UMG Recordings, Inc. v. Vital Pharmaceuticals, Inc., 2022 WL 2670339 (S.D. Fla. July 11, 2022) involves a copyright infringement action brought by a group of music publishers and record companies against an energy drink and sports nutrition supplement company doing business as Bang Energy and its CEO.
The plaintiffs’ claims included direct and indirect infringement resulting from TikTok videos that allegedly featured plaintiffs’ copyrighted works. According to plaintiffs, the videos were posted both by Bang, itself, and social media influencers hired by Bang to promote its products.
Bang also obtained ownership of the videos the influencers created. In order to get paid, the influencers submitted the videos to Bang for auditing prior to being posted. The videos were verified by Bang, including criteria that influencers “tag” Bang in the TikTok posts. Importantly, Bang’s criteria did not include a prohibition regarding the use of copyrighted music.
In addition, more than 100 videos were posted by Bang and its CEO on their own TikTok accounts. A handful of videos were posted by influencers to the influencers’ TikTok accounts.
The plaintiffs alleged that defendants were liable for direct infringement with respect to the videos posted to the defendants' accounts and were liable for contributory and/or vicarious infringement with respect to the videos posted to the influencers’ accounts.
As for the direct infringement claims, the court recently held that plaintiffs were entitled to partial summary judgment as to the issue of liability because plaintiffs owned/controlled valid copyrights and defendants posted the videos utilizing portions of plaintiffs’ original copyrighted work.
The court also held that plaintiffs were not entitled to summary judgment as to the issue of liability on their claims against Bang for contributory infringement. Contributory copyright infringement requires a showing of intentionally inducing or encouraging direct infringement. The court found that the plaintiffs failed to address evidence that defendants were not actually involved in the creation of the videos or music in question.
As to the issue of vicarious infringement, the court ruled that plaintiffs were entitled to summary judgment as to the issue of liability on their claims against Bang. In order to be vicariously liable for the actions of a third-party, a defendant must exercise control over the direct infringer (i.e., the influencers) and obtain a financial benefit from the infringement.
Here, on the control element, the court found that Bang’s audit right resulted in knowledge of the influencers’ copyright infringement and that Bang nonetheless paid the influencers therefor. Consequently, Bang failed to stop or limit the infringement despite the ability to do so. But the court ruled that plaintiffs did not establish a financial benefit to defendants from the infringement, in part, due to a lack of supporting evidence and the attempted introduction by plaintiffs copyright lawyer of untimely evidence.
While the defendants succeeded on its indirect infringement arguments at the summary judgment stage, it will presumably be much simpler for the plaintiffs to establish their claims at trial.
Takeaway: Advertisers can face significant monetary liability exposure for infringing social media content used by influencers that are contracted with for marketing campaigns. Companies that use influencer marketing should consider consulting with an eCommerce attorney in order to ensure that contractual rights and oversight ability are implemented properly so as to mitigate liability exposure.
