Beastie Boys et al v. Monster Energy Corporation
OPINION & ORDER: For the foregoing reasons, the Court hereby awards the Beastie Boys attorneys' fees in the amount of $667,849.14. The Clerk of Court is directed to terminate the motion pending at docket number 188, and to close this case. (As further set forth in this Order) (Signed by Judge Paul A. Engelmayer on 6/15/2015) (kl) Modified on 6/15/2015 (kl).
I-INITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
DATE FILED: Ô / l6
BEASTIE BOYS, et al.,
12 Civ.6065 (PAE)
OPINION & ORDER
MONSTER ENERGY COMPANY,
PAUL A. ENGELMAYER, District Judge:
This decision resolves a post-trial application for attorneys' fees and costs. Between May
27 and June 5, 2014, the Court presided over a jury trial in which the hip-hop group the Beastie
Boys and affiliated plaintifßl (collectively, the "Beastie Boys") pursued claims against Monster
Energy Company (o'Monster"), the beverage company. The jury found for the Beastie Boys on
all claims-for copyright infringement in violation of the Copyright Act,17 U.S.C. $
and false endorsement in violation of the Lanham
15 U.S.C. $ 1051 et
total of $1.7 million in damages. On December 4,2014, the Court denied Monster's post-trial
motion for judgment as a matter of law.
Now pending is the Beastie Boys' motion for an award of fees and costs under $ 505 of
the Copyright Act and $ 1117 of the Lanham
Act. For the reasons that follow, the Court finds
that the Beastie Boys are entitled to recover fees in connection with Monster's willful copyright
I The Beastie Boys are a New York partnership. The other plaintiffs are Michael Diamond
("Mike-D"), a Beastie Boys member; Adam Horovitz ("Ad-Rock"), a Beastie Boys member;
Dechen Yauch, executrix of the Estate of Adam Yauch ("MCA"), a late Beastie Boys member;
and Brooklyn Dust Music, a distinct entity through which the Beastie Boys did business.
infringement, although not in connection with Monster's violation of the Lanham Act.
Considering all relevant circumstances, the Court finds that an award of $667,849.14 in
substantially less than the award of $2,385,175.50 sought by the Beastie Boys-is warranted.
The Court also holds that the Beastie Boys are entitled to costs, but under Local Rule 54.1 leaves
to the Clerk of Court the tabulation, in the first instance, of such costs.
This decision proceeds in four parts. First, the Court recaps the pertinent background
this case. Second, the Court addresses the Beastie Boys' claims of entitlement to fees under the
Copyright Act and the Lanham Act. Third, the Court explains the amount of its fee award.
Fourth, the Court addresses the Beastie Boys' application for costs.
The Court assumes familiarity with this case's history, including the Court's December 4,
2014 Opinion denying Monster's post-trial motions. See Dkt. 182, reported at Beastie Boys v.
Monster Energt Co., No. 12 Civ.6065 (PAE),2014 WL 6845860 (S.D.N.Y. Dec. 4,2014)
[hereinafter Beastie Boysl. The history most relevant to the pending fee application follows.
On May 5,2012, Monster hosted a promotional event called the "Ruckus in the Rockies,"
which consisted of a snowboarding competition and an after-party. See Trial Transcript ("Tr.")
t092-93. The performers at the after-party included ZachSciacca,
records and performs under the name
jockey ("DJ") who
"Z-Trip." Tr. 356,954,964-65, 1096-99. In 201 l, Z-Trip
had entered into an agreement with the Beastie Boys to create a remix of some of their songs to
promote the group's then-upcoming album, "Hot Sauce Committee Part
79,356-57, 954-58, 969. The remix was entitled "Beastie Boys All-Access Megamix" (the
Tr. 429-30. Under the agreement, Z-Trip did not obtain any rights to the
underlying Beastie Boys songs
e Tr. 27 8-7 9, 3 06, 358-5 9, 97 3, 97 5-7 6.
Soon after the 2012 Ruckus in the Rockies, Monster's regional marketing director,
Nelson Phillips, oversaw the creation of a recap video with highlights from the event. Tr. 1114-
16. The video promotes Monster's brand and its energy drinks. For the video's soundtrack,
Phillips used excerpts of the Megamix that include portions of five Beastie Boys songs; these
songs are the background music to approximately 80Yo of the four-minute
video. Tr. 11I4-I5.
The video also contains text referring to the band and one of its three members, Adam Yauch,
a/Wa"MCA," who had died days before the Ruckus event. SeePX211. Monster did not obtain,
and never attempted to obtain, permission from the Beastie Boys or their management to use the
Beastie Boys' music or names in the promotional video. See, e.g.,Tr.
1115-16, ll73,1316-17. Phillips later testified that he believed thatZ-Trip had provided
legally sufficient authorization for him to use the Megamix, including the underlying Beastie
Boys' songs, in the video. Tr. 1115-16, 1170. Phillips testified that Z-Trip had conveyed this
authorization to him orally during the after-party, see Tr. 369-70, 456-57,496, and again
through a short email exchange in which Phillips sent the video to Z-Trip for 'oapprov[al]," and
Z-Trip responded, ooDope!," see Tr. 1119,
Z-Trip firmly denied giving any such
authorization, or telling anyone at Monster that he had any rights to the Beastie Boys' music.
Tr.369-70, 456-57, 496.
On May 9,2012, Monster posted the promotional video on its website, YouTube channel,
and Facebook page. See
Tr.307, 53I, l1l9-21, 1124-26,1266. Monster also sent press
releases to various snowboardingmagazines and websites to promote the
The following month, Monster received a letter from counsel for the Beastie Boys, which stated
that Monster did not have permission to use the Beastie Boys' music in the video.
