Andrew Leonard photographs stem cells using an electron microscope. Due to the technical skill required, he is one of just a handful of such photographers. Leonard pays a scientific research institution to use its electron microscope. He obtains cell samples from doctors, scientists and researchers. Leonard takes the images in black and white, then uses his artistic judgment to add color to the images.
Stemtech uses distributors to sell the nutritional supplements it formulates. Stemtech distributors sign a contract and must comply with Stemtech’s policies and procedures manual. Leonard licensed two of his stem cell images to Stemtech for limited use. Stemtech failed to pay Leonard the agreed upon licensing fee and exceeded the scope of the license by using the images without a license in its promotional materials. Further, Stemtech allowed some of its distributors to use Leonard’s images on their websites. After Stemtech and its distributors refused to pay Leonard for the unauthorized use of his images, Leonard sued Stemtech and its distributors for copyright infringement. The jury awarded Leonard a $1.6 million verdict against Stemtech on Leonard’s direct, vicarious and contributory infringement claims. The issues on appeal to the Third Circuit were whether the district court should have granted Stemtech’s motion for a new trial on contributory and vicarious liability and damages and whether Leonard should have received prejudgment interest and infringer’s profits.
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This case illustrates the difficulty in proving actual damages and profits damages in copyright infringement cases. Anthony Lawrence Dash composed “Tony Gunz Beat,” (TGB), an instrumental music track. Floyd Mayweather, a famous boxer, co-wrote lyrics to TGB and renamed the song “Yep.” Mayweather used “Yep” as his introductory music for two World Wrestling Entertainment, Inc. (WWE) broadcast events he appeared in. Dash sued Mayweather, WWE and others for copyright infringement.
As Dash did not register his copyright until after the alleged infringement occurred, he could not recover statutory damages and was limited to proving his actual damages and the infringers’ profits. The parties requested the district court to rule on whether Dash was entitled to damages before determining whether the defendants were liable for copyright infringement. The defendants moved for summary judgment on both damages issues. The district court ruled that Dash was not entitled to receive either actual damages or profits damages. Dash did not present evidence that TGB had a market value, precluding actual damages. Dash did not present evidence of a causal link between the playing of his song and an increase in profits received by the defendants, preventing profits damages. The district court then dismissed the case entirely, including the liability portion of the case. The Fourth Circuit Court of Appeals affirmed the district court’s decision.
Continue reading “WWE Event Copyright Infringement Damages Claims Smacked Down”