SPRINGFIELD — It’s not often you hear classic films like “The Wizard of Oz” and “Gone With the Wind” mentioned alongside the 1990s Michael Jordan flick “Space Jam.”
But the pictures do have at least two things in common — Warner Bros. Entertainment, Inc. and Frederick J. Sperling.
Sperling, a partner at Schiff, Hardin LLP, got involved with the company when he was defending Jordan in a separate movie-related case while the Bulls star was finishing “Space Jam,” the animated basketball comedy produced by Warner Bros. and featuring characters from the Looney Tunes.
“So, I went out and I learned about both the technical aspects and the legal aspects of the industry from Warner Brothers,” Sperling said this week. “They gave me a little seminar about all of that.”
The connection two decades ago led the company to call in Sperling years later for a copyright lawsuit involving the classic films it produced, a suit that resulted this week in an appeals court upholding a $2.57 million damages award for the company.
“It’s an important opinion,” Sperling said. “It affirms the multimillion-dollar damages award, and it sends a strong message about the risk of engaging in copyright and trademark infringement.”
A three-judge panel of the 8th U.S. Circuit Court of Appeals in St. Louis on Tuesday ruled the award was reasonable after a company used images from the films then sold them on various kinds of merchandise.
Art & Vintage Entertainment Licensing Agency, or AVELA, extracted images of Dorothy, Tin Man, Scarlett O’Hara and the cartoon cat-and-mouse duo Tom and Jerry, among others, from publicity materials and then licensed them for use on shirts, lunch boxes, playing cards and other souvenirs.
Warner filed copyright and trademark infringement claims in 2006 under the Copyright Act, the Lanham Act and state law.
In 2009, a federal court granted summary judgment for Warner on the copyright infringement claims and entered a permanent injunction that prevented AVELA from doing anything with the images except reproducing copies of the publicity materials.
In an appeal at the 8th Circuit the first time, a trio of judges upheld most of the injunction, ruling the company could make products with one image from the publicity materials reproduced as an identical two-dimensional image. It could not make products that juxtaposed multiple images or an image with a phrase from the film or extend the two-dimensional images into three dimensions.
On remand, the district court awarded $10,000 per infringed copyright, with 257 total copyrights. And the appellate court rejected AVELA’s claim that the award went against due process because it was disproportionate to the offense and insufficiently reasoned. Circuit Judge Raymond W. Gruender in the 14-page opinion wrote that AVELA’s shoddy recordkeeping made it impossible to calculate actual damages.
Additionally, and critically, “the district court noted that over the many years of litigation (now a decade), AVELA did not cease the infringing activity at any time. That the district court therefore considered a substantial damages award necessary to deter future infringement and provide sufficient restitution to the copyright holder is not clearly erroneous,” Gruender wrote.
He added that the award is well within the range of $750 to $30,000 per infringed work that’s contemplated by the Copyright Act, and that AVELA’s infringements were “far more extensive” than those in one of the other copyright cases cited, in which an individual shared music files on a peer-to-peer network.
Sperling noted that the appellate court also affirmed further limits this week on the way the films’ images could be used. Under the prior appellate ruling, AVELA was allowed to reproduce images from the publicity posters onto products.
“That changed in the subsequent appeal, and based on the trademark ruling, they can no longer do that,” Sperling said. “They could reproduce the image itself simply as a poster, but they couldn’t use it on any product as they could have under the prior decision.”
Christopher P. Keleher, of the Keleher Appellate Law Group LLC, represented AVELA. He could not be reached for comment.
The case is Warner Bros. Entertainment, Inc, et al. v. X One X Productions, et al., No. 15-3728.