1269. Phillips then removed the video from Monster's YouTube channel. Tr. 1130. He later
edited the video, to replace the music and remove the references to the Beastie Boys, and then
it. Tr. 1130-31,
1277. As of August 2012, the video had been viewed I3,34I times.
On August 8,2012, the Beastie Boys filed suit against Monster in this District. Dkt.
The Complaint brought claims of copyright infringement in violation of the Copyright Act and
false endorsement in violation of the Lanham Act.
On October 4,2012, Monster filed an Answer. Dkt. 5. Monster denied almost every
factual allegation in the Complaint or stated that it lacked knowledge sufficient to enable it to
form a belief as to its truth. Monster also raised 12 affirmative defenses. Several sought to
deflect responsibility for any infringement onto Z-Trip. In this vein, the Answer asserted that
(1) Monster had received permission from Z-Trip to use the Beastie Boys' music; (2) in using the
band's music in its video, Monster had reasonably relied on Z-Trip's apparent authority as an
agent for the Beastie Boys; and (3) any injury to the Beastie Boys was due not to Monster but
instead to a breach of contract or fraud by
Z-Trip. Id. at 13.
The following day, October 5,2012, Monster brought a third-party Complaint againstZ-
Trip. Dkt. 9. Monster alleged thatZ-Trip had caused any damage to the Beastie Boys for which
Monster might be found liable by
contracting with Monster to allow it to make unrestricted
use of the Megamix, and (2) fraudulently leading Monster to believe that Z-Trip had authority to
license the Beastie Boys' recordings contained in the Megamix. Id.nn 12-23,28-33.
On August 1,2013, after discovery,Z-Trip moved for summary judgment on Monster's
claims against him. Dkt. 36-38. The Beastie Boys filed a memorandum supporting Z-Trip's
On November 4,2013, the Court granted summary judgment in favor
of Monster's third-party claims.
of Z-Trip on both
Dkt. 5I, reported at Beastie Boys v. Monster Energy Co.,
983 F. Supp. 2d 338 (S.D.N.Y. 2013) [hereinafter Z-Trip]. As to the breach of contract claim,
and "fleeting" communications between
the Court held that, based on the informal,
Phillips and Z-Trip,
juror could not find an offer, sufficiently clear acceptance, or
consideration . . . let alone all three," and thus no contract between Monster and Z-Trip could be
found. Id. at348,350. And even assuming that Phillips andZ-Trip had entered into some form
of contract, it would have taken
heroic effort of explication" and "flout[ed] common sense"
to interpret the contract to include a license to use the Beastie Boys' music in the video. Id. at
351. As to Monster's fraud claim, the Court found the record devoid of evidence thatZ-Triphad
with fraudulent intent or that Monster had reasonably relied on Z-Trip's representations.
Id. at351-53. The Court stated that it had been reckless for Monster "to delegate to Phillips
alone the responsibility by which Monster was to acquire, for commercial exploitation, various
intellectual [property] rights presumptively belonging to an iconic band." Id. at 352. "Monster's
reliance on Phillips to protect its interest in these matters was perforce unreasonable." Id. at 353.
Trial on the Beastie Boys' claims against Monster commenced on May 27,2014. At the
final pretrial conference on }i4ay 22,2014, Monster, for the first time, conceded liability
copyright infringement claims.
as to the
SeeDkll4l, at48. Accordingly, the issues litigated attrial
were liability for the Lanham Act claim, and damages as to both the Copyright and Lanham Act
claims. During the eight-day trial, the parties called a dozen witnesses, including four experts.
On June 5,2014, the jury retumed its verdict. See Dkt.
claims, the jury found that each of Monster's
awarded a total of
actual damages. Id.
I47. Onthe Copyright Act
acts of infringement had been
million in statutory damages and, alternatively,
total of $ I million in
On the Lanham Act claim, the jury found Monster liable, found that
had engaged in intentional deception, and awarded the Beastie Boys $500,000
in damages. Id.
jury also found that Monster had acted in bad faith in causing the false endorsemerÍ. Id.
On December 4,2014, the Court issued a lengthy decision, denying Monster's post-trial
challenges to the verdict. See Dkt. 182
The Beastie Boys' Motion for Fees and Costs
On January 16,2015, the Beastie Boys moved for an award of attorneys' fees and costs.
Dkt. 188, 189 ("Anderson Decl."), 190 ("Beastie Br."). On March 6,2015, Monster filed its
opposition. Dkt. 205 ("Kahn Decl."), 206 ("Schiano-Strain Decl."), 207 ("Monster Br."). On
March 20,2015, the Beastie Boys submitted a reply. Dkt. 210 ("Beastie Reply Br."),211
("Ganity Decl."). On March 30,2015,the Court heard argument.
The Legal Basis for Beastie Boyso Asserted Entitlement to Fees
The Beastie Boys move for attorneys' fees under both the Copyright Act,17 U.S.C.
$ 505, and the Lanham
15 U.S.C. $ 1117(a). Because these Acts set different standards
fee awards, the Court addresses the Beastie Boys' claim of entitlement to fees under each fee-
shifting provision in turn.
Attorneyso Fees Under the Copyright Act
Applicable Legal Standards
The Copyright Act provides that "the court in its discretion may allow the recovery
full costs by or against any party other than the United States" and "may also award a reasonable
attorney's fee to the prevailing party as part of the costs." l7 U.S.C. $ 505. Fee awards,
however, are not "automatic" or given "as a matter of course." Fogerty v. Fantasy,
u.s. 517,533 (1994).
Rather, courts award attorneys' fees only where doing so is "faithful to the purposes
Act." Matthew Bender & Co. v. W. Pub. Co.,240 F.3d 116,122 (2d Cir. 2001)
(quoting Fogerty,510 U.S. at 534 n.19). The "principal purpose" of the Copyright Act is "to
encourage the origination of creative works by attaching enforceable property rights to them."
