Source: https://www.complexip.com/mayweather-knocks-out-competition-in-case-for-copyright-infringement/
Timestamp: 2019-04-20 08:55:14+00:00

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The Fourth Circuit Court of Appeals held that speculative evidence was not enough to show a genuine issue of material fact relating to damages in a copyright infringement lawsuit. Dash v. Mayweather, et al., Case No. 12-1899 (4th Circuit, September 26, 2013) (available here). Anthony Dash sued Defendants Floyd Mayweather, Jr. (“Mayweather”), Mayweather Promotions, Mayweather Promotions LLC, Philthy Rich Records, Inc., and World Wrestling Entertainment, Inc. (“WWE”) for copyright infringement. Dash argued that Mayweather Defendants violated his copyright by playing a variant of his copyrighted music during Mayweather’s entrance at two WWE events. The lower court granted summary judgment in favor of Defendants and Dash appealed. The Fourth Circuit affirmed.
In 2005, Dash created an instrumental musical track called “Tony Gunz Beat” (“TGB”). Dash never received any revenue from any of his musical compositions. In 2008, Mayweather, a famous boxer, entered into a contract with WWE to perform at Wrestlemania XXIV. Mayweather chose to enter the arena to a song called “Yep.” Mayweather’s manager told the WWE that Mayweather owned all of the rights to the song. The song was played for around 3 minutes while Mayweather entered the arena. Dash alleges that “Yep” added lyrics to TGB. In 2009, Mayweather entered into another contract with the WWE to appear as a guest host. “Yep” was played in connection with his appearance.
Dash alleges that he created TGB in 2005, however he did not file a copyright application until 2009. Dash alleges that Defendants’ use of “Yep” at both WWE events violates his copyright in TGB. Thus, this alleged infringement occurred after creation but before copyright registration. The lower court separated the litigation into two sections: liability and damages. The parties jointly moved for summary judgment regarding Dash’s entitlement to damages under § 504 of the Copyright Act (actual and profit damages). Dash’s motion contained a report by expert Dr. Michael Einhorn (the “Einhorn Report”), which concluded that Dash’s actual damages were no more than $3,000 based on licensing fees paid to other copyright holders for use of songs at Wrestlemania XXIV. The Einhorn Report concluded that (1) $541,521 of the WWE’s net profit from Wrestlemania XXIV was attributable to the use of TGB; (2) $480,705 of Mayweather’s net profits from his appearance at Wrestlemania XXIV was attributable to the infringing use; and (3) Dash should receive at least $1,019,226 in profit damages plus actual damages. The lower court held that Dash was not entitled to damages because he failed to meet his burden of proof.
§ 504(a) states that “an infringer of copyright is liable for either (1) the copyright owner’s actual damages and any additional profits of the infringer, as provided in subsection (b); or (2) statutory damages, as provided by subsection (c).” 17 U.S.C. § 504(a). “ 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.” 17 U.S.C. § 504(b). First, the Fourth Circuit looked at whether Dash was entitled to actual damages under § 504(b), which is typically measured by the extent of injury caused to the copyrighted work’s market value at the time of infringement. It is the copyright holder’s burden to prove the existence of a causal connection between the alleged infringement and loss of anticipated revenue. The lower court concluded that Dash was not entitled to actual damages because he did not offer sufficient evidence to indicate the value of TGB. Dash argues on appeal that the Einhorn Report provides evidence of TGB’s value, which is based on the $3,000 lost licensing fee. Defendants moved for summary judgment regarding Dash’s damages, and thus had to show no genuine dispute as to the existence of any actual damages. Defendants satisfied this requirement with Dash’s admission that he never received revenue from TGB.
The Fourth Circuit concluded that the Einhorn Report was too speculative to show actual damages. First, the Einhorn Report failed to expressly conclude that TGB had a market value, instead it stated that Dash could have earned a maximum sum of $3,000 as a licensing fee. This is not enough to establish that Dash was entitled to actual damages. “The Einhorn Report’s failure to clearly state that TGB had a fair market value is notable in light of the fact that Dr. Einhorn was retained for the express purpose of evaluating the economic damages resulting from [Defendants’] alleged infringement of [TGB]. His omission of a clear statement of value suggests that he could not conclude, either with certainty or sound reasoning, that Dash would have been paid a licensing fee for [Defendants’] use of TGB.” Dash, Slip Op. P. 27. Even if the Einhorn Report had concluded that the use of TGB at the WWE events was of some value to Defendants, that evidence would still be too speculative to support Dash’s contentions that there was a genuine dispute regarding actual damages. Further, Dash did not present any evidence that he ever received compensation for any of his works.
“Evidence of licensing fees paid to other artists for the use of other works may, in some cases, be sufficient to support the conclusion that a copyright holder would have been entitled to such a fee for the use of his work; however, such evidence may properly be rejected as a measure of damages if it is too speculative.” Dash, Slip Op. P. 33. Evidence of WWE’s licensing deals with other copyright holders can be sufficient if those licenses were based on a comparable use and on whether the work was comparable to TGB. The WWE’s licensing deals were with well-known artists, and thus were too speculative and inapposite to be used to compare with Dash. “[A]lthough the Einhorn Report acknowledged that ‘Yep’ was ‘a new derivative work based purportedly on [TGB],’ it failed to explain at all how this fact impacted the analysis of Dash’s actual damages claim.” Dash, Slip Op. P. 40. Thus, the Fourth Circuit affirmed summary judgment in favor of Defendants regarding actual damages.
Turning to profit damages, the Fourth Circuit noted that the lower court granted summary judgment in favor of Defendants because “it found that Dash had failed to present evidence that [Defendants’] revenues bore any causal link to the infringement.” Dash, Slip Op. P. 50. Dash had an affirmative duty to prove that the Defendants’ gross revenues were reasonably related to the alleged infringing use of TGB. Thus, Dash had the burden to prove that the connection was at least hypothetically possible. If Dash could prove a conceivable connection between the infringement and the claimed revenues, then his next step would be to prove a causal connection between the infringement and the level of Defendants’ revenues. “In order to demonstrate a causal link, the plaintiff must show that the infringement could reasonably be viewed as one of the causes of the claimed revenues. In order to rebut a defendant’s evidence that the claimed revenues are not attributable to the infringement, the plaintiff must show that at least some portion of the revenues was actually generated by the infringement, rather than by other factors.” Dash, Slip Op. P. 63.
The Fourth Circuit noted that many of the revenue streams claimed by Dash had no conceivable connection to the infringement because they involved revenues that customers and businesses paid to Defendants prior to discovering that “Yep” would be played. Dash presented no evidence that the playing of “Yep” increased any of the WWE revenue streams. Dash argued that he did not have to prove this, instead he argued that because the WWE broadcasts included “Yep,” the revenues from the events were derived exclusively from TBG. If the infringement forms a significant part of the product generating the claimed revenue, then this can be enough to establish a causal link. “However, when, as here, the infringing content forms only a small, incidental portion of the products that generated the claimed revenue streams, further evidence is necessary to link the claimed revenues to the infringement.” Dash, Slip Op. P. 66. As a result, the Fourth Circuit affirmed summary judgment in favor of Defendants regarding profit damages.

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