IP/Entertainment Law Weekly Case Update for Motion Picture Studios and Television Networks -- January 31, 2014

Experience Hendrix L.L.C. v. Hendrixlicensing.com LTD

USCA Ninth Circuit, January 29, 2014

Ninth Circuit affirms in part, reverses in part, and vacates decision in trademark litigation concerning commercial use of rock legend Jimi Hendrix’s image, likeness, and name, holding that defendants infringed trademark owner’s mark “Hendrix,” concluding that Washington’s Personality Rights Act is constitutional, and reversing district court’s reduction of damages award totaling over $1.7 million and granting new trial on damages.

Plaintiff Experience Hendrix, L.L.C., formed by Jimi Hendrix’s sole heir, owns trademarks that it uses to sell and license products related to Jimi Hendrix. Experience Hendrix sued defendants Andrew Pitsicalis and his company, Hendrixlicensing.com, L.L.C., alleging that defendants were licensing Hendrix-related merchandise that infringed Experience Hendrix’s trademarks. The district court granted summary judgment to Experience Hendrix, permanently enjoined Pitsicalis’s infringing conduct and significantly reduced a jury’s over $1.7 million award of damages to Experience Hendrix under the federal Lanham Act and Washington’s Consumer Protection Act (WCPA). On appeal, the Ninth Circuit vacated the district’s permanent injunction, reversed the court’s reduction of the damages award, affirmed the court’s decision to grant a new trial, and remanded Experience Hendrix’s claims for further proceedings. The Ninth Circuit also affirmed the district court’s decision interpreting portions of Washington’s Personality Rights Act (WPRA) to give post-mortem publicity rights to Jimi Hendrix’s heir, but reversed the district court’s holding that those portions of the WPRA granting post-mortem publicity rights are unconstitutional.

The court initially addressed Pitsicalis’s counterclaim seeking a declaratory judgment that WPRA does not apply to publicity rights in Jimi Hendrix and thus it is possible to trade in original images and likenesses of Jimi Hendrix without creating per se infringement of Experience Hendrix. As a threshold matter, Experience Hendrix argued that Pitsicalis lacks Article III standing to assert these declaratory judgment claims. The Ninth Circuit concluded, however, that Pitsicalis had standing in light of Experience Hendrix’s past aggressive assertion of its rights related to Jimi Hendrix, and a 2008 amendment to WPRA, which recognized a right of publicity “regardless of whether the law of domicile, residence, or citizenship of the individual or personality at the time of death or otherwise recognizes a similar or identical property right” would allow Experience Hendrix to renew its efforts to assert Jimi Hendrix’s post-mortem publicity rights against Pitsicalis. The court held that these circumstances gave rise to a “reasonable apprehension” that Experience Hendrix would renew its efforts to assert its rights under the amended WPRA against Petsicalis.

The court further held that under the narrow, non-speculative circumstances presented in this case, which involve only (1) Experience Hendrix’s interference with the sale in Washington of Pitsicalis-licensed, unofficial but non-infringing goods bearing Hendrix’s likeness and (2) Pitsicalis’s reasonable apprehension that Experience Hendrix will use WPRA to stop his attempts to license unofficial Hendrix-related products for sale in Washington, the provisions of WPRA that recognize Experience Hendrix’s publicity rights are constitutional. Contrary to the district court’s holding, the Ninth Circuit held that WPRA did not violate the Full Faith and Credit Clauses of the U.S. Constitution because Washington has sufficient significant contacts with the actual, non-speculative controversy at issue in the case, which involved the loss of sales in Washington of Pitsicalis-licensed goods. The Ninth Circuit reasoned that because these contacts are sufficient to give Washington an interest in applying its own law to this controversy, it is not arbitrary or unfair to apply WPRA here. The Ninth Circuit also rejected the district court’s holding that applying WPRA to this case would violate the dormant Commerce Clause by giving WPRA an impermissible extraterritorial reach, encompassing a variety of transactions occurring wholly outside Washington’s borders. The application of WPRA to the limited, non-speculative controversy at issue here, noted the court, does not affect transactions occurring wholly outside of Washington or impermissibly burden interstate commerce. Accordingly, the Ninth Circuit concluded that WPRA can be applied constitutionally to the narrow controversy at issue in the case and reversed the district court’s decision to grant Pitsicalis summary judgment on his declaratory judgment claims.

