Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-88-02293/USCOURTS-ca10-88-02293-0/pdf.json

Parties Involved:
Kleier Advertising, Inc.
Appellant
Kleier Marketing, Inc.
Appellant
Premier Pontiac, Inc.
Appellee
Bill Stokely
Appellee
Stokely Outdoor Advertising, Inc.
Appellee

Document Text:

PUBLISH 

THE UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

KLEIER ADVERTISING, INC., & ) 

KLEIER MARKETING, INC., 

) 

Plaintiffs/Appellant, 

FILED 

U!lited Stat~~ Court Qf Apptals 

Tenrh Cirroit 

DEC 12 1990 

ROBERT L. HOECKER 

Clerk 

) No. 88-2293 

v. ) 

PREMIER PONTIAC, INC.; BILL ) 

STOKELY, dba STOKELY OUTDOOR 

ADVERTISING AND SIGN COMPANY; ) 

and STOKELY OUTDOOR ADVERTISING INC., ) 

Defendant/Appellees. ) 

Appeal from the United States District Court 

For the Northern District of Oklahoma 

D.C. No. 86-C-1015-C 

Jack A. Wheat of Roach Becker & Wheat, Louisville, Kentucky, for 

Plaintiff/Appellants. 

Mark G. Kachigian, Tulsa, Oklahoma, {Paul B. Naylor, David Tracy of 

Naylor & Williams, Inc., Tulsa, Oklahoma, and Stephen L. Wilkerson 

of Knight, Wagner, Tulsa Oklahoma, were on the briefs) for 

Defendant/Appellees. 

Before BALDOCK and EBEL, Circuit Judges, and SAM, District Judge.* 

SAM, District Judge. 

*Honorable David Sam, United States District Judge for the 

District of Utah. 

Appellate Case: 88-2293 Document: 01019625391 Date Filed: 12/12/1990 Page: 1 
This is a suit for copyright infringement, defamation and 

deceptive trade practices related to a Tulsa, Oklahoma automobile 

dealership's infringing use of a copyrighted advertising display. 

on the copyright infringement claim, the jury returned a 

verdict for plaintiffs-appellants Kleier Advertising, Inc. and 

Kleier Marketing, Inc. (together Kleier) and against defendantsappellants Charlie Lister and Premier Pontiac, Inc. d/b/a Li ster 

Pontiac (Lister Pontiac) and Bill Stokely and Stokely Outdoor 

Advertising, Inc. (Stokely, Inc.). The trial court dismissed 

Kleier's defamation claim by summary judgment and its deceptive 

trade practices claim by directed verdict. Kleier asserts on · 

appeal that the trial court erred by: (1) interpreting the jury 

verdicts as (a) awarding Kleier a single amount agai nst all 

defendants for lost license fees, and {b) not awarding Kleier the 

amount of Stokely, Inc.'s profits from infringement; (2) holding as 

a matter of law that prejudgment interest is not recoverable in 

copyright infringement actions; ( 3) granting the defendants summary 

judgment on the defamation claim; and (4) entering a directed 

verdict for the defendants on the deceptive trade practices claim. 

our jurisdiction over this case arises under 17 u.s.c . § 101 

et seg. (1982) (Copyright Act), 15 u .s.c. § 1051 et seq. (1982 ) 

(Lanham Act) and 28 u.s.c. § 1332 (1982) (diversity of 

citizenship). We hold the trial court did not commit reversible 

error in interpreting the jury verdicts or dismissing the 

2 

Appellate Case: 88-2293 Document: 01019625391 Date Filed: 12/12/1990 Page: 2 
defamation and deceptive trade practices claims. We further hold 

the trial court erred by refusing to grant Kleier prejudgment 

i nterest on its copyright infringement claim. 

Accordingly we affirm in part, reverse in part and remand with 

instructions regarding addition of prejudgment interest 

to Kleier's award. 

I. 

Kleier is comprised of agencies that create and place 

advertisements in various media, with a specialty in automobile 

dealership advertising. The agencies annually license ad~ertising 

programs to Kleier's clients at rates related in part to the 

licensee's geographical location. 

This litigation centers on Kleier's syndicated advertising 

program that captions trouserless cartoon characters wearing boxer 

shorts with "We'll Beat the Pants Off Any Deal!" The program is 

used primarily for billboards to which are attached scaffolding 

supporting a life-size mannequin that appears to be a billboard 

company employee engaged in posting the advertising display. The 

mannequin is wearing a hardhat and workclothes, and its trousers 

are dropped to the ankles exposing loudly colored boxer shorts. 

Kleier obtained copyrights on the entire "Beat the Pants" 

advertising program. 

3 

Appellate Case: 88-2293 Document: 01019625391 Date Filed: 12/12/1990 Page: 3 
Various trial exhibits (including national publications) 

show that since its creation in 1982, the 11Beat the Pants" 

program has been a traffic-stopping success in forty geographical 

markets throughout the United States and Canada. 

