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 in a promotional video on Monster’s website without proper permission after finding Monster Energy’s actions to be willful copyright infringement and a false endorsement under the Lanham Act.  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. The Beastie Boys are now seeking an additional $2.4 million in attorneys’ fees and costs. Capitol Records, LLC, and Universal-Polygram International Publishing, Inc., have now sued Monster Energy in a related case.

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. 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.

The court made several holdings regarding the false endorsement claim under the Lanham Act, including that  the jury could have reasonably concluded that the video contained a false or misleading impression that the Beastie Boys endorsed Monster Energy;  consumers were likely to be confused by the false or misleading representation; 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.

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.

Click here to learn more about the importance of getting the right permissions.