Kleier Advertising, Inc. v. Premier Pontiac, Inc., 88-2293

• Decision Date: 12 December 1990
• Docket Number: No. 88-2293,88-2293
• Citation: 921 F.2d 1036
• Parties: 1991 Copr.L.Dec. P 26,668, 17 U.S.P.Q.2d 1200, 18 Media L. Rep. 1529 KLEIER ADVERTISING, INC., & Kleier Marketing, Inc., Plaintiffs/Appellants, v. PREMIER PONTIAC, INC.; Bill Stokely, dba Stokely Outdoor Advertising and Sign Company; and Stokely Outdoor Advertising Inc., Defendants/Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1036

921 F.2d 1036

1991 Copr.L.Dec. P 26,668, 17 U.S.P.Q.2d 1200,

18 Media L. Rep. 1529

KLEIER ADVERTISING, INC., & Kleier Marketing, Inc. Plaintiffs/Appellants, v. PREMIER PONTIAC, INC.; Bill Stokely, dba Stokely Outdoor Advertising and Sign Company; and Stokely Outdoor Advertising Inc., Defendants/Appellees.

No. 88-2293.

United States Court of Appeals Tenth Circuit.

Dec. 12, 1990.

Jack A. Wheat of Roach Becker & Wheat, Louisville, Ky., for plaintiffs/appellants.

Mark G. Kachigian, Tulsa, Okl., (Paul B. Naylor, David Tracy of Naylor & Williams, Inc., and Stephen L. Wilkerson of Knight, Wagner, Tulsa, Okl., were on the briefs) for defendants/appellees.

Before BALDOCK and EBEL, Circuit Judges, and SAM, District Judge. ^*

SAM, District Judge.

This is a suit for copyright infringement, defamation and deceptive trade practices related to a Tulsa, Oklahoma automobile dealership's infringing use of a copyrighted advertising display.

On the copyright infringement claim, the jury returned a verdict for plaintiffs-appellants Kleier Advertising, Inc. and Kleier Marketing, Inc. (together Kleier) and against defendants-appellants Charlie Lister and Premier Pontiac, Inc. d/b/a Lister Pontiac (Lister Pontiac) and Bill Stokely and Stokely Outdoor Advertising, Inc. (Stokely, Inc.). The trial court dismissed Kleier's defamation claim by summary judgment and its deceptive trade practices claim by directed verdict. Kleier asserts on appeal that the trial court erred by: (1) interpreting the jury verdicts as (a) awarding Kleier a single amount against all defendants for lost license fees, and (b) not awarding Kleier the amount of Stokely, Inc.'s profits from infringement; (2) holding as a matter of law that prejudgment interest is not recoverable in copyright infringement actions; (3) granting the defendants summary judgment on the defamation claim; and (4) entering a directed verdict for the defendants on the deceptive trade practices claim.

Our jurisdiction over this case arises under 17 U.S.C. Sec. 101 et seq. (1982) (Copyright Act), 15 U.S.C. Sec. 1051 et seq. (1982) (Lanham Act) and 28 U.S.C. Sec. 1332 (1982) (diversity of citizenship). We hold the trial court did not commit reversible error in interpreting the jury verdicts or dismissing the defamation and deceptive trade practices claims. We further hold the trial court erred by refusing to grant Kleier prejudgment interest on its copyright infringement claim.

Accordingly we affirm in part, reverse in part and remand with instructions regarding addition of prejudgment interest to Kleier's award.

I.

Kleier is comprised of agencies that create and place advertisements in various media, with a specialty in automobile dealership advertising. The agencies annually license advertising programs to Kleier's clients at rates related in part to the licensee's geographical location.

This litigation centers on Kleier's syndicated advertising program that captions trouserless cartoon characters wearing boxer shorts with "We'll Beat the Pants Off Any Deal!" The program is used primarily for billboards to which are attached scaffolding supporting a life-size mannequin that appears to be a billboard company employee engaged in posting the advertising display. The mannequin is wearing a hardhat and workclothes, and its trousers are dropped to the ankles exposing loudly colored boxer shorts. Kleier obtained copyrights on the entire "Beat the Pants" advertising program.

Various trial exhibits (including national publications) show that since its creation in 1982, the "Beat the Pants" program has been a traffic-stopping success in forty geographical markets throughout the United States and Canada.

To obtain a license to use Kleier's "Beat the Pants" program, an automobile dealership must pay Kleier an upfront license fee that entitles the licensee to use the program for one year within the dealership's marketing area, with the right to renew for another year for fifteen percent of the initial license fee. In the Tulsa market the initial fee is $14,887.00 and the renewal fee is $2,233.05.