To obtain a license to use Kleier's "Beat the Pants" program, 

an automobile dealership must pay Kleier an upfront license fee 

that entitles the licensee to use the program for one year within 

the dealership's marketing area, with the right to renew for 

another year for fifteen percent of the initial license fee. In 

the Tulsa market the initial fee is $14,887.00 and the renewal fee 

is $2,233.05. 

In December 1984 Lister Pontiac, a Tulsa automobile dealership 

owned by Charlie Lister, started using billboard advertising with 

the slogan, "We'll Beat the Pants Off Any Deal in Town." Affixed 

to Lister Pontiac's billboard was scaffolding and a trouserless 

mannequin in boxer shorts wearing the same type of clothing and in 

the same working posture as the Kleier mannequin. Stokely, Inc ., 

a Tulsa advertising agency owned by Bill Stokely, displayed Lister 

Pontiac's billboard. Kleier alleges Lister Pontiac's use of the 

billboard display was an infringement of Kleier's copyright, for 

which Stokely unlawfully earned $16,500.00 during the 22-month 

period Lister Pontiac's billboard was exhibited. 

4 

Appellate Case: 88-2293 Document: 01019625391 Date Filed: 12/12/1990 Page: 4 
After Kleier 1 s discovery of the Lister Pon:tiac billboard, 

Kleier and its counsel notified Lister Pontiac and Stokely, Inc . 

that they were infringing Kleier's copyright. Lister Pontiac and 

Stokely, Inc. initially responded by inquiring whether they could 

purchase a license, but later discarded Kleier's answer to the 

inquiry and never contacted Kleier again. 

Kleier then commenced this copyright infringement action 

against Charlie Lister, Lister Pontiac, Bill Stokely and Stokely, 

Inc. The defendants raised the affirmative defense that any 

similarity between the two advertising displays was merely 

coincidental because Charlie Lister or Bill .Stokely had designed 

all Lister Pontiac advertising displayed on Stokely Inc .'s 

billboards. At trial Kleier introduced evidence showing that at 

least six other Stokely, Inc. displays were copies of advertising 

campaigns created by various agencies. 

During the course of the 

complaint to add claims for 

litigation, Kleier amended its 

defamation and deceptive trade 

practices based on an article that appeared in the Tulsa World, a 

local newspaper. The article first discussed Kleier's national 

success with and alleged copyright of the "Beat the Pants" program 

and Kleier's claim that Stokely, Inc. copied the proofs Kleier sent 

it. The article then quoted Bill Stokely as saying: (1) Kleier had 

sent the proofs five months after Stokely, Inc. had put up the 

5 

Appellate Case: 88-2293 Document: 01019625391 Date Filed: 12/12/1990 Page: 5 
first Lister Pontiac billboard, (2) Kleier copied Stokely, Inc., 

and (3) he thought the program was Stokely Inc.'s idea. 

The trial court granted the Stokely defendants summary 

judgment on the defamation claim and entered a directed verdict for 

them on the deceptive trade practices claim. On the remaining 

claims, the jury returned verdicts against all defendants, finding 

they intentionally engaged in copyright infringement. 

Kleier appeals from the trial court's orders (1) 

interpreting the verdicts, (2) denying prejudgment interest, (3) 

granting summary judgment on the defamation claim and (4) 

directing the verdict on the deceptive trade practices claim. 

·rr. 

Kleier asserts it sought and was entitled to a jury award of 

damages plus profits, that is, the actual damages that resulted 

from the license fees the Lister defendants should have paid 

(evidenced as $17,120.05 representing licensure for one year and a 

one-year renewal) plus Stokely, Inc.'s profits from the infringing 

billboard display (evidenced as $16,500. 00) . Instead the jury 

returned verdicts (on identical verdict forms) against all 

defendants in the amount of $17,120.05. 

6 

Appellate Case: 88-2293 Document: 01019625391 Date Filed: 12/12/1990 Page: 6 
The trial court denied Kleier's motion that requested entry of 

judgment of $17,120.05 against the Lister defendants and $16,500.00 

against the Stokely defendants, for a total of $33,620.05. Kleier 

then moved unsuccessfully for judgment NOV or new trial, arguing 

that because the difference between damages and profits was small, 

the jury must have intended to award profits but instead awarded a 

slight ly higher figure that could be remitted to the $16,500.00 

profits figure. Rejecting Kleier's argument, the trial court said 

that although, under 17 u.s.c. § 504(b) (1982), the jury could have 

made a separate award in the amount of Stokely, Inc. 's profits, the 

jury obviously chose to award only the amount of the lost license 

fee , for a total verdict of $17, 12 o. 05 against all defendants, 

jointly and severally. Order dated June 3, 1988, at 1-2. 

A motion for judgment NOV is to be analyzed as follows: 

The standard for determining whether to grant a Motion 

for a judgment NOV • • is not whether there is 

literally no evidence to support the party opposing the 

motion, but whether there is evidence upon which the jury 

could properly find a verdict for that party. 

(The trial court] must view the evidence most favorably 

to the party against whom the motion is made and give 

that party the benefit of all reasonable inferences from 

the evidence. 

