We have recently been talking in this space about intellectual property licensing. A California Court of Appeal recently decided Olive v. General Nutrition Centers, Inc., an interesting licensing dispute in which the defendant admitted having engaged in activity that violated a license to use a model’s photos.
On December 27, the California Court of Appeal, Second Appellate District, upheld a jury verdict in favor of actor and model Jason Olive against General Nutrition Centers for violating a license he had granted GNC to use his image in print advertising. Olive had signed a release authorizing GNC to use pictures from a photoshoot in advertising for one year in exchange for a fee. GNC had the right to renew for a second year for additional compensation.
Admission of license violation
GNC used Olive’s images after the license had expired, so Olive sued them in California state court for license breach, emotional distress and violation of California laws protecting the right of publicity. The right of publicity protects a person from another party using the person’s name or image without permission.
In the trial court, GNC admitted it had violated the license, for which the jury awarded Olive $213,000 in damages. It also awarded $910,000 for emotional distress. This $1.123 million award was many millions less than he had requested, but the court upheld it on appeal.
Olive had sought:
- Disgorgements of GNC profits resulting from the unauthorized use of his pictures ($54 to $175.9 million)
- Licensing fees for going beyond the scope of the license ($1.5 million)
- Punitive damages, which are meant to punish a wrongdoer
- Past and future emotional distress damages ($2 million)
The appeals court agreed that Olive’s expert witness and methodology had not established a credible link between the unauthorized use of Olive’s pictures and measurable company profits. GNC had argued that Olive should have been limited to damages of $4,800 for a licensing fee.
No clear prevailing party
Interestingly, the appellate court agreed with the lower court that because the verdict was so far from what each party sought, neither was the prevailing party for purposes of having the unsuccessful party pay the other’s attorney’s fees and costs. Each party appropriately paid its own legal fees and costs without reimbursement.