On February 20, 2015, the U.S. District Court for the Southern District of New York entered an order granting a permanent injunction for the Beastie Boys prohibiting Monster Energy from using a promotional video that infringed on musical composition copyrights and sound recording copyrights in connection with five Beastie Boys songs. The award followed a jury trial victory by the Beastie Boys on copyright and trademark infringement claims.

Background

The Beastie Boys and affiliated plaintiffs (collectively, the “Beastie Boys”) brought claims against Monster Energy Company (“Monster”) 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., arising from Monster’s creation and dissemination of a promotional video (the “Ruckus” video) that used, without the Beastie Boys knowledge or consent, portions of five songs that were composed and recorded by the Beastie Boys. The Ruckus video, a four minute recap video for Monster’s annual “Ruckus in the Rockies” event, used the five Beastie Boy songs for more than three minutes and also contained text that referred to the Beastie Boys and one of their members.

After a jury found that Monster was liable for willful copyright infringement and Lanham Act false endorsement, the Beastie Boys sought a permanent injunction to broadly enjoin Monster from using their music, names, and trademarks in any advertisement or trade-related content. Specifically, the Beastie Boys requested that the court permanently enjoin Monster from: (1) using, promoting or distributing the Ruckus video; (2) using, distributing or promoting, without the plaintiffs’ consent, any copyrighted musical work or sound recording that the plaintiffs owned or controlled; (3) using the plaintiffs’ names, voices or trademarks for advertising or commerce; and (4) suggesting a false endorsement of Monster’s products by the Beastie Boys. Monster opposed, arguing that the Beastie Boys were not entitled to injunctive relief, or, alternatively, that the relief sought was too broad. Monster sought to limit any possible injunction to the infringing video.

On February 20, 2015, Judge Paul Engelmayer granted, in part, the plaintiffs’ request for permanent injunction relief. The injunction was granted, but the scope of the relief was substantially narrowed from the plaintiffs’ request. In a companion order, the court apportioned copyright damages among the plaintiffs.

Analysis

As the court noted, to prevail on a permanent injunction request, a plaintiff must prove: (1) the plaintiff would suffer an irreparable harm in the absence of permanent relief; (2) remedies available at law, such as monetary damages, would be inadequate to compensate the plaintiff for its injury; (3) balancing the hardships between the plaintiff and defendant, a remedy in equity was warranted; and (4) the public interest would not be disserved by a permanent injunction.

Irreparable Harm

Because a jury found that the Beastie Boys demonstrated a likelihood of confusion regarding the endorsement of Monster’s products, and because the evidentiary record in the case supported that finding, the court presumed the element of irreparable harm.

Specifically, the court found that the Beastie Boys had credibly testified that they had a general policy against licensing their music for product promotions, and surviving members of the group testified that they would not have allowed Monster to use their music in the Ruckus video as they disliked the video’s portrayal of women and because they did not want to associate with Monster’s products. The court also found that Beastie Boys were forced, against their will, to publicly associate with and advance the causes of Monster through the video.

Adequacy of Legal Remedies

The jury awarded damages in excess of a million dollars to the plaintiffs, but the court found that the award did not adequately capture the value of the damages that were caused by the loss of First Amendment freedoms. The court found that none of the awards accounted for or compensated the Beastie Boys for the injuries caused by the group’s forced association with Monster and its products. The court also found that the injury could not easily be measured, given the difficulty of protecting a right to exclude improper uses simply though monetary damages.

Balancing the Hardships

Monster asserted that a broad injunction would undermine its First Amendment right of expression to the extent mentioning the Beastie Boys names could be ‘fair use” or would otherwise be permissible.

The court agreed with Monster’s general proposition, but, in the context of the Ruckus video, found it inapplicable. Monster had previously conceded that the Ruckus video infringed the Beastie Boys’ copyrights, and a jury had concluded that the video violated the group’s trademark rights by false endorsement. Thus, Monster possessed no further First Amendment rights in the use or dissemination of the video, and the court found, balancing the hardships, that a permanent injunction barring the use of the video would protect the Beastie Boys from further injury, without unduly harming Monster.

Public Interest

The court found that a permanent injunction limited to the Ruckus video would not disserve the public interest since the public has a compelling interest in protecting copyright owners’ rights to a creative work to “encourage the production of creative work.”

The Court’s Order for Injunctive Relief

For the reasons discussed above, the court found the Beastie Boys’ injunction request to be “highly overbroad” because it would sweep well beyond the infringing video to “a host of highly hypothetical future acts …” – including potentially lawful uses. Thus, the court denied the plaintiffs’ request for a permanent injunction beyond the infringing video.

Allocation of Damages

The jury awarded $1.2 million in statutory copyright damages, which reflected a $120,000 award for each of the five musical compositions, and $120,000 for each of the sound recording copyrights. Prior to trial, two co-owners of the copyrights at issue — Capitol Records on the sound recording side, and Universal Music Publishing Group (“UMPG”) on the musical composition side — had assigned to the Beastie Boys their rights to litigate copyright infringement respecting the Monster video. In a companion order to the order regarding injunctive relief, the court addressed the allocation of copyright damages among various rights holders. A brief summary follows.

Sound Recording Copyrights

The Beastie Boys and Capital Records each owned a fifty (50) percent undivided interest legal and beneficial interest in the sound recording copyrights. Thus, the Beasty Boys were entitled to 50 percent, or $60,000, for each of the five infringed copyrights, totaling $300,000.

Music Composition Copyrights

The plaintiffs represented that plaintiff Brooklyn Dust Music (“Brooklyn Dust”) was a ninety (90) percent owner and non-party UMPG was a ten (10) percent owner of four of five music composition copyrights. Regarding the fifth musical composition copyright, the plaintiffs represented that Brooklyn Dust, UPMG, and another non-party, Dust Brothers Music (“Dust Brothers”), owned 49.5 percent, 5.5 percent, and 45 percent interests, respectively.

Thus, the court awarded Brooklyn Dust $108,000 (90 percent) in damages for each of the first four musical composition copyrights and $59,400 (49.5 percent) in damages for the fifth musical composition copyright, for a total of $491,400 in damages.

The Dust Brothers did not make an assignment of its rights to the plaintiffs in this matter. The court acknowledged that Dust Brothers, or one of its members, might one day pursue a judgment against Monster, and required the plaintiffs to indemnify Monster for any damages that exceeded the 45 percent interest for Dust Brothers calculated by the plaintiffs.

 

Barron Stroud is a Partner and Co-Chair of the Intellectual Property Group at Wong Fleming LLC and can be reached by email at bstroud@wongfleming.com.