phillips to use the Megamix in the video in a brief oral conversation during the Ruckus after-party on May 5, 2012, and in a short email exchange on May 8, 2012. Id. As relief, Monster sought, from Z-Trip, indemnification, compensatory and punitive damages, costs, and fees. Id. ¶ ¶ 23, 26, 33, 36.
3. Z-Trip's Summary Judgment Motion
On August 1, 2013, following discovery, Z-Trip moved for summary judgment on Monster's claims against him. Dkt. 36, 37 (" Z-Trip Br." ), 38. As to Monster's contract claim, Z-Trip argued that, as a matter of law, he could not have entered into a contract authorizing Monster to make unrestricted use of the Beastie Boys recordings in the Megamix because (1) he lacked apparent authority to issue a license for the Beastie Boys' music, and (2) his perfunctory exchanges with Phillips could not be read to reflect agreement on material terms of any such license. Z-Trip Br. 7-14. As to Monster's fraud claim, Z-Trip argued that no reasonable person could have believed that he had authority to license the Beastie Boys' music for use by Monster in a promotional video. Id. at 15-18. The Beastie Boys filed a memorandum supporting Z-Trip's motion. Dkt. 39.
On November 4, 2013, the Court granted summary judgment in favor of Z-Trip on both of Monster's third-party claims. See Dkt. 51, reported as Beastie Boys v. Monster Energy Co., 983 F.Supp.2d 338 (S.D.N.Y. 2013). As to the breach of contract claim, the Court held that, based on the " fleeting oral communications" and " ensuing email exchange" between Phillips and Z-Trip, " a reasonable juror could not find an offer, sufficiently clear acceptance, or consideration . . . let alone all three," and thus no contract between Monster and Z-Trip could be found. Id. at 348. The Court noted that these informal communications, even read in the light most favorable to Monster, did not include any actual or proposed " bilateral exchange" ; nor did either party " specif[y] the legal duties [it] was offering to undertake." Id. at 349. Furthermore, these communications were " too enigmatic and elliptical to constitute the 'clear [and] unambiguous' acceptance necessary for contract formation." Id. at 350 (alteration in original). The " sparse communications" also did not establish any non-incidental consideration. Id. Finally, the Court noted, even assuming that Phillips and Z-Trip had entered into some form of contract, it would have taken " an heroic effort of explication" and " flout[ed] common sense" to interpret the contract to include a license to use the Beastie Boys' music in the video. Id. at 351.
As to Monster's claim of fraud, the Court found the record devoid of evidence either that Z-Trip acted with fraudulent
intent or that Monster had reasonably relied on Z-Trip's representations. Id. at 351-53. On the contrary, the summary judgment record reflected that Z-Trip was developing business relationships with Monster and the Beastie Boys, and had had " every incentive" to keep both parties happy. Id. at 352. Z-Trip also had sent an email " ruing his failure to prevent Monster's misuse of the Beastie Boys' original recordings," which the Court found difficult to square with the allegations of fraud. Id. At the most, the Court held, Phillips could claim to have misunderstood Z-Trip. Id. The Court further observed that it had been reckless for Monster " to delegate to Phillips alone the responsibility by which Monster was to acquire, for commercial exploitation, various intellectual [property] rights presumptively belonging to an iconic band" and that " [o]n the record before the Court, Monster had no business entrusting such matters to Phillips." Id. A sophisticated corporation like Monster could not have reasonably relied on the " short, casual, and vague" communications between Phillips and Z-Trip as the basis on which rights to five Beastie Boys' songs had been conveyed for Monster to use, for free, in its marketing. Id. at 353. Rather, the record appeared to reflect ignorance on Phillips' part as to the need to obtain licenses to use others' music. And " Monster's reliance on Phillips to protect its interest in these matters was perforce unreasonable." Id. The Court accordingly dismissed Monster's third-party complaint with prejudice. Id.
Trial began May 27, 2014. As witnesses, the Beastie Boys called Horovitz and Diamond, the two surviving band members; John Silva, the band's manager; Z-Trip, the DJ; Lisa Thomas, a damages expert; and Anthony Ricigliano, a musicologist who analyzed the video's use of Beastie Boys' songs. The Beastie Boys also offered deposition testimony from Lorrie Boula, Z-Trip's manager, and from Monster employees. Monster, for its part, called four of its employees: Phillips, director of marketing for Monster's Canadian business unit; Leroy Nichols, director of interactive marketing; Brent Hamilton, director of music marketing; and Sam Pontrelli, global head of marketing. Monster also called two damages experts: Jon Albert and Erich Joachimsthaler.