Graham v. Wyeth Laboratories, Div. of Am. Home Prod. Corp., 906 

F .2d 1399, 14 01 (lOth Cir. 1990) (quoting Brown v. McGraw, 736 F.2d 

609, 612-13 (lOth Cir. 1984)). 

We agree with the trial court and Kleier that 17 u.s.c. § 

504(b) entitles Kleier to an award in the amount of Stokely, Inc.'s 

7 

Appellate Case: 88-2293 Document: 01019625391 Date Filed: 12/12/1990 Page: 7 
profits from the infringing display and that a damages-plus-profits 

award would not have constituted ndouble recovery11 unless the 

profits figure included an amount also awarded as actual damages. 1 

However, we also agree with the trial court that, after hearing a ll 

the evidence and being fully instructed on the actual and profits 

damages, 2 the jury chose to award (in actual damages) the amount 

of the lost license fee, $17,120.04, as the total verdict against 

the defendants, jointly and severally. To conclude otherwise would 

be to substitute our judgment for the jury's verdict (which the 

trial court properly refused to do itself) or to create a double 

recovery because $17,120.05 was clearly the amount proven .in actual 

damages. 

117 u.s.c. § 504(b) provides in part: "The copyright owner is 

entitled to recover the actual damages suffered by him or her as a 

result of the infringement, and any profits of the infringer that 

are attributable to the infringement and are not taken into account 

in computing the actual damages •.•. 11 See H.R. Rep. No. 1476, 

94th Cong., 2d Sess. 161, reprinted in 1976 u.s. Code Cong. & 

Admin. News 5659, 5777 (ti[I]n cases where the copyright owner has 

suffered damages not reflected in the infringer's profits, or where 

there have been profits attributable to the copyrighted work but 

not used as a measure of damages, subsection (b) authorizes the 

award of both."). 

2Instruction 22 reads in part: "Under the law, copyright 

owners are entitled to recover the actual damages suffered by them 

as a result of the infringement, and any profits of the infringer 

that are attributable to the infringement and are not taken into 

account in computing the actual damages." 

Instruction 21 reads: "Actual damages are defined to mean any 

injury incurred by plaintiffs from a defendant's wrongful use of 

plaintiff's advertising material. In this regard, you may take 

into consideration any profits that plaintiffs would have realized 

from selling the advertising to a defendant or any other user in 

the Tulsa marketing area. The sum should approximate the 'value of 

the exclusive use' of plaintiffs' advertising material. 11 

8 

Appellate Case: 88-2293 Document: 01019625391 Date Filed: 12/12/1990 Page: 8 
III. 

The trial court denied Kleier's request (in its motion for 

entry of judgment) for an award of prejudgment interest on the 

verdict, by adopting what the court considered the majority view 

that prejudgment interest is not recoverable under the Copyright 

Act, because the Act does not expressly provide for it. See, ~, 

Blackffian v. Hustler Magazine, Inc., 620 F. Supp. 792, 802 (D.D.c. 

1985); Aitken, Hazen, Hoffman, Miller, P.C. v. Empire Constr. Co., 

542 F. Supp. 252, 264 (D. Neb. 1982); Baldwin Cooke co. v. Keith 

Clark, Inc., 420 F. Supp. 404, 409 (N.D. Ill. 1976). 

The standard of review related to prejudgment interest is set 

out in U.S. Industries, Inc. v. Touche Ross & Co., 854 F.2d 1223, 

1255 (lOth Cir. 1988) (citation omitted): "The decision whether or 

not to allow prejudgment interest rests within the sound discretion 

of the trial court. Accordingly, the standard of review on appeal 

is whether the trial court abused its discretion in awarding--or in 

declining to award--prejudgment interest." 

The question whether prejudgment interest may be awarded under 

the Copyright Act is one of first impression in this Circuit. We 

answer "yes" for reasons set out in these recent Seventh and Ninth 

Circuit decisions which hold that prejudgment interest may be 

awarded on claims for copyright violations: Frank Music Corp. v. 

Metro-Goldwyn-Mayer Inc., 886 F.2d 1545 (9th cir. 1989), cert. 

9 

Appellate Case: 88-2293 Document: 01019625391 Date Filed: 12/12/1990 Page: 9 
denied, 110 s. Ct. 1321 (1990), and Gorenstein Enterprises, Inc. v. 

Quality Care-USA, Inc., 874 F.2d 431 (7th Cir. 1989) . 

Frank Music, 886 F.2d at 1550, and Gorenstein, 874 F.2d at 

436, acknowledge that the Copyright Act does not provide for 

prejudgment interest; however, both cases cite decisional law 

supporting the award of such interest on federal claims even where 

the governing statute is silent on the issue. 

Virginia v. United states, 479 u.s. 305 (1987); Rodgers v . United 

States, 332 U.S. 371, 373 {1947). Expressly rejecting the argument 

that Congress did not intend to allow an award of prejudgment 

interest under the Act, 3 Frank Music held that prejudgment interest 

is necessary to compensate .a copyright plaintiff fairly .. Frank 

Music, 886 F.2d at 1552; see also Loeffler v. Frank, 108 S. ct. 

