IP Law Daily, TOP STORY—9th Cir.: District court’s reduction of award to Jimi Hendrix’s heir vacated, (Jan 29, 2014)

By Peter Reap, J.D., LL.M.

The federal district court in Seattle’s reduction of a jury award of over $1.7 million in damages to Experience Hendrix, LLC, formed by the sole heir of rock legend Jimi Hendrix, to $60,000 was vacated, the U.S. Court of Appeals in San Francisco has ruled (Experience Hendrix LLC v. Hendrixlicensing.com Ltd., January 29, 2014, Ebel, D.). Nevertheless, the district court’s alternative ruling—that if the appellate court reinstated the jury’s damages award, then a new trial on damages was warranted—was affirmed and the case remanded for a new trial that was limited to the issue of damages. In addition, the district court’s award of a permanent injunction against defendants Andrew Pitsicalis and his company, Hendrixlicensing.com, L.L.C. (collectively “Pitsicalis”), was vacated because it was ambiguous. The district court was ordered to clarify and reissue the injunction.

In addition, the district court’s holding that Washington’s Personality Rights Act (“WPRA”) gave post-mortem publicity rights to Jimi Hendrix’s heir was affirmed. However, the district court’s ruling that the Act was unconstitutional as applied to the circumstances of the case was reversed and vacated. Thus, the dispute was also remanded for further proceedings on Pitsicalis’ counterclaim for a declaratory judgment that the WPRA does not afford the heir of Jimi Hendrix any post-mortem publicity rights.

Background. Experience Hendrix holds a number of trademarks associated with Jimi Hendrix, including the names “Hendrix” and “Jimi Hendrix” and Jimi Hendrix’s signature, as well as logos incorporating a “headshot” of Hendrix. Experience Hendrix uses these trademarks to market, sell, and license Hendrix-related merchandise, including apparel, posters, and artwork sold to the public through Internet websites and brick-and-mortar retail stores throughout the United States.

Pitsicalis has also used Jimi Hendrix’s celebrity status commercially. Pitsicalis owns, or has licenses to use, photographs and original pieces of art depicting Hendrix, as well as visual artwork created by Hendrix himself.

In March 2009, Experience Hendrix sued Pitsicalis under two statutes. First, Experience Hendrix alleged that Pitsicalis was infringing Experience Hendrix’s trademarks in violation of the federal Lanham Act. Second, Experience Hendrix alleged that this trademark infringement also amounted to an unfair or deceptive trade practice proscribed by Washington’s Consumer Protection Act (“WCPA”).

The district court granted Experience Hendrix partial summary judgment on the federal Lanham Act claim, concluding that Pitsicalis had infringed Experience Hendrix’s trademarks. The court permanently enjoined Pitsicalis’s infringing activity. At trial, a jury found that Pitsicalis’s trademark infringement also amounted to an unfair or deceptive trade practice under the WCPA. Although the jury awarded Experience Hendrix damages under both statutes totaling $1,723,300, the district court reduced the jury’s award to $60,000.

Pitsicalis, in turn, asserted counterclaims against Experience Hendrix, seeking a judgment declaring that the WPRA does not provide Experience Hendrix with Hendrix’s post-mortem publicity rights. The district court granted Pitsicalis summary judgment on these counterclaims, concluding that, while the WPRA does afford Jimi Hendrix post-mortem publicity rights belonging to Experience Hendrix, those portions of the WPRA providing those rights are unconstitutional.

WPRA. The parties did not dispute that the amended WPRA recognizes post-mortem personality rights belonging to Jimi Hendrix, notwithstanding that: (1) he died in 1970, before Washington originally enacted the WPRA; (2) he was domiciled in New York at the time of his death; and (3) New York law does not recognize a post-mortem right of publicity that would survive Jimi Hendrix’s death and descend to his heir. The parties also do not dispute that, under the WPRA, Experience Hendrix owns Jimi Hendrix’s post-mortem personality rights.

Notwithstanding the fact that the WPRA on its face provides Experience Hendrix with Jimi Hendrix’s post-mortem personality rights, the district court granted Pitsicalis summary judgment, declaring that the provisions of the WPRA that recognize those post-mortem personality rights are unconstitutional. Under the narrow, non-speculative circumstances presented by this case, the Ninth Circuit disagreed with the district court’s ruling and accordingly reversed it.

Washington’s approach to post-mortem personality rights raised difficult questions regarding whether another state must recognize the broad personality rights that Washington provided. But the appellate court did not need to resolve that issue, it observed. Here, the limited controversy involved only Experience Hendrix’s interference with the sale in Washington of Pitsicalis-licensed, unofficial but non-infringing goods bearing Hendrix’s likeness, as well as Pitsicalis’s “reasonable apprehension” that Experience Hendrix will attempt to stop such targeted sales in Washington in the future.

The district court held that applying Washington’s WPRA here, instead of the law of New York, the state where Jimi Hendrix was domiciled at the time of his death, violated choice-of-law principles protected by the Due Process and Full Faith and Credit Clauses of the U.S. Constitution. Those Clauses require that, for a state’s substantive law to be selected and applied to a particular case in a constitutionally permissible manner, that state must have a significant contact or significant aggregation of contacts, creating state interests, such that choice of its law is neither arbitrary nor fundamentally unfair.

Washington has sufficiently significant contacts with the actual, non-speculative controversy at issue here, which involved the loss of sales in Washington of Pitsicalis-licensed goods, according to the appellate court. Therefore, because these contacts were sufficient to give Washington an interest in applying its own law to this controversy, it was not arbitrary or unfair to apply the WPRA in this case.