1. Overview of Disputed Issues
Copyright claims: Shortly before trial, Monster conceded liability as to the claims of copyright infringement, and did so again in its opening statement. See Dkt. 141 (" Pre-Trial Conf. Tr." ), at 48; Tr. 91-92. Accordingly, trial focused on damages. Under the Copyright Act, a prevailing plaintiff may choose, at any time before entry of final judgment, between actual and statutory damages. See 17 U.S.C. § 504(c). The parties vigorously litigated both types.
The parties agreed that actual damages were measured by the price that a willing buyer and a willing seller would have agreed upon for a license to use the Beastie Boys' musical compositions and sound recordings in Monster's video. See Pre-Trial Conf. Tr. 84, 87; Tr. 525-26 (Thomas), 1478-79 (Albert). But, for two reasons, there was no obvious benchmark for determining the cost of such a license. First, although the Beastie Boys have widely licensed their music for other purposes, it had never done so for a traditional product advertisement. See Tr. 121 (Horovitz), 864-65 (Diamond). But see note 2, supra. Second, Monster's four-minute web video, disseminated via YouTube, Facebook, and other websites, was a modern, relatively novel form of product advertisement.
As a result, the parties' expert witnesses advocated starkly different methodologies for valuing these licenses. The Beastie Boys' expert, Thomas, who represents recording artists and songwriters through her company Lisa Thomas Music Services, drew upon the prices historically paid to license the Beastie Boys' musical compositions and sound recordings. These were set out in two lengthy exhibits chronicling the group's licensing history; these reflected licensing fees for Beastie Boys' songs that reached as high as several hundred thousand dollars for use of a 30-second snippet of a single song in a movie trailer. See PX 219, PX 220. Although recognizing differences between the genres, Thomas opined that Monster's infringing video was most comparable to a movie trailer " advertising and marketing [a] film." Tr. 544. Thomas estimated the market value of a license to use the Beastie Boys' songs in Monster's video as $100,000 for each musical composition and another $100,000 for each sound recording, for a total of $1 million. Tr. 550.
Monster's expert, Albert, who helps advertisers obtain music rights through his business The Albert Company, opined that the video was more comparable to an entertainment video that also had commercial value. Tr. 1516-17, 1528-29. For other non-commercial snowboarding and skateboarding videos, the Beastie Boys have received licensing fees of up to $25,000 per song, or $12,500 for each copyright " side" (musical composition and sound recording). See Tr. 1688-89. Albert opined that a licensing fee for use of the songs in Monster's video should be valued by first determining the value of a license to use a single Beastie Boys song in all media for one year, see Tr. 1474-80, and then discounting that figure to reflect the limited context in which the song appeared ( i.e., online only) and its limited duration (five weeks). Tr. 1483-85. Albert calculated the total value of a license to use all five songs as between $93,750 and $125,000. Tr. 1485-87.
As to statutory damages, the parties disputed whether Monster's infringements of the Beastie Boys' 10 copyrights had been willful, innocent, or neither (which the Court and counsel referred to as " regular" ). The Copyright Act authorizes statutory damages between $750 and $150,000 for willful infringement; between $200 and $30,000 for innocent infringement; and between $750 and $30,000 for " regular" infringement. See 17 U.S.C. § § 504(c)(1)-(2); see also Agence France Presse v. Morel, No. 10 Civ. 2730 (AJN), 2014 WL 3963124, at *11 (S.D.N.Y. Aug. 13, 2014). The evidence as to this point is reviewed in detail below, in connection with Monster's Rule 50 challenge to the jury's finding of willfulness. See infra pp. 20-30. In brief, in arguing for willfulness, the Beastie Boys emphasized Monster's sophistication, its failure to take any steps to inquire into whether it could lawfully use the Beastie Boys' songs in the video, its economic motive to exploit the band's music to promote its beverages to the Beastie Boys' fan base, and the absence of any policies or controls within Monster to assure that its promotional videos respected artists' copyrights. The Beastie Boys also disputed as false Phillips' claim that Z-Trip had authorized Monster to use the Beastie Boys' music to promote its beverages. For its part, Monster denied adopting a corporate strategy that facilitated misuse of copyrighted music. Monster instead depicted Phillips as a lone actor who had inadvertently infringed on the Beastie Boys' copyrights. Monster argued that Phillips had honestly but mistakenly believed, based on his interactions with Z-Trip, that he had sufficient permission to include the band's music in the video.