1965, 1970-71 (1988); Rodgers, 332 u.s. at 373; Miller v. 

Robertson , 266 u.s. 243, 258 (1924). "Prejudgment interest 

compensates the injured party for the loss of the use of money he 

would otherwise have had." Frank Music, 886 F.2d at 1550 (citing 

General Motors Corp. v. Devex Corp., 461 u.s. 648, 655-56 (1983); 

3

The Frank Music defendants argued that the congressional 

intent not to award prejudgment interest on copyright clai ms is 

clear from the fact that the Patent Act, 35 U.S.C. § 284 (1982), 

expressly allows prejudgment interest but the Copyright Act does 

not, even though the Acts' purposes are similar. Rejecting that 

argument, the court noted that prejudgment interest was awarded in 

patent cases long before amendment provided for it. Frank Music, 

886 F.2d at 1550-51. 

The court further noted that 111 0rdinarily "Congress' silence 

is just tha t--s il ence . 11 ' 11 Id. at n. 8 (quoting Community for 

Creative Non-Violence v. Reid, 109 S. Ct. 2166, 2177 (1989 ) 

(quoting Alaska Airlines, Inc. v. Brock, 480 U.S. 678, 686 

(1987))). 

10 

Appellate Case: 88-2293 Document: 01019625391 Date Filed: 12/12/1990 Page: 10 
Handgards, Inc. v. Ethicon, Inc., 743 F.2d 1282, 1299-1300 (9th 

Cir. 1984)) : Touche Ross, 854 F. 2d at 1256 ("Under federal law, the 

rationale underlying an award of prejudgment interest is to 

compensate the wronged party for being deprived of the monetary 

value of his loss from the time of the loss to the payment of 

judgment."). Frank Music adds that deterrence of infringement is 

also a benefit derived from prejudgment interest on copyright 

claims: 

Profits are awarded to the plaintiff not only to 

compensate for the plaintiff's injury, but also and 

primarily to prevent the defendant from being unjustly 

enriched by its infringing use of the plaintiff's 

property. See Sheldon v. Metro-Goldwyn Pictures corp., 

309 u.s. 390, 399 (1940); D. Dobbs Handbook on the Law of 

Remedies 1 (197 3). For the restitutionary purpose of 

this remedy to be served fully, the defendant generally 

should be required to turn over to the plaintiff not only 

the profits made from the use of the property, but also 

the interest on these profits, which can well exceed the 

profits themselves. See D. Dobbs, supra, at 169-70. 

Frank Music, 886 F.2d at 1552; see also Gorenstein, 874 F.2d at 436 

(without prejudgment interest compensation of plaintiff is 

incomplete and defendant has incentive to delay). 

We agree with Frank Music that it would be " anomalous" to hold 

that a plaintiff would be entitled to recover profits flowing from 

infringement but not revenue generated by the use of the profits. 

Frank Music, 886 F. 2d at 1552. Consequently the trial court abused 

its discretion by denying Kleier prejudgment interest on its 

copyright claims. Indeed Gorenstein goes so far as to state the 

trial court would abuse its discretion by not awarding prejudgment 

11 

Appellate Case: 88-2293 Document: 01019625391 Date Filed: 12/12/1990 Page: 11 
interest where infringement is flagrantly delibera~e, as it appears 

to be in this case. Gorenstein, 874 F.2d at 435. 

For these reasons we pronounce the rule that prejudgment 

interest is available to plaintiffs under the Copyright Act. This 

pronouncement comports with our earlier decision that "under 

federal law prejudgment interest is ordinarily awarded, absent some 

justification for withholding it." Touche Ross, 854 F.2d at 1256; 

see also Gorenstein, 874 F.2d at 436 (prejudgment interest 

presumptively available on all federal claims). consequently this 

case must be remanded for addition of prejudgment interest to the 

verdict. 4 

4 " (A] n award of prejudgment interest under federal law is 

governed by a two-step analysis. First, the trial court must 

determine whether an award of prejudgment interest would serve to 

compensate the injured party. Second, when an award would serve a 

compensatory function, the court must still determine whether the 

equities would preclude the award of prejudgment interest." Touche 

Ross, 854 F. 2d at 1257 (prejudgment interest awards should be 

governed by fairness). 

Because there is no federal statutory interest rate on 

prejudgment interest, the rate imposed will be left to the t rial 

court's discretion. 

We note that Gorenstein, while intending not to "straitjacket 11 

district judges, approved of the trial court's allowing compound 

interest and suggested, for convenience, using the prime rate. Id . 

at 436-37. Frank Music suggested the fifty-two week Treasury bill 

rate, but left the final decision to the trial court because it was 

better able to weigh the equities involved with imposition of 

interest. 886 F.2d at 1552. 

12 

Appellate Case: 88-2293 Document: 01019625391 Date Filed: 12/12/1990 Page: 12 
IV. 

Kleier asserts the trial court erred by granting Stokely 

Inc.'s. motion for partial summary judgment against Kleier's 

defamation claim, which claim is based on the following article 

that appeared in the Tulsa World, a local newspaper: 

1Pants 1 Slogan User Buckles Down 

Billboard businessman Bill Stokely claims a 

copyright infringement lawsuit filed against him Monday 

is a real kick in the pants. 

