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Monster Energy Fails to Transfer Liability For Use of Beastie Boys Records to Deejay

Thursday, November 7, 2013
By Anandashankar Mazumdar

Nov. 5 --The maker of Monster energy drinks could not reasonably have relied upon a mashup artist's comment that a video was “dope!” to conclude that the artist had the right to license use of Beastie Boys recordings to Monster for use in the promotional video, the U.S. District Court for the Southern District of New York ruled Nov. 4 (Beastie Boys v. Monster Energy Co., S.D.N.Y., No. 1:12-cv-06065-PAE, 11/4/13).

Dismissing a third-party complaint against the disc jockey, the court said that it could not shift any potential liability for infringement that it might face to the mashup artist.

Deejay Created Mashup Upon Request
The Beastie Boys are a rap group founded in 1981 in New York. Their 1986 album Licensed to Ill was a smash hit and from then until 2004, they had seven platinum albums. As of 2013, the Beastie Boys had sold more than 20 million albums.

Zach Sciacca is a disc jockey and well-known mashup artist known as “Z-Trip.” In 2009, the Beastie Boys asked him to create a 23-minute long mix or mashup of several Beastie Boys recordings to promote their next album and he posted the mashup on his own website with permission from the Beastie Boys.

Monster Energy Co. of Corona, Calif., is a producer of energy drinks, beverages containing high levels of stimulants such as caffeine. The Monster line of drinks was launched in 2002 by Hansen's, which had been selling juices and sodas since 1935. In 2007, the parent company's name was changed from Hansen's to Monster, and it continues to manufacture a range of beverages under several different brand names. It holds 35 percent of the energy drink market.

Monster hosted a snowboarding event in Canada called Ruckus in the Rockies 2012, at which Z-Trip performed. Afterwards, Monster created a promotional video using footage taken at the event and downloaded the mashup from Z-Trip's website for the soundtrack. In a brief e-mail exchange between Monster and Z-Trip, Z-Trip said that the video was “Dope!”

Monster released the promotional video, which included as background music Z-Trip's mashup of Beastie Boys tracks and also used the Beastie Boys' names. Monster's website also made the mashup available for download. The video and the mashup were also made available through YouTube and other online outlets. The Beastie Boys sued, alleging nine claims of copyright infringement of the recordings and compositions, a claim under the Lanham Act, and a claim under N.Y. Civ. Rights Law §51.

Monster then brought a third-party claim against Z-Trip. According to Monster, it had obtained permission from Z-Trip to use the recording. Monster alleged breach of contract and fraud, alleging that Z-Trip had falsely claimed that he had the right to license use of the track to Monster.

Z-Trip moved for summary judgment on Monster's claims against him. The Beastie Boys filed a memorandum in support of the motion.

No Enforceable Contract
Judge Paul A. Engelmayer first determined that the evidence did not show that there was any enforceable contract created between Monster and Z-Trip regarding use of the mashup from his website.

In reaching this conclusion, the court determined that the communications between Monster's Canadian marketing director Nelson Phillips and Z-Trip could not be reasonably interpreted to create the understanding that Z-Trip had the right to license use of the mashup and that he was granting such a license to Monster.

Furthermore, the court said, there was no “credible basis” for Monster to “reasonably conclude that Z-Trip had the right to license third parties such as Monster to use the underlying copyrighted material owned by the Beastie Boys.”

Turning to Monster's claim of fraud, the court described it as “risible.” There was no evidence that Z-Trip had acted with fraudulent intent, the court said. The court said:

Viewed charitably to Phillips, his assembled communications with Z-Trip are instead consistent at best with a miscommunication. Phillips did not make at all clear to Z-Trip, and Z-Trip plainly did not appreciate that Phillips might not be aware, that Monster needed certain licenses in connection with its creation and intended use of the promotional video. Nor did Phillips make clear to Z-Trip that Monster believed that Z-Trip had authority to convey such licenses on the Beastie Boys' behalf, and that he had done so by his idiomatic shorthand “Dope!”

The court also found “reckless” Monster's delegation to Phillips the responsibility to make all these arrangements without oversight.

The court found no motive on Z-Trip's part for defrauding Monster, the court said. “Z-Trip had every incentive to keep Monster and the Beastie Boys happy. And Z-Trip's later conduct, ruing his failure to prevent Monster's misuse of the Beastie Boys' original recordings from occurring, is not easily consistent with fraud.”

There was no basis for a reasonable jury to conclude that Monster had reasonably relied on fraudulent statements by Z-Trip, the court said, even if the cause of the problem had been Phillips's lack of understanding of copyright law.

“The standard for reasonable reliance is not measured by the effect on an employee with no apparent qualifications to negotiate complex matters of licensing and copyright law,” the court said. “ The two conversations and one email exchange between the two men--short, casual, and vague--did not supply a reasonable basis on which Monster, a major corporation, could conclude that it had obtained the necessary license to make use for its own purposes of the Beastie Boys' original recordings.”

The court also noted that there was no evidence that anyone at Monster had looked into the matter before taking action.

“Indeed, Phillips testified that he was not even thinking about licensing during his interactions with Z-Trip,” the court said. “Rather, Phillips testified, he believed that, because Z-Trip's remix was 'available for free download on his website … it's there for use. For free.' ”

The court concluded that should Monster be found liable to the Beastie Boys, that it could not transfer that liability to Z-Trip. The court thus granted summary judgment and dismissed the claims against Z-Trip.

The Beastie Boys were represented by Theodore Conrad Max of Sheppard, Mullin, Richter & Hampton LLP, New York. Monster was represented by Adam M. Cohen of Kane Kessler P.C., New York.

To contact the reporter on this story: Anandashankar Mazumdar in Washington at amazumdar@bna.com

To contact the editor responsible for this story: Naresh Sritharan at nsritharan@bna.com


Text is available at http://www.bloomberglaw.com/public/document/Beastie_Boys_et_al_v_Monster_Energy_Company_Docket_No_112cv06065_.

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