Next, the Ninth Circuit turned to the claims Experience Hendrix asserted against Pitsicalis. On appeal, Pitsicalis challenged only one aspect of the district court’s conclusion that he is liable for infringing Experience Hendrix’s trademarks. Pitsicalis argued that his domain names Hendrixlicensing.com and hendrixartwork.com did not violate the federal Lanham Act by infringing Experience Hendrix’s trademark “Hendrix.” Pitsicalis defended his use of the trademark “Hendrix” in his domain names as nominative fair use. The court instructed that “nominative fair use applies where a defendant has used the plaintiff’s mark to describe the plaintiff’s product.” The Ninth Circuit upheld the lower court’s holding, finding that Pitsicalis used “Hendrix” in his domain names to refer not to Experience Hendrix’s products, but only to Pitsicalis’s own product or service: licensing and marketing Hendrix-related goods.

The Ninth Circuit further vacated the permanent injunction and remanded to the district court to clarify what conduct is and is not enjoined. First, the Ninth Circuit concluded that the portion of the permanent injunction, stating that “nothing in this Permanent Injunction shall be construed as enjoining, prohibiting, or otherwise inhibiting Defendants or any other entity from creating, reproducing, advertising, distributing, selling, or otherwise commercially trading in images or likenesses of Jimi Hendrix,” conflicts with the earlier provisions of the injunction restraining Piticalis from using a Jimi Hendrix “guitar and headshot” logo or any similar mark, brand, or logo. Second, the Ninth Circuit held that the district court did not abuse its discretion in including language in the injunction stating that “the Court makes no ruling concerning whether …images or likenesses of Jimi Hendrix might be otherwise protected by copyright laws,” because this language only clarified that the district court had not ruled on any possible infringement of Experience Hendrix’s copyright, which was never alleged in the action. And third, the court held that language in the injunction stating that “nothing in this Permanent Injunction shall be construed as enjoining, prohibiting, or otherwise inhibiting Defendants or any other entity or person from using the names or marks ‘Jimi Hendrix’ or ‘Hendrix’ to identify the subject of an associated image or the author or creator of an associated work of art” does not conflict with earlier language specifically precluding Pitsicalis from using “Hendrix” in its business and domain name, but instead accurately indicates that the court never ruled on Experience Hendrix’s claims, abandoned in the district court, which alleged that Pitsicalis’s use of the names “Hendrix” and “Jimi Hendrix” to describe the images Pitsicalis used in his unofficial Hendrix-related products infringed Experience Hendrix’s trademarks “Hendrix” and “Jimi Hendrix.”

As to the issue of damages under the federal Lanham Act and the WCPA, the Ninth Circuit reversed the district court’s substantial reduction of the jury’s damages award totaling over $1.7 and reinstated the entire award. Under Rule 50(b)(3) of the Federal Rules of Civil Procedure, noted the court, a district court must uphold the jury’s award if there is any “legally sufficient basis” to support it. The court found that undisputed evidence of Experience Hendrix’s significant decline in its licensing revenue at the time that Pitsicalis was licensing infringing goods, testimonial evidence describing the nature of licensing revenue generally as a licensee’s payment to the licensor, and documentary evidence summarizing and comparing Experience Hendrix’s licensing revenue from 2006 through 2009, was sufficient to enable the jury’s award of Experience Hendrix’s lost profits to survive the Rule 50(b)(3) motion.

The Ninth Circuit nevertheless held that the district court did not abuse its discretion in conditionally granting Experience Hendrix a new trial on damages pursuant to Rule 59 of the Federal Rules of Civil Procedure. While the court acknowledged that, at first glance, its resolution – first reinstating the jury’s damages award and then affirming the district court’s decision to have a new trial on damages – may seem contradictory, the court explained that its decision is consistent with the differing standards that governed the district court’s consideration of Pitsicalis’s Rule 50(b)(3) and Rule 59 motions. Unlike Rule 50, explained the court, the district court, in considering a Rule 59 motion for new trial, is not required to review the trial evidence in the light most favorable to the verdict. Instead, the district court can weigh the evidence and access the credibility of the witnesses. The district court also is not limited to the grounds Pitsicalis raised in support of his new trial motion. The court noted that a district court can grant a new trial under Rule 59 on any ground necessary to prevent a miscarriage of justice. With those differences in mind, the Ninth Circuit affirmed the district court’s decision that a new trial was warranted because the damages awards were “against the clear weight of the evidence and the product of speculation, error, and disregard of the Court’s instructions.”

Finally, the Ninth Circuit vacated the district court’s award of attorney’s fees to Experience Hendrix under the WCPA, which reduced the requested fee from $504,673 to $50,000. The court concluded that while some of the district court’s reasons for reducing the requested fee award remain valid, the Ninth Circuit’s decision has changed several of the factors on which the district court relied to reduce the fee request. Accordingly, the court vacated the fee award in its entirety.

 

Topics:  Entertainment Industry, Motion Picture Industry, Trademark Litigation, Trademarks

Published In: Art, Entertainment & Sports Updates, Civil Procedure Updates, Civil Remedies Updates, Intellectual Property Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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