Tuesday, he vowed he'd file his own lawsuit before 

he'd get cuffed around in court for using the slogan: 1 We '11 Beat the Pants Off any Deal in Town. 1 Kleier 

Advertising Inc. of Louisville, Ky., claims in its u.s. 

District Court petition that it copyrighted the slogan 

several years ago and that the pants ad campaign, on 

behalf of several clients, has received national exposure 

in 'People , 1 'Toyota Today,' and 'Automotive News' 

magazines. 

Stokely claims he put up his first billboard using 

the slogan on behalf of Lister Pontiac in December 1984. 

Kleier claims it sent Stokely proofs of the ad 

campaign and that Stokely appropriated the program for 

its own use. 

'They approached me with the proofs on April 24, 

1985, five months after we'd put up the first billboard. 

I didn't respond (to the letter], 1 Stokely said, adding 

he later received another l etter, in February, from 

Kleier lawyers asking him to stop using the slogan. 

'They copied us. This is a great example and 

illustrates the fact you can sue anybody for anything 

anytime. I feel like it was our idea. Since when do you 

copyright such a saying anywav. I've been saying I'd 

beat the pants off my competition for years.' 

Both Kleier and Stokely's campaigns features [sic] 

a mannequin in boxer undershorts with trousers dropped to 

its ankles. 

13 

Appellate Case: 88-2293 Document: 01019625391 Date Filed: 12/12/1990 Page: 13 
'I think they [Kleierl are the ones caught standing 

with their pants down,' Stokely said. 'This is dumb.' 

(Emphasis added.) The trial court concluded that the emphasized 

statements were not defamatory on their face (not libel per se) 

and, therefore, Kleier was not entitled to recover because it did 

not plead special damages. In addition, the trial court found 

Stokely Inc.'s statements were privileged under Okla. Stat. title 

12, § 1443.1 ( 1981) and Restatement (Second) of Torts § 587 

(1981) . 5 

The standard of review for determining whether the trial court 

properly granted summary judgment is "whether the evidence is 

sufficient to create an issue for the jury." Banghart v. Hollywood 

General Partnership, 902 F.2d 805, 806-07 (lOth Cir. 1990); ggg 

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986); ~ 

also Black v. Hieb's Enters •. Inc., 805 F.2d 360, 364 (lOth Cir. 

1986) • 

We agree with the trial court that the statements are not 

defamatory or libelous per se, but do not agree that the statements 

were privileged under either the Oklahoma statute or the 

Restatement. 

5The court must decide as a matter of law whether a 

communication is privileged. Crittendon v. Combined communications 

Corp., 714 P.2d 1026, 1028 (Okla. 1985) (trial court erred by 

submitting libel claim to jury) (quoting Cobb v. Oklahoma Pub. Co., 

42 Okla. 314, 140 P. 1079, 1081 (1914} (citing Tuohy v. Halsell, 35 

Okla. 61, 128 P. 126 (1912))). 

14 

Appellate Case: 88-2293 Document: 01019625391 Date Filed: 12/12/1990 Page: 14 
Regarding privilege, even a cursory reading of section 1443.1 

shows that its legislative purpose is to protect First Amendment 

rights attached to all official reporting of any legislative or 

judicial proceedings. 6 See, ~, Crittendon v. Combined 

Communications, Corp., 714 P.2d 1026 (Okla. 1985) (television 

broadcast related to surgeon's performing unnecessary hysterectomy 

was privileged because it was accurate). There can be no serious 

argument that Bill Stokely's comments to the press amounted to 

"official reporting11 even if, as the trial court pointed out, the 

statements merely reflected Stokely, Inc.'s affirmative defenses 

set out in pleadings that were public record. 

6section 1443.1 states: 

A privileged publication or communication is one 

made: 

First. In any legislative or judicial proceeding 

or any other proceeding authorized by law; 

Second. 

duty; 

In the proper discharge of an official 

Third. By a fair and true report of any 

legislative or judicial or other proceeding authorized by 

law, or anything said in the course thereof, and any and 

all expressions of opinion in regard thereto, and 

criticisms thereon, and any and all criticisms upon the 

official acts of any and all public officers, except 

where the matter stated of and concerning the official 

act done, or of the officer, falsely imputes crime to the 

officer so criticized. 

(Emphasis added.) 

15 

Appellate Case: 88-2293 Document: 01019625391 Date Filed: 12/12/1990 Page: 15 
Section 587 of the Restatement7 is equally unhelpful to Kleier 

because the commentary indicates that the privilege extends only to 

communications made in court documents, attorney conferences and 

other matters officially related to court proceedings. See 

Restatement (Second) of Torts § 587 comment b (pre-complaint 

comments to civil and prosecuting attorneys or included in search 

warrant are privileged) and comment c (statements in pleadings and 

other official court documents are also privileged); see also, 

~, Pacific Employers Ins. Co. v. Adams, 168 P.2d 105, 107 (Okla. 

