As reported by several media outlets in the last few weeks, the Beastie Boys are seeking nearly $2.4 million in attorneys’ fees from Monster Energy Co.—the maker of the eponymous Monster energy drinks—after Monster was found liable to the Beastie Boys for copyright infringement to the tune of $1.7 million.
While a lot of attention is being paid to the amount of money the Beastie Boys and their attorneys stand to earn from this suit, few seem to be asking how it is that Monster ended up being on the hook for millions of dollars in the first place or what other companies can learn from this case. Here are three quick takeaways.
1. Make sure all third party rights are cleared before pushing content out on social media
As brand owners accumulate greater numbers of followers on social media, they are becoming increasingly reliant on that medium to push marketing content out to the public. While that in itself is no bad thing, it is not without its risks. The ease with which a brand owner can post its content on social media, and the potential of having that content go viral, may tempt some brand owners to take short cuts and not properly clear third party rights.
That is what Monster seems to have done here, and it could end up costing the company more than $4 million. Monster’s infringing content was a short video that the company posted on YouTube to promote its annual “Ruckus in the Rockies” snowboarding competition. The video’s soundtrack featured a remix of several Beastie Boys tracks. The remix was originally created a few years earlier at the Beastie Boys’ request by a DJ named Z-Trip. While Monster arguably obtained Z-Trip’s permission to use the remix, the company never bothered to seek permission from the Beastie Boys themselves.
2. Make sure a licensing expert is on your marketing team; if not, get legal involved before new marketing content is posted online
In hindsight, it seems obvious that Monster should have cleared the Beastie Boys’ rights before posting the company’s video on YouTube. But copyright law and music licensing are notoriously difficult and technical areas of law. That is why every marketing team should make sure that a licensing expert is on staff or that in-house or outside copyright counsel is consulted before new content is posted online.
Unfortunately for Monster, the company did neither. According to court records, Monster’s infringing video was produced and posted by an employee who had completed one semester of college and worked in the forestry and ski industries before joining Monster. While there’s nothing inherently deficient in this resume, it certainly suggests that the employee had no prior legal training and was certainly no expert in copyright and licensing issues. Remarkably, Monster had no policies in place requiring this employee to obtain the legal department’s clearance before posting new videos online.
3. Don’t assume anything; independently verify that all third part rights are clear
Monster’s employee made at least two flawed assumptions that ended up getting the company into legal trouble. The first was that Monster had permission to use the Beastie Boys remix in whatever manner it wanted simply because the remix was available at the time as a free download on DJ Z-Trip’s website. This assumption fails to appreciate that a copyright is actually a bundle of rights such that artists can grant limited licenses for personal, noncommercial uses of a copyrighted work, while retaining exclusive rights over the work’s commercial exploitation.
The employee’s second flawed assumption was that Z-Trip had authority from the Beastie Boys to license the group’s original songs. This assumption again fails to appreciate the bundle of rights associated with a copyrighted work. While the Beastie Boys had granted Z-Trip a license to create derivative works of their songs, that license did not necessarily include the right to license others to create additional derivative works or to commercially exploit the songs.
These flawed assumptions help explain why the court said that Monster had “no business” entrusting such matters to that employee, even going so far as to say that it was “reckless” for Monster to do so.