Davis v. Blige,505 F.3d 90, 105 (2dCir.2007) (quoting Diamondv. Am-Law Publ'g Corp.,745
F.2d 142,147 (2d Cir. 1984)); see also Twentieth Century Music Corp. v. Aiken, 422U.5.
("The immediate effect of our copyright law is to secure a fair return for an author's
creative labor. But the ultimate aim is, by this incentive, to stimulate artistic creativity for the
general public good.").
Under the Copyright Act, "'[t]here is no precise rule or formula' that district courts must
apply in determining whether to award attorney's fees." Zalewski v. Cicero Builder Dev., Inc.,
754F.3d95, 108 (2dCir.2014) (quoting Fogerty,5l0U.S. ar534) (alterationinoriginal).
Supreme Court has suggested a list of non-exclusive factors that courts may
consider," which are commonly referred to as the "Fogerty factors"; these include
"frivolousness, motivation, objective unreasonableness (both in the factual and in the legal
components of the case) and the need in particular circumstances to advance considerations
compensation and deterrence." Id. (quoting Fogerty, 510 U.S. at 534). "Of these factors,
'objective reasonableness . . . should be given substantial weight in determining whether an
award of attorneys' fees is warranted."' Id. (quoting Matthew Bender,240 F.3d at 122).
"In an appropriate case," however,'othe presence of other factors might justiff an award
of fees despite a finding that the non-prevailing party's position was objectively reasonable."
Matthew Bender,240 F.3d at I22. Each factor is relevant only insofar as it guides the Court in
resolving, in its discretion, the ultimate inquiry: whether awarding attorneys' fees is consistent
with the purposes of the Copyright Act. See id. (citing Fogerty,510 U.S. at 534 n.19).
Considering the Beastie Boys' fee application in light of the principles governing fee
awards under the Copyright Act, the Court's judgment is that, on balance, an award of fees is
consistent with, and would further, the purposes of the
unitary: Although there are arguments favoring
Act. But the analysis is textured, not
a fee award that
ultimately carry the day, there
are also countervailing considerations. These have contributed to the Court's decision to impose
a fee award below that sought by the Beastie
III, infra. The Court's
assessment of the most relevant factors follows.
Objectíve reasonablensss: Monster's conduct and legal positions during and after
and, with one significant exception discussed below, before
As the Court explained in its post-trial opinion, the issues tried with respect to the Copyright Act
claims were difficult and close.
One issue attrial, which affected whether the maximum available statutory damages for
each act of infringement was $30,000 or $150,000, was whether Monster's conduct had been
See 17 U.S.C. $$
50a(c)(1)-(2). As the Court concluded, "the issue of willfulness was
vigorously disputed attrial and certainly could have been resolved for either side." Beastie Boys,
2014WL 6845860, at *13. To be sure, o'there was sufficient circumstantial evidence of reckless
disregard to support the jury's finding" of willfulness, id., but a jury could also have reached the
opposite conclusion. Monster was not unreasonable in contesting willfulness during, and after,
was Monster unreasonable in its arguments to the
to specific factors bearing on
the amount of the statutory damages award, which included'othe deterrent effect of such an
award on Monster and third parties,"
revenue lost by the plaintiffs, if any, as a result of the
conduct and attitude of the parties." Tr. 1613 (jury charge); see alsoTr.
Monster's litigation as to actual copyright damages was also objectively reasonable. The
calculation of actual damages turned on the jury's subjective assessment of the infringing video.
In litigating the cost of an assumed license authorizing Monster to use the Beastie Boys' songs
the soundtrack for Monster's promotional video, counsel for each side vigorously advocated as
to the most apt comparator for that unusual video. This inquiry was complicated by the fact that
the Beastie Boys had never licensed their music for traditional product advertisements, Tr. 118-
20,275,864-65, and that the Ruckus video was, by its nature, far from a standard product
promotion. "[T]he quirþ, indeed new-age, nature of the advertising medium in this case, and
the Beastie Boys' extensive licensing history . . . provided fodder for a wide range of potential
valuations." Beastie Boys,20l4 WL 6845860, at *35. The Beastie Boys compared the video to
movie trailer, for which the group had received up to $800,000 for a license to use a single
song,s¿¿ PX2I9, at 9, whereas Monster compared the video, inter alia, to Internet
produced by a watch company, for which the Beastie Boys had received just a few hundred
dollars per copyright, see PX220,
at2. The jury's verdict
indicates that it ultimately accepted a
valuation more in line with those urged by the Beastie Boys. But Monster's decision to
vigorously litigate actual damages, including presenting expert testimony on this point, was
reasonable. Presiding over trial, this Court could not reliably have forecasted, with any level
confidence, the jury's actual damages award.
Finally, and relatedly, the Court is not persuaded that the settlement positions Monster
took were unreasonable. Following trial, the Court received briefing as to the settlement process,
with each party contending that the settlement history supported its position on the Beastie Boys'
fee application. To be sure, there is some factual dispute as to Monster's final
offer: The Beastie
Boys' counsel represented that the highest offer had been $250,000, see Anderson Decl. fl 28,
whereas Monster's counsel attested that Monster's final offer had been $650,000, see Kahn Decl.