1946) (medical statement in pleadings that plaintiff could not 

return to work because he had syphilis was absolutely privileged) . 

Moreover, the Oklahoma .supreme Court recently held that the 

trial court must not only examine whether allegedly defamatory 

statements had some relation to a judicial proceeding but also 

whether ''the circumstances surrounding the communication or 

publication of the alleged defamatory statement had some relation 

to the proposed proceeding." Kirschstein v. Haynes, 788 P.2d 941 1 

951 (Okla. 1990). 

This inquiry narrows the scope of the privilege much more 

than the relevancy inquiry and turns to a large extent on 

7Restatement (Second} of Torts § 587 reads: 

A party to a private litigation or a private 

prosecutor or defendant in a criminal prosecution is 

absolutely privileged to publish defamatory matter 

concerning another in communications preliminary to a 

proposed judicial proceeding, or in the institution of or 

during the course and as a part of, a judicial proceeding 

in which he participates, if the matter has some relation 

to the proceeding. 

16 

Appellate Case: 88-2293 Document: 01019625391 Date Filed: 12/12/1990 Page: 16 
determining to whom the publication was made. A measure 

of protection is, thus, afforded to an alleged victim of 

defamation for publication to the public at large or to 

third parties unconnected with the proposed proceeding. 

Id. (emphasis added) (footnote omitted). Kirschstein adds that 

privilege depends not only on the content but the occasion of the 

communication. Id. n.26 (citing Asay v. Hallmark Cards, Inc., 594 

F.2d 692, 697-98 (8th cir. 1979)). "The privilege may be lost by 

unnecessary or unreasonable publication to one for whom the 

occasion is not privileged. Thus, unnecessary publication to the 

news media may result in loss of the privilege, as well as 

publication to those wholly unconnected with the judicial process. 11 

Kirschstein 788 P. 2d at 951 n. 27 (emphasis added) (citation omitted) 

(citing Asay, 564 F .2d at 698; Sullivan v. Birmingham, 11 Mass. 

App. ct. 359, 416 N.E.2d 528, 530-31 (Ct. App. 1981)); see also w. 

Keeton, D. Dobbs, R. Keeton & D. Owen, Prosser and Keeton on the 

Law of Torts § 114, at 820 (5th ed. 1984) {statements to newspapers 

concerning case not part of judicial proceeding and not absolutely 

privileged). 

Here, Bill Stokely's statements not only were unrelated to any 

official judicial function but they were directed via news media to 

the public, an audience wholly unconnected to the judicial process. 

Consequently neither the content nor the occasion of the 

communications warrants absolute privilege under Oklahoma statute 

and the Restatement. 

17 

Appellate Case: 88-2293 Document: 01019625391 Date Filed: 12/12/1990 Page: 17 
concluding the statements are not privileged, we will now 

address whether they are defamatory on their face (libel per se). 

Civil libel is defined at Okla. Stat. title 12, § 1441 (1981): 

Libel is a false or malicious unprivileged 

publication by writing, printing, picture, or effigy or 

other fixed representation to the eye, which exposes any 

person to public hatred, contempt, ridicule or obloquy, 

or which tends to deprive him of public confidence, or to 

injure him in his occupation . . . . 

The Oklahoma Supreme Court has held that communications alleged to 

be defamatory and therefore libelous fall into three categories: 

(1) Those not of defamatory meaning; 

(2) Those reasonably susceptible of 

defamatory and innocent meaning 

referred to as libel per quod); and 

both a 

(commonly 

( 3) Those clearly defamatory on their face 

(commonly referred to as libel per se). 

Miskovsky v. Tulsa Tribune co., 678 P.2d 242, 247 (Okla. 1983) 

(citing Fite v. Oklahoma Pub. Co., 146 Okla. 150, 293 P. 1073 

(1930)), cert. denie d, 465 u.s. 1007 (1984); see also Akins v . 

Altus Newspapers, Inc ., 609 P.2d 1263 (Okla. 1977), cert. denied, 

449 u.s. 1010 (1980). 

Whether an article is libelous per se is a question of law for 

the court rather than the jury to decide. 8 lQ. at 247; see also 

Nichols v. Bristow Publishing Co., 330 P.2d 1044, 1045 (Okla. 1957) 

8Should the trial court determine a communication is not 

libe lous per se, the jury must decide whether the communication is 

libelous per quod. The jury need not reach that question, however, 

if the plaintiff does not plead special damages. See, ~~ 

Miskovsky, 678 P.2d at 247-48 (citing Fite, 293 P. at 1077; 

McKenney v. Carpenter, 42 Okla. 410, 141 P. 779, 780 (1914}); 

Akins, 609 P.2d at 1267. 

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Appellate Case: 88-2293 Document: 01019625391 Date Filed: 12/12/1990 Page: 18 
(citing McKenney, 141 P. at 780). "'Per se' mean~ by itself, and 

without innuendo." Nichols, 330 P.2d at 1045 {citing Tulsa Tribune 

Co. v. Kight, 174 Okla. 359, 50 P.2d 350, 353 (1935)). 