Lanham Act claim: On the Lanham Act claim, the parties disputed whether the video would reasonably be viewed as an endorsement of Monster products by the Beastie Boys, and if so, whether Monster's endorsement was intentionally deceptive, thus authorizing monetary (as opposed to solely injunctive) relief. The evidence relevant to these issues is reviewed in detail below, in connection with Monster's Rule 50 challenge to the jury's findings of liability and damages on this claim. See infra pp. 30-60. In brief, the Beastie Boys argued that the video did suggest an endorsement of Monster by the Beastie Boys and that Monster intentionally conveyed this false message; it noted that the video was filled with their songs and also contained textual references to the Beastie Boys and to MCA. For its part, Monster defended these references as benign: The reference to " the Beastie Boys," it argued, was added to accommodate Z-Trip, and the reference to " MCA" was a mere homage to Yauch.
As to monetary damages on the Lanham Act claim, the parties agreed that the proper measure was the fair market value a willing buyer would pay a willing seller for such an implied endorsement of Monster by the Beastie Boys. See Tr. 574, 1514. Thomas, plaintiffs' damages expert, drew on her experience negotiating product endorsement deals for celebrity clients, see Tr. 575-77, and estimated the value of such an endorsement fee as $1 million. See Tr. 553, 574. By contrast, Monster's expert, Joachimsthaler--the CEO of a brand consulting company, Vivaldi Partners--opined that the purported endorsement had no value. Tr. 1422. He testified that there is " no way" that a viewer would have perceived any association between the Beastie Boys and Monster because the video was not memorable, lacked an image of any band member, and was unlikely to be watched repeatedly by a viewer. Tr. 1411-14. Occupying something of a middle ground, Albert, another damages expert who testified for Monster, estimated the value of the use of the Beastie Boys' music and marks in the video and Facebook link at $50,000. Tr. 1515.
2. Monster's Rule 50(a) Motion
On June 2, 2014, after the Beastie Boys rested, Monster orally moved for a directed verdict on the Lanham Act claim under Rule 50(a). Tr. 1192-94. The Court denied the motion. Tr. 1223, 1234-35. The Court, however, invited Monster, in the event of an adverse verdict, to renew its challenge, this time supported by legal briefing. Tr. 1220-22. The Court noted that even if the Lanham Act claim later proved deficient, Monster was not prejudiced by submitting it to the jury alongside the Copyright Act claims. The Court also invited Monster to propose jury instructions that would minimize the risk that the jury might confuse the standards governing the two causes of action. See Tr. 1234-35.
3. The Charge Conference
On June 3, 2014, the Court held a conference at which it reviewed its draft jury charge with counsel. See Tr. 1241-63, 1383-85, 1390-92, 1500-07. For the most part, counsel were in accord with the Court's proposed charge.
Monster made two substantive objections. First, it asked the Court not to elicit, on the verdict form, a separate finding as to whether Monster, if liable on the Lanham Act claim, had acted in bad faith. The Court rejected this claim because this finding would be relevant in the event the Beastie Boys sought attorneys' fees. See Tr. 1255-59, 1384-85; see also Twin Peaks Prods., Inc. v. Publ'ns Int'l, Ltd., 996 F.2d 1366, 1383 (2d Cir. 1993). Second, Monster asked for a nominative fair use instruction with respect to the use of the Beastie Boys' name in describing Z-Trip's Megamix. The Court declined to give that instruction because there had been no need for Monster to use the Beastie Boys' name when identifying the Megamix. Tr. 1500-07; see also infra, pp. 21-22, 50-51.
Otherwise, as to the Court's instructions--including as to willful copyright infringement, actual and statutory copyright damages, the elements of false endorsement and intentional deception under the Lanham Act, and the standards for awarding monetary damages under that Act--the parties substantially agreed with the Court's proposed charge. On June 4, 2014, after Monster rested, the Court charged the jury. See Tr. 1590-1620.
4. The Verdict
On June 5, 2014, the jury returned its verdict. See Dkt. 147 (" Verdict Form" ). On the Copyright Act claims, the jury found each of Monster's 10 acts of infringement willful. Id. at 2. In actual damages, it awarded $100,000 to Brooklyn Dust for each infringement of a musical composition copyright and $100,000 to the Beastie Boys for each infringement of a sound recording copyright, for a total of $1 million. Id. As to statutory damages, the jury awarded $120,000 for each of the 10 acts of infringement, for a total of $1.2 million. Id. at 2.
On the Lanham Act claim, the jury found that Monster had " used the Beastie Boys' persona without permission, thereby suggesting a false endorsement of Monster's products." Id. at 4. It also found that Monster had " intended to deceive consumers concerning the Beastie Boys endorsement of its products," and had not proven " that consumers were not, in fact, confused or deceived as to whether the Beastie Boys endorsed Monster's products." Id. On this claim, the jury awarded the Beastie Boys $500,000 in damages. Id.
Combined with the higher damages award ( i.e., statutory damages) on the Copyright Act claims, the damages awards totaled $1.7 million.
