Part I of this series covered the elements of common law and statutory claims for misappropriation while Part II examined commonly asserted defenses to those claims. In Part II, we explained that, in the context of expressive works, a person’s right to control the use or portrayal of his likeness diminishes as the person’s celebrity or public figure status increases. Certain defenses, including newsworthiness, parody, or transformative use may shield creators of expressive works from liability, thus foreclosing the payment of damages for an alleged unauthorized use, even if the plaintiff could prove that some injury did occur.
In the commercial context, however, the opposite is true. Because a key component of a plaintiff’s damages is the fair market value for his or her services, a plaintiff’s recovery likely will increase with his or her celebrity status (and corresponding price tag for commercial appearances). Thus, a key consideration for both plaintiffs and defendants litigating claims for misappropriation should be the identity of the plaintiff and his or her ability to show harm stemming from the unauthorized use of his or her name or likeness.
Available Remedies for Misappropriation
- Common Law Claim – compensatory damages, punitive damages, nominal damages and emotional distress damages.
- Statutory Claim – the actual damages suffered by him or her as a result of the unauthorized use, and any profits from the unauthorized use that are attributable to the use and are not taken into account in computing the actual damages, punitive damages and attorneys’ fees and costs. Civ. Code §§ 3344(a); 3344.1(a). The statutory minimum amount of damages under section 3344 is $750.
- Fair Market Value Of Services: As the Southern District of New York noted, “there is a fairly active market for exploitation of the faces, names and reputations of celebrities, and such market – like any other – must have its recognized rules and experts.” Grant v. Esquire, Inc., 367 F. Supp. 876, 881 (S.D.N.Y. 1973). To establish the fair market value of their services, celebrities may point to previous endorsement deals, fees paid for commercial appearances, and expert opinion to establish the “going rates” for the exploitation of their names and likenesses in connection with a commercial purpose.
- Goodwill, Mental Distress and Future Publicity Value: Each of these types of damages was awarded in Tom Waits v. Frito-Lay, Inc., which involved a claim for voice misappropriation and false endorsement under the Lanham Act arising out of the imitation of singer, songwriter and actor Tom Waits’ voice in a Doritos commercial. Notably, Waits made it known publicly that he did not endorse products or appear in commercials, believing that doing so detracts from a musician’s artistic integrity. Following a trial, the jury awarded Waits the following compensatory damages for voice misappropriation: $100,000 for the fair market value of his services; $200,000 for injury to his peace, happiness and feelings; and $75,000 for injury to his goodwill, professional standing and future publicity value. Waits v. Frito-Lay, Inc., 978 F.2d 1093, 1102-03 (9th Cir. 1992), abrogated on other grounds by Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377 (2014). Waits was also awarded a total of $2 million in punitive damages, which, along with the compensatory damages award, was upheld on appeal. Breaking down the award further:
- Goodwill: The court explained that “[t]he central issue is not whether these damages were available, but whether the evidence was sufficient to establish injury to Waits’ reputation.” Id. at 1104. The appellate court concluded that the jury could have inferred both that the commercial created a public impression that Waits was a hypocrite for endorsing Doritos and resulting damage to his artistic reputation, in light of Waits’ testimony that “part of [his] character and personality and image that [he has] cultivated is that [he does] not endorse products.” Id.
- Mental Distress: Waits’ mental distress damages also stemmed from his public stance in opposition to commercials. Waits testified that, following the airing of the Doritos commercial, he suffered from shock, anger, and embarrassment. Among other things, the commercial humiliated Waits by making him appear to be “an apparent hypocrite.”
- Future Publicity Value: The court in Grant v. Esquire recognized that, with respect to celebrity commercial appearances, there may be a recognized first-time value which diminishes with future use. Grant, 367 F. Supp. at 881. Similarly, in Waits, an expert testified that if Waits ever wanted to do a commercial in the future, the fee he could command would be lowered because of the Doritos commercial. Waits, 978 F. 2d at 1104.
- Defendants’ Gross Profits Attributable To The Use. Section 3344 provides that, “[i]n establishing such profits, the injured party or parties are required to present proof only of the gross revenue attributable to such use, and the person who violated this section is required to prove his or her deductible expenses.” Parties typically will retain marketing experts to opine on the “gross revenue attributable” – or value – of the exploitation of the person’s likeness. InChristoff v. Nestlé USA, Inc., a Los Angeles jury determined that former model Russell Christoff should have been paid $330,000 for the use of his likeness on Taster’s Choice coffee containers over a period of approximately six years, and an additional $15.3 million based on his expert’s testimony that the icon on the container’s label, which consisted of Christoff’s photograph, was responsible for five to fifteen percent of Nestlé’s profits from selling Taster’s Choice instant coffee.
The award of profits was reversed on appeal. At trial, Christoff’s expert, a professor of marketing, testified, among other things, that the “icon” of the taster was a key “visual cue that becomes a . . . way to further identify the product,” “a visualization of a taster making a choice” and a “validation that a taster would choose this particular instant coffee.”
On cross-examination, however, the expert also acknowledged that it was not the plaintiff himself, but rather the image of the “taster,” which was the icon that was responsible for the percentage of sales. Accordingly, the appellate court reversed the award and remanded for further proceedings, finding that there was insufficient evidence to uphold the award for disgorgement of profits absent evidence that the plaintiff’s specific characteristics (even if generic) created a value in the icon of the taster. Christoff v. Nestlé USA, Inc., 152 Cal. App. 4th 1439 (2007), aff’d in part, rev’d in part, 47 Cal. 4th 468 (2009). After further proceedings on appeal, the case settled for a confidential amount.