fl 17. Regardless, viewed in real time and not in hindsight, either figure was defensible. Under
Monster's theory of the case, the Beastie Boys' maximum possible recovery on the Copyright
Act claims was $300,000: Without a finding of willfulness, the statutory damages would have
been capped at $30,000 per infringement. See
l7 U.S.C. $$ 50a(c)(1)-(2). And actual damages
would have been significantly lower than that had the jury accepted Monster's view, and that
its expert, as to the most appropriate analogue for the Ruckus video.2
To be sure, the Beastie Boys' final demand of $1.65 million appears prescient in light
million verdict. But, particularly given the idiosyncrasies of this controversy,
In calculating damages for purposes of settlement, Monster could have reasonably believed that
a Lanham Act violation, even if found, would not result in an award of money damages because
only violations that involve actual consumer confusion or intentional deception permit such an
award. See George BaschCo. v. Blue Coral, 1nc.,968F.2d1532,1537 (2dCir.1992). The jury
found intentional deception, but, as the Court has noted, this finding, like the jury's finding of
willfulness on the Copyright Act claims, was not a foregone conclusion. The evidence was
circumstantial and could be read to support either side's chosen inference. See Beastie Boys,
2014 WL 6845860, at *3 l-32.
Monster was not unreasonable in offering either $250,000 or $650,000, or, at an August 2013
settlement conference, in refusing to negotiate until the Beastie Boys demanded'oless than $1
Decl. fl 27.
However, one significant aspect of Monster's approach to litigating the copyright claims
was objectively unreasonable: It refused, until the brink of trial, to concede that it had infringed
the Beastie Boys' copyrights, and
it attempted to shift legal responsibility for any infringement to
Z-Trip. Putting aside the question of whether Monster had acted willfully in trenching on the
Beastie Boys' copyrights, Monster's liability for infringing the 10 copyrights at issue was open
and shut. Monster had taken a host of the Beastie Boys' copyrighted musical compositions and
sound recordings and exploited them, at length, in an extended web advertisement for its
products, without any license to do so. There was no claim that Monster ever had the Beastie
Boys' permission to use these songs, and Monster's anemic pretrial claim (echoing its employee,
Phillips) to have received a legally valid license from Z-Trip to use the group's compositions and
songs in the promotional video was blatantly meritless. The infringement here thus was flagrant.
Yet Monster, strikingly, did not concede liability on the Copyright Act claims until the final
pretrial conference, days before trial. See Dkt. 141, at 48; Anderson Decl., Ex. E; Garrity Decl.
This refusal positioned the parties needlessly far apart on a foundational issue and, it can
be assumed, made pretrial settlement less
as a result of Monster's adamancy that
it was not liable for infringement, the Beastie Boys were obliged to prepare for trial on this point,
so as to prove "ownership of a valid copyright and copying of the protectable elements of the
copyrighted work." Scholz Design, Inc. v. Sard Custom Homes, LLC,69l F.3d 182, 186 (2d Cir.
2012) (listing elements of copyright infringement). This entailed, inter alia, procuring
certificates of copyright registration to prove that the Beastie Boys owned the rights to the songs
in question, and hiring a musicologist to establish that the video did, in fact, contain the Beastie
Boys' music. These basic facts were never subject to reasonable dispute.
Relatedly, Monster needlessly prolonged this litigation and increased the Beastie Boys'
attorneys' fees through its pretrial attempt, via
third-party complaint, to shift blame to Z-Trip.
After denying any responsibility for the copyright infringement in its Answer, Dkt. 5, Monster
brought claims of breach of contract and fraud against Z-Trip, Dkt.
9. Both Z-Trip
Beastie Boys, whose interests were affected by Monster's claims against the DJ, spent time and
money litigating these meritless claims.
As the Court held in granting summary judgment for Z-Trip, Monster's arguments were
patently unreasonable: On Monster's contract claim, no communications between Phillips and
Z-Trip "could be plausibly read to involve an offer," Z-Trip,983 F. Supp. 2d at348, and there
"no evidence on which a reasonable juror could find acceptance of contractual terms," id. at
350. And, it would "flout common sense" to conclude thatZ-Ttip "granted Monster the rights
Id. at350-51. As to Monster's fraud claim,
o'Monster ha[d] not adduced any
evidence tending to show thatZ-Trip acted with fraudulent intent" or had any motive to defraud
Monster. Id. at351 (emphasis in original). Nor had Monster offered "any credible argument
why it was reasonable to rely on Z-Tríp's colloquialisms as a basis to conclude it had obtained
from him the necessary licenses." Id. at 353. The Court therefore described Monster's fraud
claim against Z-Trip as "risible." Id. at35I.
Because, as to this aspect of the litigation, Monster's conduct was uffeasonable and was
"directly responsible" for certain fees "plaintiff[s] had to expend," the factor of objective
uffeasonableness supports some fee-shifting. Harrell v. Van der Plas,No. 08 Civ.8252 (GEL),
2009 WL 3756327, at *4 (S.D.N.Y. Nov. 9,2009).
lltíllfulness of underlyíng conducl: The jury found that Monster's infringement was
and the Court upheld that finding as
fairly grounded in the record evidence.
Boys,2014WL 6845860, at *13-16. Despite being alarge, sophisticated corporation with
$120 million annual marketing budget and with safeguards in place to protect its own intellectual
property rights, Tr. 1050, "Monster had no comprehensive music licensing policy; it tasked
unqualified and untrained employees with the job of creating and disseminating promotional
recap videos that presented a goodly risk of trenching on others' rights; and it protected its own
intellectual property interests with far more vigor and solicitude than it did others'," Beostie
Boys,20l4 WL 6845860, at *33. As a result of these "striking failure[s]," the Court held, "it
was likely only a matter of time before infringement occurred." Id.
at*I6 8. n.13. Based on
these factors, among others, the Court found that, although the issue of copyright willfulness
"could have been resolved for either side," there was sufficient evidence of reckless disregard to
support the jury's finding of willfulness. S¿e id. at*14.
As courts in this Circuit have repeatedly held, a defendant's willful infringement supports
an award of attorneys' fees to a prevailing
See, e.g., Kepner-Tregoe, Inc.
