Not Licensed To Ill: Why Your Corporate Marketing Employees Need Training on IP Licensing

The case, Beastie Boys et al v. Monster Energy Co, U.S. District Court, Southern District of New York, No. 12-06065 addressed the circumstances under which a corporate defendant can be held liable for acts of willful copyright infringement committed by its employees within the scope of their employment or for its benefit. In a Dec. 4 decision, U.S. District Judge Paul Engelmayer refused to throw out Beastie Boys’ $1.7 million jury verdict against Monster Beverage Corp over the energy drink company’s use of the hip-hop group’s music in a promotional video without permission.

IP BLOG_monster energyThat decision noted that the jury listened to testimony from the employee of Monster who prepared the offending video, where he admitted that he lacked any training in music licensing. Nevertheless, the Monster employee also testified he previously produced a dozen similar “recap” videos for Monster. In those earlier videos, the employee testified that he did contact the artists to seek permission to use the respective artists’ music. The Monster employee was therefore familiar with the process of seeking authorization. Notwithstanding this awareness, the Monster employee did not seek permission from the Beastie Boys or their manager to use their music, nor did he believe that anyone else at Monster had done so. Judge Englemayer held that the jury could thereby determine that the Monster employee acted in reckless disregard of the Beastie Boys rights when using the Beastie Boys’ music without authorization in the promotional video.

Judge Engelmayer’s decision concludes with the observation that “[a]s the Beastie Boys’ counsel noted in closing argument, Monster, at the time, did not perform any training of employees related to the use of copyrighted or trademarked content; it therefore left [the Monster employee] to his own devices in producing the video.” One must ask how Monster’s absence of music licensing training to its employees would have made any difference in this case, given the employee’s prior experience with, and habit of obtaining required authorization from the artists. The answer is simple: A corporate training program must implement compliance policies and procedures for requesting and securing material subject to license, with a direct report to corporate officers tasked with compliance.

The take away here is that the preparation of the offending video fell within the employee’s scope of work, for which no training was received, and his misdeeds were imputed to his employer. As noted in the decision, where the defendant is a corporation, it can be held liable for acts of willful infringement committed by its employees within the scope of their employment or for its benefit. See Sygma Photo News, Inc. v. High Soc. Magazine, Inc., 778 F.2d 89, 92 (2d Cir. 1985) (citing Shapiro, Bernstein & Co. v. H.L. Green Co., 316 F.2d 304, 308–09 (2d Cir. 1963)) (“All persons and corporations who participate in, exercise control over, or benefit from the infringement are jointly and severally liable as copyright infringers.”); Arista Records LLC v. Lime Grp. LLC, 784 F. Supp. 2d 398, 437 (S.D.N.Y. 2011) (same). “[A]n employer is responsible for copyright infringement committed by an employee in the course of employment, under the normal agency rule of respondeat superior.” U.S. Media Corp. v. Edde Enter., Inc., No. 94 Civ. 4849 (MBM)

Image courtesy of Flickr by Mike Mozart

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