Can You Learn Anything from Monster Energy’s Run-In with the Beastie Boys?
July 13, 2015 by Barbara Berschler
The dispute that led to the legal battle between the Beastie Boys band and Monster Energy Company (“Monster”), involved Monster’s use without permission of songs by the Beastie Boys and verbal references to the band and a member, Adam Yauch, in a promotional video. Monster’s negligible music licensing procedures were strongly criticized by the trial judge. The one-sided victory of the Beastie Boys for copyright infringement and false endorsement has led to Monster being found financially liable for its misjudgment.
In an earlier blog [Justin Bieber et al], I considered the misuse by one musician of the works of another. The Beastie Boy’s case gives guidance to business owners who wish to incorporate the intellectual property of others in their marketing and other creative endeavors with impunity.
In 2012, Monster hosted a promotional event called “Ruckus in the Rockies,” which featured snowboarding competitions and an after-party event led by Zach Sciacca, better known as Z-Trip, an award-winning DJ and music producer best known as a pioneer of the “mashup” movement /1. Later, a Monster employee oversaw the creation of a video with highlights from the “Ruckus” and after-party. The video included portions of five Beasties Boys’ songs in the soundtrack and also made references to the band and Yauch. At no time did Monster request permission for either use.
In May 2012, Monster posted the video on its website, YouTube channel and Facebook page, and sent out press releases to various snowboarding magazines and websites promoting the video. In August 2012, the Beastie Boys sued Monster claiming copyright infringement in violation of the Copyright Act and false endorsement in violation of the Lanham Act. Monster tried to deflect responsibility by alleging that it had received permission to use the material from Z-Trip, who had played a remix of the Beastie Boys’ songs which he had created under an agreement with the band to promote their new album.
Monster went so far as to bring Z-Trip into the suit as a defendant, claiming that he had fraudulently led it to believe he had the authority to license the songs for use in the video. In granting summary judgment dismissing Z-Trip from the case, the trial judge was unimpressed with Monster’s arguments that it had a contract with Z-Trip which licensed it to use the songs or that Z-Trip had acted fraudulently [.Z-Trip Let Out] The judge admonished Monster, saying that it had been reckless when it delegated to its marketing employee “alone the responsibility by which Monster was to acquire, for commercial exploitation, various intellectual [property] rights presumptively belonging to an iconic band. . . . Monster’s reliance on [its employee] to protect its interest in these matters was perforce unreasonable.” [2015 Fee Award Opinion]
Only at trial, 20 months after the lawsuit had begun, did Monster concede liability for copyright infringement, leaving the jury to decide whether it had violated the Lanham Act and what damages were to be awarded. The jury found that Monster’s acts of copyright infringement had been willful and awarded $1.2 million in statutory damages and $1 million in actual damages. [Rolling Stone Coverage] The jury also found that Monster was liable for intentional deception, and that it acted in bad faith in causing the false endorsement.
While not granting the Beastie Boy’s request for attorneys’ fees under the Lanham Act (because their “false endorsement” claim was not “exceptional” enough to merit an award of fees), the judge believed that the band’s request for attorney fees in connection with its copyright claim had merit and awarded the band in excess of $667,000. The judge saw Monster’s tactics as needlessly prolonging the litigation and increasing the Beastie Boy’s expense. He found that, “Had Monster engaged in a ‘critical analysis’–or even a cursory inquiry–before posting the Ruckus video online, it could have prevented the infringement and obviated the need for this litigation.”
What is the takeaway from this legal saga? The judge’s criticism of Monster provides some guidance:
“Despite being a large, sophisticated corporation with a $120 million annual marketing budget and with safeguards in place to protect it own intellectual property rights, Monster had no comprehensive music licensing policy; it tasked unqualified and untrained employees with the job of creating and disseminating promotional recap videos that presented a goodly risk of trenching on other’s rights; and it protected its own intellectual property interests with far more vigor and solicitude than it did other.”
One famous warning you should take heed of is the biblical adage: Do unto others as you would have them do unto you. All businesses generate some form of intellectual property and do not want it abused by others. Keeping that in mind, your business should institute procedures that allow for the proper vetting of its use of the intellectual property of others and don’t be cavalier as Monster proved to be in this encounter.
1/ A music genre that consists of a song or composition created by blending two or more pre-recorded songs, usually by overlaying the vocal track of one song seamlessly over the instrumental track of another.