F.3d 283, 289 (2dCir.1999); Hounddog Prods., L.L.C. v. Empire Film Grp., lnc.,826 F. Supp.
2d619,634 (S.D.N.Y.20Il);Nature's Enters., Inc. v. Pearson,No.08 Civ.8549 (JGK),2010
WL 447377 , at *9 (S.D.N.Y. Feb. 9, 2010); Manno v. Tenn. Prod. Ctr., Inc., 657 F. Supp. 2d
425,435 (S.D.N.Y. 2009). Courts have awarded fees based on willfulness even where the
infringement was reckless rather than knowing. In Design Resources, Inc. v. John
Decorative Fabrics, for example, the defendant obtained samples of plaintifls fabrics and
commissioned a studio to create similar patterns. No. 83 Civ . 7 606 (CBM), 1 985 WL 2445 , at
*2 (S.D.N.Y. Sept. 5, 1985). "Although the record [did] not establish whether defendant knew
of plaintiff s copyrights," a fee award was appropriate because "there [was] sufficient evidence
to find that defendant acted in reckless disregard for plaintiffls rights in the copyrighted
Similarly, inAdidas Sportschuhfabriken Adi Dassler Stiftung & Co., K.G. v. New
Generation, the defendants had sold merchandise decorated with logos, insignias, and cartoon
characters owned by the
plaintifß. No. 88 Civ. 5519 (PKL),
180679, at *1 (S.D.N.Y.
29,1990). The record contained no direct evidence of the defendants' intent, and they
"profess[ed] little knowledge of the significance of the pirated logos and symbols." Id. at*2.
The court nevertheless awarded attorneys' fees because defendants were "under a duty to inquire
into whether their business sources for the designs were fully authorized to sell such products,"
had "made significant inquiry into the legality of their activities," "they would have
discovered that their activities were unauthorized and illegal."
serious internal controls, and Monster's failure to verify whether
Here, too, the lack of any
it had the right to use the
Beastie Boys' sound recordings and musical compositions in its promotional video, justify an
award of fees.
Finally, in Basic Boolcs, Inc. v. Kinko's Graphics Corp., several publishing companies
sued a copy shop for making unauthorized reproductions of book excerpts and selling them to
students as "course packets." 758 F. Srpp. 1522,1526 (S.D.N.Y. 1991). While acknowledging
that the fair use issues in the case bore "some degree of novelty," the court awarded attorneys'
fees to the prevailing
plaintiffs because the defendant had not engaged in a "critical analysis" or
"wrestled with the [fair use] determinations" before engaging in the infringing activities. Id. at
1547. Because the difficult legal issues emerged only during the ensuing litigation, the court
held, awarding attorneys' fees was reasonable and appropriate. See
The Beastie Boys have a
far stronger case for an award of attorneys' fees than the plaintiffs in Basic Books because the
contested issues here as to the Copyright Act involve the appropriate measure of damages; the
fact of infringement was indisputable. Had Monster engaged in a "critical analysis"-or even a
cursory inquiry-before posting the Ruckus video online, it could have prevented the
infringement and obviated the need for this litigation.
Compensatíon and deterrence: A final relevant pair of factors, both of which strongly
support some fee award so as to vindicate the purposes of the Copyright Act, are compensation
and deterrence. See Zalewski,754F.3d at 108; Walt Disney Co. v.,Besf, No. 88
(SV/K), 1990 WL 144209, at *4 (S.D.N.Y. Sept. 26,1990) (awarding fees "serves the purposes
of the Copyright Act to compensate the plaintiff and deter future infringements").
As to compensation, a fee award helps ensure that an injured copyright holder is, at the
end of the day, compensated for his
injury. Otherwise, there is some risk that the cost of
litigation will erode, if not eliminate altogether, the plaintiff
recovery. In this case, the Beastie
Boys paid their counsel more in fees (approximately $2.4 million) than was awarded by the jury
in total ($1.7 million) or on the Copyright Act claims alone ($1.2 million).3 To be sure, in
The plaintiffs in this case will receive some, but not all, of the damages awarded because the
copyrights to the five musical compositions and sound recordings used in the video are co-owned
by other entities. S¿¿ Dkt. 202, reported at Beastie Boys v. Monster Energy Co., No. 12 Civ.
6065 (PAE),2015 WL736078 (S.D.N.Y. Feb. 20,2015). In practice, however, the co-owners,
who have brought a follow-on lawsuit against Monster, will be able to leverage the verdict in this
case into judgments in their favor via offensive collateral estoppel. See Capitol Records, LLC v.
Monster Energt Co., 14 Civ.7718. And the Beastie Boys' counsel represented to the Court that
they have communicated and coordinated with-and indeed, shortly before trial, belatedly
sought leave to litigate the claims of-the other rights holders. See Dkt.72-74. For the purpose
of resolving this motion, in particular for assessing the compensation objective of the Copyright
assessing whether the Copyright
Act's compensation goal is implicated here, the Court must
determine the minimum amount reasonably necessary to effectively litigate these claims, not the
amount actually spent in this case; the Court undertakes that analysis in SectionIlI, infra. But it
suffices for now to say that shifting some of the Beastie Boys' substantial fees to Monster helps
ensure the Beastie Boys a net positive recovery as to the copyright claims.
Further, as to the goal of deterrence, a fee award to plaintiffs here may encourage
copyright holders whose rights are infringed to vindicate meritorious claims. Contested
copyright cases can be expensive to litigate, as this case illustrates. Without the prospect of a fee
award, plaintiffs facing mounting legal fees "'might be forced into a nuisance settlement or
detened altogether from enforcing ftheir] rights."' Crown Awards, Inc. v. Disc. Trophy & Co.,
564F. Supp.2d290,296 (S.D.N.Y.2008), aff'd,326 F. App'x 575 (2d Cir.2009) (summary
order) (quoting Assessment Techs. of
LLC v. lí/IREdata, Inc.,36l F.3d 434,437 (7thCir.