The court must examine the entire article to determine whether . 

it is libelous per se: 111 Language out of context m.ay have a 

different meaning than the same language within the four corners o f 

the [publication].'" Miskovsky, 678 P.2d at 247 (quoting Winters 

v. Morgan, 576 P.2d 1152, 1154 (Okla. 1978)). Therefore libel per 

se will not be found unless by "fair construction" the articl e 

imputes to the plaintiff "fraud, deceit, dishonesty, or 

reprehensible conduct in its business " Roye r v. Stoody 

Co., 192 F. Supp. 949, 953 (W. D. Okla. 1961) (trade libel cas e 

applying Oklahoma law) (quoting National Ref. Co. v. Benzo Gas 

Motor Fuel co., 20 F.2d 763, 771 (8th cir. ), cert. denied, 275 

u.s. 570 (1927)); see also Nichols, 330 P.2d at 1045 (language used 

in a newspaper article which, when given its ordinary, natural, a nd 

obvious meaning, meets the elements of the Oklahoma statute i s 

libelous per se and actionable) (citing Dusabek v. Martz, 121 Okl. 

241, 249 P. 145 (1926)); Paramount Pictures, Inc. v. Leaders 

Press. Inc., 106 F.2d 229 (lOth Cir. 1939). To be libelous per se, 

the publication must lead a "reasonable person to foresee" it would 

have a "disparaging effect on another 1 s property." 

Pictures, 106 F.2d at 231. 

19 

Paramount 

Appellate Case: 88-2293 Document: 01019625391 Date Filed: 12/12/1990 Page: 19 
The trial court concluded the publication was not libelous per 

se because (1) Bill Stokely's "statements were not made in context 

of uttering a fact, but rather as an expression of an opinion, n and 

(2) "the statements were cushioned by words such as, "'I feel like 

it was our idea,• and 'I've been saying I'd beat the pants off my 

competition for years. ' 11 Order dated November 17, 1987, at 3 

(emphasis added). Kleier asserts the trial court erred by focusing 

only on portions of the article because the "gist" or "sting" o f 

the entire article was libelous per se in that Bill Stokely accused 

Kleier of engaging in unethical activities such as plagiarism and 

fraud. Appellant's Reply Brief at 19. 

The trial court cited no authority and we are aware of none 

for the proposition that a publication which, in the entire 

context, is libelous per se would be robbed of its sting merely 

because it is couched in the subjective. Without reaching that 

question, we conclude the publication was not libelous per se 

because of the following factors. 

First, the article makes clear the nature of the lawsuit, that 

is, Kleier is suing Stokely, Inc. for copyright infringement, not 

vice-versa. The article further states that Kleier is an 

advertising company which allegedly copyrighted the advertising 

program several years ago and has enjoyed national success as well 

as press from it. It sets out Kleier's claims in the litigation 

(if not as colorfully as it sets out Stokely, Inc.'s, perhaps more 

20 

Appellate Case: 88-2293 Document: 01019625391 Date Filed: 12/12/1990 Page: 20 
credibly) that Kleier sent Stokely, Inc. the proofs of its "Beat 

the Pants" program and that Stokely, Inc. appropriated the program 

for its own use. The article also points out that both Kleier's 

and Stokely 1 s ad campaigns feature a mannequin in boxer shorts with 

trousers dropped to its ankles. 

Because Kleier's and Stokely, Inc.'s claims were both 

published (considering the context of the entire article), the 

publication did not, in our opinion, violate section 1441 by 

exposing Kleier to "public hatred, contempt, ridicule or obloquy," 

which would "tend to deprive [it] of public confidence, or to 

injure [its] ... occupation." 

Second, where the article reported both sides of the 

controversy, Bill Stokely 1 s subjective remarks would lead the 

reasonable person to infer he is merely stating his position 

regarding the lawsuit. Paramount Pictures, 106 F.2d at 231. In 

that context the statements would not violate section 1441. 

Third, while stopping short of holding that a humorous article 

could never be per se libelous, we conclude that, in context, the 

jocular tenor of this article with its numerous plays on "pants 

down" humor strips the publication of any sting, or perhaps kick, 

directed at Kleier. Indeed we believe that a fair construction, 

Royer, 192 F. Supp. at 953, of language "within the four corners of 

the publication," Miskovsky, 678 P.2d at 247; Winters, 576 P.2d at 

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Appellate Case: 88-2293 Document: 01019625391 Date Filed: 12/12/1990 Page: 21 
1154, would leave the reasonable reader with an impression more 

favorable to Kleier than to Stokely, Inc. 

Finally, contrary to Kleier's assertion, this case is easily 

distinguished from cases such as Nichols that contain none of the 

instant factors to balance the effect of the disparaging 

publication. Nichols, 330 P.2d 1044 (trial court erred by 

dismissing action because publication was libelous per se) . There 

the non-humorous, one-sided article stated that Nichols attempted 

to destroy the value of a publishing plant after he profited from 

the sale of the plant. The appellate court held the publication 

tended to expose Nichols to public contempt and loss of confidence 

by characterizing his· dealings as 11 shady" and "on the sneak11 and 

implying that several local business firms refused to do business 

with him. 9 That sort of direct, unmitigated attack on Kleier's 

business scruples is simply not present here. 