The district court also held that applying the WPRA to this case would violate the dormant Commerce Clause, which limited the power of states to enact laws imposing substantial burdens on interstate commerce. However, the limited, non-speculative controversy at issue here did not affect transactions occurring wholly outside Washington. Nor did the record suggest that the application of the WPRA to the limited, non-speculative controversy at issue would otherwise impermissibly burden interstate commerce.

For the foregoing reasons, the WPRA can be applied constitutionally to the narrow controversy at issue in this case, the court ruled. Thus, the district court’s decision to grant Pitsicalis summary judgment on his declaratory judgment claims was reversed and those claims were remanded to the district court with instructions for the district court to enter summary judgment in favor of Experience Hendrix.

Trademark infringement and deceptive trade practices. Turning to the claims that Experience Hendrix asserted against Pitsicalis, Pitsicalis challenged only one aspect of the district court’s conclusion that he is liable for infringing Experience Hendrix’s trademarks, the court noted. Pitsicalis argued on appeal that his domain names hendrixlicensing.com and hendrixartwork.com did not violate the federal Lanham Act by infringing Experience Hendrix’s trademark “Hendrix.” However, the district court’s determination that the domain names did infringe that mark was affirmed.

Injunctive relief. Briefly summarized, paragraph 1(iii)-(iv) of the challenged injunction permanently enjoined Pitsicalis from using Pitsicalis’s “’guitar and headshot’ logo or any similar mark, brand, or logo,” and from using the Jimi Hendrix signature set forth in the injunction, “or any similar signature, mark, brand, or logo.” But then, contrary to that provision, the first sentence in the challenged Paragraph 5 states that “[n]othing in this Permanent Injunction shall be construed as enjoining, prohibiting, or otherwise inhibiting [Pitsicalis] or any other entity or person from creating, reproducing, advertising, distributing, selling, or otherwise commercially trading in images or likenesses of Jimi Hendrix.”

These two provisions were in some conflict or at least were ambiguous when read together, according to the appellate court. Thus, in that particular, the injunction did not clearly state what conduct was and was not restrained. Therefore, the permanent injunction was vacated and remanded to the district court to revise the permanent injunction in order to clarify what conduct was and was not restrained.

Damages. Experience Hendrix also sought damages, under both the Lanham Act and the WCPA, to compensate Experience Hendrix for Pitsicalis’s past infringement. The jury awarded Experience Hendrix several different measures of damages under both acts, totaling over $1.7 million. The district court struck all but $60,000 of that award.

On appeal, the court agreed with Experience Hendrix that it was error for the district court, under Fed. R. Civ. P. 50(b)(3), to set aside all but $60,000 of the jury’s award. There was legally sufficient evidence to support that award. However, the district court ruled alternatively that, if the appellate court reinstated the jury’s damages award, as the court did here, then a new trial on damages was warranted under Rule 59. The district court’s alternative ruling for a new trial was not an abuse of discretion and the dispute was remanded for a new trial limited to the issue of damages, the court held.

Under the circumstances of this case and in light of the standard of appellate review, the evidence was sufficient to permit a reasonable jury to calculate the profits Experience Hendrix lost due to Pitsicalis’s infringing conduct, the court reasoned. During the jury instruction conference, after the close of evidence, Experience Hendrix acknowledged that it had not presented the jury with any evidence of its expenses. This was because Experience Hendrix mistakenly believed that it bore the burden of proving only its lost revenue and that, once it had made that showing, the burden shifted to Pitsicalis to prove any expenses that jurors should deduct in order to calculate Experience Hendrix’s lost profits. But the burden remained with Experience Hendrix, as the plaintiff, to prove its actual damages, including its own lost profits, the court noted.

Notwithstanding Experience Hendrix’s confusion as to the burdens of proof, there was sufficient evidence before the jurors from which they could calculate the profits that Experience Hendrix lost due to Pitsicalis’s infringing conduct, the court held. There was testimony describing the nature of licensing revenue generally, as a licensee’s payment to the licensor of a percentage of the licensee’s revenue, in return for the use of the licensor’s intellectual property. In addition, the jury had before it financial documents, including Exhibit 60, which summarized and compared Experience Hendrix’s licensing revenue from 2006 through 2009.

Moreover, there was significant evidence to support the jury’s finding of the fact that Pitsicalis’s deceptive trade practices injured Experience Hendrix’s reputation and goodwill. As to the amount of that harm, the jury had evidence regarding the total licensing revenue that Experience Hendrix earned during the period of time before and during Pitsicalis’s infringing activity. From this information, jurors could have calculated the amount of harm Pitsicalis caused to Experience Hendrix’s business reputation and goodwill “with reasonable certainty,” the court explained.

Attorney fees. Finally, Experience Hendrix requested an award of attorney’s fees in the amount of over $500,000. The district court awarded a much smaller amount, $50,000. Experience Hendrix challenged the court’s denial of much of its attorney fee request. The lower court’s fee award was vacated and remanded for the district court’s reconsideration because many of the factors on which the district court based its attorney fee decision were now changed, the appellate court ruled.

The case is Nos. 11-35858 and 11-35872.

Attorneys: John D. Wilson (Bennet Bigelow & Leedom) for Experience Hendrix LLC. Thomas T. Osinski (Osinski Law Offices PLLC) for Hendrixlicensing.com Ltd.

Companies: Experience Hendrix LLC; Hendrixlicensing.com Ltd.

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