2004)). Awarding such fees incents rather than deters potential plaintiffs: It serves to "satisfy
the Copyright Act's purposes" because it
will "encourage plaintiffs to litigate meritorious claims
of copyright infringement" and, in tum, "encourage the origination of creative works by
attaching enforceable rights to them." Id. at295 (citations omitted).
For these reasons, the Court finds that awarding attorneys' fees to the Beastie Boys will,
on balance, advance the purposes of the Copyright Act. In particular, a fee award is supported
by the interests of compensation and deterrence; by the interest in placing some of the burden
paying legal fees on the willful infringer; and, to the extent that Monster unjustifiably contested
its liability and wrongly attempted to shift legal responsibility onto Z-Trip, by the interest in
Act, it is therefore fair to treat the Beastie Boys as if they stood to receive the entire award on the
making aparty bear the expenses generated by its unreasonable litigation tactics. However, the
proper amount of such an award presents a complex question. Various factors-including the
manner in which the Beastie Boys' case was staffed, the fact that some portion of the Beastie
Boys' legal fees were occasioned by work on the Lanham Act claim, and the fact that the issues
titigated attrial included difficult and close questions and that Monster's trial defenses were not
objectively unreasonable-counsel for an award of only a subset of the fees that the Beastie
Boys incurred. The Court addresses these factors and the proper amount of the fee award in
Section III below.
Attorneys' Fees Under the Lanham Act
Applicable Legal Standards
Under the Lanham Act, "[t]he court in exceptional cases may award reasonable attorney
fees to the
prevailingparty." l5 U.S.C. $ 1l l7(a). "The decision whether or not to award such
fees  rests within the broad discretion of the district judge." Miuoban Prods. Co. v. API
Indus.,lnc.,No. 14Civ.4l (KPF),2014WL1856471,at*23 (S.D.N.Y.May8,2014) (quoting
George Basch Co.,968
.2d at 1543) (alteration in original).
The Second Circuit has defined "exceptional cases" as ones involving fraud, bad faith, or
Patsy's Brand, Inc. v. I.O.B. Reølty, lnc.,317 F.3d 209,22I (2dCir.2003)
(citing Bambu Soles, Inc. v. OzakTrøding Inc.,58 F.3d 849,854 (2dCir.1995);Twín Peak
Prods. v. Publ'ns Int'1, Ltd.,996F.2d1366,1383 (2d Cir. 1993)); see also, e.g., Keystone Global
LLC v. Auto Essentiøls, Inc., No. 12 Civ.9077 (DLC), 2015 WL 224359, at *7 (S.D.N.Y. Jan.
16,2015); Leviton Mfg. Co. v. Fastmac Performance Upgrades, Inc., No. 13 Civ.1629 (LGS)
(SN), 2014WL2653116, at *8 (S.D.N.Y. Feb. 28, 2014) (collecting cases). However, a finding
of willfulness or bad faith does not automatically entitle the prevailing party to attorneys' fees.
Such a finding may be regarded aso'aprerequisite to finding a case sufficiently exceptional to
warrant an award of fees under section ILIT(a)," but it does îotooautomatically require an
award of fees under that section
Mister Softee of Brooklyn, Inc. v. Boula Vending Inc., 484
App'x 623, 624 (2d Cir. 2012) (summary order) (citations omitted). Rather, the court should
considerations such as the closeness of the case, the tactics of counsel, the conduct of the
parties, and any other factors that may contribute to a fair allocation of the burdens of litigation
winner and loser." Fresh Del Monte Produce Inc. v. Del Monte Foods Co.,933
Supp. 2d655,665 (S.D.N.Y.2013) (quoting S.C. Johnson & Son, Inc. v. Carter-Wallace, Inc.,
781F.2d 198,201(Fed. Cir. 1986)).
In the context of the Patent Act, which, like the Lanham Act, provides that courts "may"
award attorneys' fees in "exceptional cases," the Supreme Court recently provided guidance as to
ooexceptional." Octane Fitness, LLC v. ICON Health & Fitness, Inc.,
the meaning of the term
134 S. Ct. 1749,1756 (2014) (discussing 35 U.S.C. $
285). The Court held that:
[A]n "exceptional" case is simply one that stands out from others with respect to
the substantive strength of a party's litigating position . . or the unreasonable
manner in which the case was litigated. District courts may determine whether a
case is "exceptional" in the case-by-case exercise oftheir discretion, considering
the totality of the circumstances.
The Court further instructed that courts resolving motions for fees in patent cases should
consider the Fogerty factors used in Copyright Act cases, including frivolousness, motivation,
objective unreasonableness, compensation, and deterrence. Id. at 1756 &, n.6. Accordingly,
courts should consider whether a given case'ostands out from others" based on those factors, or
based on a finding of willfulness or bad faith.
jury here found that Monster's conduct was willful, intentionally deceptive, and in
bad faith. Ses Dkt. I47, at
2-4. Those findings, however, do not "require
an award of fees."
Mister Softee,484 F. App'x at 624; see slso Gidatex, S.r.L. v. Campaniello Imports, Ltd.,82F.
fees, even with the
jury's finding of
faith."). After reviewing
cases from this Circuit that
have resolved motions for attorneys' fees under $ 1117(a) and measuring the circumstances here
in light of that authority, the Court's considered judgment is that the Lanham Act claims in this
case are not
sufficiently ooexceptional" to merit an award of fees.