5. Post-Trial Motions
After the jury returned the verdict, Monster orally renewed its motion for judgment as a matter of law. Tr. 1750. On July 22, 2014, Monster moved under Rule 50(b) for such a judgment, along with a supporting memorandum of law and a declaration. Dkt. 168, 169, 170 (" Monster Br." ). On August 27, 2014, the Beastie Boys filed a memorandum of law and a declaration in opposition. Dkt. 173, 174 (" Beastie Br." ). On September 9, 2014, Monster submitted its reply. Dkt. 175, 176 (" Reply Br." ). On October 17, 2014, the Court held argument. Dkt. 177.
Monster moves for judgment as a matter of law under Rule 50(b) on three issues: whether (1) its copyright infringement was willful, as required to recover enhanced statutory damages under the Copyright Act; (2) it is liable for false endorsement in violation of the Lanham Act; and (3) it intentionally deceived consumers, as required to recover monetary damages under the Lanham Act. Monster concedes that the jury was properly instructed but contends that its verdict was not supported by legally sufficient evidence. Alternatively, Monster seeks a new trial on all claims pursuant to Rule 59, or a reduction of the jury's damages awards.
A. Monster's Rule 50(b) Motion
1. Applicable Legal Standards
" [J]ury verdicts should be disturbed with great infrequency." Raedle v. Credit Agricole Indosuez, 670 F.3d 411, 418 (2d Cir. 2012). To grant a motion for judgment as a matter of law, the Court must find that " 'a reasonable jury would not have a legally sufficient evidentiary basis to find for [the non-moving] party on that issue.'" Stampf v. Long Island R.R. Co., 761 F.3d 192, 197 (2d Cir. 2014) (quoting Fed.R.Civ.P. 50(a)). This determination is appropriate " only where there is such a complete absence of evidence supporting the verdict that the jury's findings could only have been the result of sheer surmise and conjecture, or there is such an overwhelming amount of evidence in favor of the movant that reasonable and fair minded men could not arrive at a verdict against him." Bucalo v. Shelter Island Union Free Sch. Dist., 691 F.3d 119, 127-28 (2d Cir. 2012) (citations omitted).
In resolving a Rule 50 motion, the Court reviews all the record evidence. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000). However, the Court must disregard evidence favorable to the moving party that the jury was not required to credit ( i.e., because it was impeached or disputed). Id. at 150-51. And the Court must view the evidence " in the light most favorable to the [non-moving] party" and " give deference to all credibility determinations and reasonable inferences of the jury." Galdieri-Ambrosini v. Nat'l Realty & Dev. Corp., 136 F.3d 276, 289 (2d Cir. 1998).
In sum, the Court " may grant a motion for judgment as a matter of law 'only if it can conclude that, with credibility assessments made against the moving party and
all inferences drawn against the moving party, a reasonable juror would have been compelled to accept the view of the moving party.'" Zellner v. Summerlin, 494 F.3d 344, 370-71 (2d Cir. 2007) (quoting Piesco v. Koch, 12 F.3d 332, 343 (2d Cir. 1993)). This presents the moving party with a " heavy burden." Cash v. County of Erie, 654 F.3d 324, 333 (2d Cir. 2011).
2. Copyright Act--Willfulness
Monster does not dispute that--without seeking or obtaining a license or other form of authorization from the Beastie Boys or their manager--it used excerpts of five Beastie Boys songs as the soundtrack for its recap video. See, e.g., Tr. 106-07, 121-22, 256, 875-76, 1115-16, 1173, 1316-17. At trial, Monster therefore conceded liability on the Copyright Act claims, disputing only damages. As to the statutory damages inquiry, a key issue was whether Monster's infringements were willful. The jury held that they were, and this finding elevated the maximum damages per infringement to $150,000; had the jury found either an innocent or a " regular" (neither innocent nor willful) violation, the maximum damages per infringement would have been $30,000. See 17 U.S.C. § § 504(c)(1)-(2); Agence France Presse, 2014 WL 3963124, at *11. Accordingly, if the evidence did not support a finding of willfulness, the Court must reduce the statutory damages award from the present $120,000 per violation to, at most, $30,000 per violation. This reduction would not, however, affect the jury's award of $100,000 per violation in actual damages.
a. Relevant Facts
Phillips, director of marketing for Monster's Canadian business unit, planned the 2012 Ruckus and produced the recap video. Tr. 1088, 1092, 1114-16. Before joining Monster, he had completed one semester of college, spent several years in the forestry and ski industries, and worked in sales and marketing for an apparel company. Tr. 1089-90. He had no training in music licensing. Tr. 1135-38. Phillips testified that, at the time he created the video, he believed that Z-Trip had authorized him to use the Beastie Boys music in the video and that he did not need to ...