In December 1984 Lister Pontiac, a Tulsa automobile dealership owned by Charlie Lister, started using billboard advertising with the slogan, "We'll Beat the Pants Off Any Deal in Town." Affixed to Lister Pontiac's billboard was scaffolding and a trouserless mannequin in boxer shorts wearing the same type of clothing and in the same working posture as the Kleier mannequin. Stokely, Inc., a Tulsa advertising agency owned by Bill Stokely, displayed Lister Pontiac's billboard. Kleier alleges Lister Pontiac's use of the billboard display was an infringement of Kleier's copyright, for which Stokely unlawfully earned $16,500.00 during the 22-month period Lister Pontiac's billboard was exhibited.

After Kleier's discovery of the Lister Pontiac billboard, Kleier and its counsel notified Lister Pontiac and Stokely, Inc. that they were infringing Kleier's copyright. Lister Pontiac and Stokely, Inc. initially responded by inquiring whether they could purchase a license, but later discarded Kleier's answer to the inquiry and never contacted Kleier again.

Kleier then commenced this copyright infringement action against Charlie Lister, Lister Pontiac, Bill Stokely and Stokely, Inc. The defendants raised the affirmative defense that any similarity between the two advertising displays was merely coincidental because Charlie Lister or Bill Stokely had designed all Lister Pontiac advertising displayed on Stokely, Inc.'s billboards. At trial Kleier introduced evidence showing that at least six other Stokely, Inc. displays were copies of advertising campaigns created by various agencies.

During the course of the litigation, Kleier amended its complaint to add claims for defamation and deceptive trade practices based on an article that appeared in the Tulsa World, a local newspaper. The article first discussed Kleier's national success with and alleged copyright of the "Beat the Pants" program and Kleier's claim that Stokely, Inc. copied the proofs Kleier sent it. The article then quoted Bill Stokely as saying: (1) Kleier had sent the proofs five months after Stokely, Inc. had put up the first Lister Pontiac billboard, (2) Kleier copied Stokely, Inc., and (3) he thought the program was Stokely, Inc.'s idea.

The trial court granted the Stokely defendants summary judgment on the defamation claim and entered a directed verdict for them on the deceptive trade practices claim. On the remaining claims, the jury returned verdicts against all defendants, finding they intentionally engaged in copyright infringement.

Kleier appeals from the trial court's orders (1) interpreting the verdicts, (2) denying prejudgment interest, (3) granting summary judgment on the defamation claim and (4) directing the verdict on the deceptive trade practices claim.

II.

Kleier asserts it sought and was entitled to a jury award of damages plus profits, that is, the actual damages that resulted from the license fees the Lister defendants should have paid (evidenced as $17,120.05 representing licensure for one year and a one-year renewal) plus Stokely, Inc.'s profits from the infringing billboard display (evidenced as $16,500.00). Instead the jury returned verdicts (on identical verdict forms) against all defendants in the amount of $17,120.05.

The trial court denied Kleier's motion that requested entry of judgment of $17,120.05 against the Lister defendants and $16,500.00 against the Stokely defendants, for a total of $33,620.05. Kleier then moved unsuccessfully for judgment NOV or new trial, arguing that because the difference between damages and profits was small, the jury must have intended to award profits but instead awarded a slightly higher figure that could be remitted to the $16,500.00 profits figure. Rejecting Kleier's argument, the trial court said that although, under 17 U.S.C. Sec. 504(b) (1982), the jury could have made a separate award in the amount of Stokely, Inc.'s profits, the jury obviously chose to award only the amount of the lost license fee, for a total verdict of $17,120.05 against all defendants, jointly and severally. Order dated June 3, 1988, 698 F.Supp. 851, 851-52.

A motion for judgment NOV is to be analyzed as follows:

The standard for determining whether to grant a Motion for a judgment NOV ... is not whether there is literally no evidence to support the party opposing the motion, but whether there is evidence upon which the jury could properly find a verdict for that party.... [The trial court] must view the evidence most favorably to the party against whom the motion is made and give that party the benefit of all reasonable inferences from the evidence.

Graham v. Wyeth Laboratories, Div. of Am. Home Prod. Corp., 906 F.2d 1399, 1401 (10th Cir.1990) (quoting Brown v. McGraw-Edison Co., 736 F.2d 609, 612-13 (10th Cir.1984)).

We agree with the trial court and Kleier that 17 U.S.C. Sec. 504(b) entitles Kleier to an award in the amount of Stokely, Inc.'s profits from the infringing display and that a damages-plus-profits award would not have constituted "double recovery" unless the profits figure included an amount also awarded as actual damages. ¹ However, we also agree with the trial court that, after hearing all the evidence and being fully instructed on the actual and profits damages, ² the jury chose to award (in actual damages) the amount of the lost license fee, $17,120.04, as the total verdict against the defendants, jointly and severally. To conclude otherwise would be to substitute our judgment for the jury's verdict (which the trial court properly refused to do itself) or to create a double recovery because $17,120.05 was clearly the amount proven in actual damages.

III.

The trial court denied Kleier's request (in its motion for entry of judgment) for an award of prejudgment interest on the verdict, by adopting what the court considered the majority view that prejudgment interest is...