Courts in this District typically award Lanham Act fees based on extreme misconduct
during litigation. "[C]ourts frequently look to whether the claims raised by either side were
interposed for an 'improper purpose,"' Microban,2014WL 1856471, at*23 (quoting Multivideo
Labs, Inc. v. Intel Corp.,No. 99 Civ. 3908 (DLC),2000 V/L 502866, at *2 (S.D.N.Y. Apr. 27,
2000)), or whether the losing party engaged in "deceptive litigation tactics," C:Holdings B.V.
Asiarim Corp.,992F. Supp. 2d223,251 (S.D.N.Y.2013); see also Sprint Commc'ns Co. L.P.
Chong,No. 13 Civ. 3846 (RA), 2014WL 6611484, at *5 (S.D.N.Y. Nov. 21,2014)
("[Defendant] not only frustrated the litigation process by failing to participate, he obstructed the
plaintiffs and caused unnecessary delay by using an alias that was only uncovered through
[plaintiffs' ] investigations late in this litigation.").
Courts have also granted Lanham Act fees to prevailing plaintiffs where the defendant
defaulted. See, e.g., Lane Crawford LLC v. Kelex Trading (CA) Inc.,No. 12 Civ. 9190 (GBD)
(AJP), 2014 WL 1338065, at *2 (S.D.N.Y. Apr. 3,2014); Sub-Zero, Inc. v. Sub Zero NY
Refrigeration & Applíances Servs.,1nc., No. 13 Civ. 2548 (KMW) (JLC), 2014 WL 1303434, at
*7 (S.D.N.Y. Apr. l, 2014).
On occasion, courts have also awarded Lanham Act fees based on egregious underlying
facts, for instance, where a defendant continued its infringing conduct "in the face of a
preliminary injunction." Playboy Enters., Inc. v. Chucklebeny Pub., ünc.,687 F.2d563,571 (2d
None of those circumstances are present here. Unlike the Copyright Act claims, as to
which Monster's pretrial denial of liability was unreasonable, the Court does not perceive any
unreasonableness to Monster's arguments or litigation positions as to the Lanham Act claim
false endorsement. Monster made responsible arguments opposing that claim, and the jury's
verdict for the Beastie Boys, in the Court's view, was no foregone conclusion. This case is thus
afar cry from one in which the losing party's litigation positions as to
Act claim were
so "devoid of legal merit that one could only conclude that they were advanced with an improper
motive," Microban,2014 WL 1856471, at*23, or constituted "outrageous" conduct evincing a
"complete lack of respect for the judicial process," C:Holdings, 992 F . Supp. 2d at 251 . The
case was certainly "exceptional" in the sense that the facts were idiosyncratic, but not in the
sense relevant here, in that the egregiousness required to
justifr a fee award under the statute
This case thus resembles, more than the cases in which attorneys' fees were awarded, two
Lanham Act cases in which courts in this District declined to award fees. In Gidatex, S.r.L.
Campaniello Imports, Ltd., the jttqy found bad faith, but the court nevertheless declined to award
fees because the defendant's litigation decisions were 'Justifiable," and the plaintiffs had not
prevailed on every issue. 82 F. Supp.2d 136,140,14849 (S.D.N.Y. 2000). Similarly, in Simon
& Schuster, Inc. v. Dove Audio, Inc., the court denied Lanham Act
fees to a prevailing
because, although the defendant's infringement was ultimately found
willful, the "litigation
presented a number of close and contested issues; the outcome was by no means a foregone
conclusion." 970 F. Supp. 279,302 (S.D.N.Y. t997). The Court similarly concludes that,
notwithstanding the jury's findings of intentional deception and bad faith, a fee award under the
Lanham Act is not merited here.
Determination of the Reasonable Amount of the Fee Award
The Beastie Boys were represented throughout this case by Sheppard Mullin Richter &
Hampton LLP ("sheppard Mullin") and paid Sheppard Mullin all of the fees the firm billed
them. The Beastie Boys seek an award of $2,385,175.50. This figure reflects two reductions,
totaling $101,504.50, from the fees the Beastie Boys paid. First, the Beastie Boys do not seek to
recover fees for attorneys and staff who spent less than 10 hours on the case; this eliminated 70.4
hours of work, corresponding to 520,977 in fees. Second, to avoid a fee award for duplicative
efforts, the Beastie Boys do not seek to recover fees for work performed after July 2013 by
Theodore Max, Esq., Sheppard Mullin's initial lead partner on the case, because from that point
forward, Kevin Puvalowski, Esq., was lead partner. This eliminated I19.3 hours of work,
corresponding to $80,527.50 in fees. Se¿ Anderson Decl., Ex. U.
Legal Standards Governing Reasonableness of
In determining the amount of a fee award, district courts are to calculate the
"presumptively reasonable fee." Simmons v. N.Y. City Transit Auth.,575 F.3d I70, 172 (2d Cir.
2009). The starting point for determining the presumptive reasonable fee is the "lodestar"
amount, which is "the product of a reasonable hourly rate and the reasonable number of hours
required by the case." Gaia House Mezz LLC v. State Street Bank & Trust Co., No. 1 1 Civ. 3186
(TPG), 2014WL3955Il8,at *1 (S.D.N.Y. Aug. 13,2014) (quoting Milleav. Mefto-North R.R.
Co.,658 F.3d 154, 166 (2dCir.2011)). "The presumptively reasonable fee boils downto'what
paying client would be willing to pay,' given that such aparty wishes 'to spend the
minimum necessary to litigate the case effectively."' Simmons,575 F.3d at 174 (quotingArbor
Hill Concerned Citizens Neighborhood Ass'n v. County of Albany,493 F.3d 110, I 12,lI8 (2d
Cir. 2007), amended on other grounds by 522 F.3d 1 82 (2d Cir . 2008)). In resolving what a
reasonable client would pay, the Court must consider the "Johnson factors," namely:
(1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the
level of skill required to perform the legal service properly; (4) the preclusion of
employment by the attorney due to acceptance of the case; (5) the attorney's
customary hourly rate; (6) whether the fee is fixed or contingent; (7) the time
limitations imposed by the client or the circumstances; (8) the amount involved in
the case and the results obtained; (9) the experience, reputation, and ability of the
attorneys; (10) the "undesirability" of the case; (11) the nature and length of the
professional relationship with the client; and (I2) awards in similar cases.