For these reasons, the trial court did not err by granting 

summary judgment on Kleier's defamation claim, because it appears 

there was insufficient evidence to support a verdict that Stokely's 

statements were libelous per se under section 1441. See Liberty 

Lobby, 477 u.s. at 252 (summary judgment appropriate where fairminded jury could return a verdict for plaintiff on evidence 

9The Nichols article reads in part: "[Nichols] later 

discovered that there was a large percentage of business firms in 

the city that did not enjoy doing business with organizations that 

openly operate with shady ethics. In recent years his publishing 

activities have been maintained on a sneak basis." Id. at 1045. 

22 

Appellate Case: 88-2293 Document: 01019625391 Date Filed: 12/12/1990 Page: 22 
presented). Because Kleier did not allege any special damages, the 

trial court properly granted Stokely, Inc.'s motion for partial 

summary judgment by dismissing Kleier's defamation claim. 

v. 

Kleier contends the trial court erred by directing the verdict 

a gainst Kleier on its unfair competition claims asserted under 

section 43(a) of the Lanham Act, 15 U.S.C.A. § 1125(a), and the 

Oklahoma Deceptive Trade Practices Act, Okla. Stat. title 78, § 51 

et seq. (1981). 

Kleier claims unfair competition on the ground that Bill 

Stokely's statements in the Tulsa World deceived the public by 

creating the impression Stokely originated the mannequin display 

and slogan. As actual damages, Kleier sought $400.00 for 

corrective advertising that would occupy the same amount of space 

in the Tulsa World as did the story containing Stokely's 

statements. 

After lengthy colloquy with both parties, the trial court 

concluded there was "not one iota of evidence 11 that Bill 

Stokely's statements affected Kleier's right to sell its "Beat the 

Pants" program in the Tulsa territory. Tr. 399-400. The trial 

court noted that although Kleier claimed the billboard adversely 

affected its business, the billboard no longer existed by the time 

23 

Appellate Case: 88-2293 Document: 01019625391 Date Filed: 12/12/1990 Page: 23 
Bill Stokely made the statements. Consequently the trial court 

granted Stokely's motion for a directed verdict, stating it simply 

didn't believe a jury could, on those facts, return a verdict for 

the plaintiff and against the defendant. Tr. 400. 

The standard for reviewing a directed verdict is the same as 

for denial of a motion for judgment NOV: The trial court must 

determine "whether there is evidence upon which the jury could 

properly find a verdict 11 when viewing the evidence (and all 

reasonable inferences from it) in favor of the party resisting the 

motion. Graham, 906 F.2d at 1401 (quoting McGraw, 736 F.2d at 

612-13). "' [T)he trial judge may grant a motion for directed 

verdict only when all reasonable inferences to be drawn from the 

evidence are so in favor of the moving party that reasonable 

persons could not differ in their conclusions.'" Banghart, 902 

F.2d at 807 (quoting FDIC v. Palermo, 815 F.2d 1329, 1335 (lOth 

Cir. 1987) (citing Hidalgo Properties, Inc. v. Wachovia Mortgage 

~, 617 F.2d 196, 198 (lOth Cir. 1980))); see also McKinney v. 

Gannett Co., 817 F.2d 659, 663 (lOth Cir. 1987) (motion for 

directed verdict should be denied if reasonable men could draw 

different inferences from facts). 

Applying these standards, we conclude the trial court did not 

err by directing the verdict on Kleier's unfair competition claims. 

At 1.5 u.s.c.A. § 1.117(a) (Supp. 1990), the Lanham Act limits a 

plaintiff's recovery to (1) defendant's profits, (2) plaintiff's 

24 

Appellate Case: 88-2293 Document: 01019625391 Date Filed: 12/12/1990 Page: 24 
damages and (3) the costs of the action. Section 54(a) of the 

Oklahoma Deceptive Trade Practices Act provides that actual damages 

need not be proven to obtain injunctive relief, but a plaintiff is 

entitled to actual damages if they are alleged and proven. Kleier 

d{d not seek injunctive relief below and, on appeal, cites to no 

proof in the record it incurred actual damages as a result of Bill 

Stokely • s statement in the Tulsa World. Indeed it would seem 

actual damages would be difficult to prove where, as the trial 

court pointed out, the infringing billboard no longer existed when 

Bill Stokely made his statements. Consequently we conclude the 

trial court correctly directed the verdict against Kleier regarding 

deceptive trade practices, because Kleier presented no evidence on 

which the jury could have found in its favor on either the federal 

or state claim. 

VI. 

We affirm the trial court 1 s interpretation of the jury 

verdicts and dismissal of the defamation and deceptive trade 

practices claims. We reverse the trial court's denial of 

prejudgment interest on Kleier's copyright infringement claim, and 

remand for addition of prejudgment interest to the verdict at a 

rate to be determined at the discretion of the trial court. 

AFFIRMED in part, REVERSED in part, and REMANDED with 

directions. 

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