Arbor Hill,493 F.3d at 186 n.3 (citing Johnson v. Ga. Highway Exp., Lnc.,488 F.2d 714,716
(5th Cir. 1974), abrogated on other grounds by Blanchard v. Bergeron, 489 U.S. 87 (1989).
"As the fee applicant, plaintiffs 'bear the burden of documenting the hours reasonably spent by
counsel, and the reasonableness of the hourly rates claimed."' Allende v. Unitech Design, Inc.,
783 F. Supp. 2d509,512 (S.D.N.Y.2011) (quoting General Elec. Co. v. Compagnie Eurølair,
5.A.,96 Civ. 0884 (SAS), 1997 WL397627 at *4 (S.D.N.Y. July 3,1997)).
Additionally, "[a]ttorney's fees must be reasonable in terms of the circumstances of the
particularcase." JohnWiley&Sons, Inc.v. Kirtsaeng,No. 14-344,2015 WL3396832,at*1(2d
Cir. May 27,2015) (quoting Aldermanv. PanAm\ItorldAirways,169F.3d 99,102(2dCir.
1999)). "'[T]here is no precise rule or formula' for determining a proper attorney's fees award";
rather, the district court should exercise its "equitable discretion" in light of all relevant factors.
GMA Accessories, Inc. v. Olivia Miller,
App'x 301, 304 (2dCir.2005) (summary
order) (quoting Fogerty,s10 U.S. af 534); see also Clarkv. Hudson Bay Music, Inc.,l04F.3d
351, 351 (2dCir.1996) (unpublished opinion); N.A.S. Imp., Corp. v. Chenson Enters., [nc.,968
F.2d 250, 253-54 (2d Cir. 1992).
The Proper Amount of the Fee Award
The Court's analysis as to the reasonable fee award on the Copyright Act claims proceeds
in three steps.
First, the Court considers challenges Monster raises to discrete aspects of the fees billed
of legal work Monster claims were unnecessary to vindicate the
Beastie Boys' claims and to certain billing practices. Finding merit to some of these arguments,
the Court reduces the fees eligible for shifting. Second, the Court considers the extent to which a
further reduction is merited to reflect the fact that some of plaintiffs' counsel's work was
directed at the Lanham Act claim, as to which the Court has declined to award fees. Third, the
Court considers what portion of the resulting fees must be shifted to Monster to vindicate the
interests served by the Copyright Act.
Before examining potential reductions, however, it is important to keep in mind the big
picture. This case was justifiably expensive to litigate. It implicated complex questions of law,
challenging questions of fact, and difficult and hotly contested damages determinations. Further,
the high profile of the parties and the attention given to this lawsuit no doubt impelled counsel to
leave no stone unturned. Indeed, this case was litigated aggressively by estimable lawyers on
both sides. The Court's analysis as to the proper fee award, and the reductions that follow, do
not bespeak any criticism of counsel for either side, whose impressive lawyering the Court has
Monsteros Arguments as to Specific Projects and Billing Practices
\ilork on Unnecessary Projects
Monster argues that several areas of legal work were unnecessary to vindicate the Beastie
First, Monster notes, the Beastie Boys "conducted extensive discovery" into two sets of
videos that were never received in evidence. The first, the "Monster Army" videos, were posted
by athletes whom Monster had sponsored to a website that Monster created for the purpose
promoting these athletes and Monster itself. Six such videos allegedly incorporate, without
authorization, Beastie Boys music. The other video was created in connection with a sporting
event in Switzerland called'oWheels Fest," which Monster sponsored and promoted. The video
allegedly used a Beastie Boys song, "Sabotage," as its soundtrack, without authoÅzation. The
Court, however, granted Monster's motion in limine to exclude evidence as to these subjects
pursuant to Federal Rule of Evidence 403, on the grounds that Monster had not created the
videos, and the confusion, delay, and unfair prejudice from litigating at trial the circumstances
under which these videos had been created would outweigh any limited probative value. S¿e
Dkt. 90. Although it was surely proper for the Beastie Boys to seek discovery into the Monster
Army and V/heels Fest videos, the Court agrees with Monster that the legal fees the Beastie Boys
incurred doing so are not properly shifted to it, given the tenuous relevance of, and the exclusion
of, this evidence from trial.a
A table provided by the Beastie Boys showsthat22 billing entries, which total70.7 hours of
legal work, explicitly reference discovery efforts with respect to the V/heels Fest video. Ganity
Decl., Ex. D. These entries also describe other work performed by counsel, such that not all of
the70.7 hours can be assumed to have related to Wheels Fest. At the same time, the Beastie
Boys' legal work opposing Monster's motion in limine to exclude the Monster Army and Wheels
Fest videos, Dkt. 66, is not reflected in this table. Nor is the time expended investigating the
Monster Army videos, which are rarely mentioned by name in the billing records.
Second, Monster argues that
it should not be compelled to pay the Beastie Boys' fees
incurred with respect to two aspects of legal work relating to expert witnesses. First, Monster
brought a Daubert challenge to the report of Beastie Boys' damages expert Lisa Thomas, and
although the Court held the bulk of Thomas's expert report to be reliable, it granted Monster's
motion insofar as Thomas, in valuing an assumed license to use the Beastie Boys' copyrights,
wrongly assumed a lifetime, as opposed to five-week-long, license. See Dl
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