(CN) – A Nevada coffee company must pay the children of late reggae giant Bob Marley nearly $2.5 million in damages for trademark infringement, a Ninth Circuit panel has ruled.
In an unsigned memorandum, the court’s three-judge panel unanimously affirmed a series of 2017 rulings in favor of 56 Hope Road Companies – the business entity Marley’s children formed to acquire and exploit the singer’s assets, rights and commercial interests – that Jammin Java Corporation violated a licensing agreement to sell coffee under the Marley trademark.
Those rulings, issued by U.S. District Judge Stephen Wilson in Los Angeles, rejected Jammin Java’s contention that it wasn’t required to notify Hope Road in writing of the violation to avoid the contract’s termination because Hope Road had already modified the contract orally.
“Jammin Java is correct that under California contract law oral modification, waiver, and equitable estoppel defenses may be asserted despite contractual provisions prohibiting oral waiver or oral modifications,” the appellate panel wrote in the 5-page memorandum Wednesday.
“However, we may affirm the district court’s grant of partial summary judgment on any basis properly supported by the record,” the panel continued. “Here, the record demonstrates that Jammin Java breached the agreement. Both the adverse action taken by the Securities and Exchange Commission against Jammin Java and Jammin Java’s failure to provide ‘Quarterly Statements’ and ‘Annual Statements’ to 56 HR as required by the agreement constitute material breaches.”
Hope Road ended its contract with Jammin Java in June 2016 over late royalty payments and financial statements, and a negative liability finding imposed by the U.S. Securities and Exchange Commission. It subsequently sued Jammin Java for breach of contract and trademark infringement in Los Angeles County Superior Court.
Jammin Java counterclaimed in federal court in Los Angeles, accusing Hope Road of terminating the contract in bad faith. Noting that Hope Road knew Jammin Java was about to receive up to $10 million in new funding, attorneys for the coffee company accused Hope Road of terminating the contract to secure a higher royalty rate.
Wilson nonetheless held in three 2017 rulings that the written provisions of the licensing agreement precluded Jammin Java’s oral modification, waiver and equitable estoppel defenses, a finding upheld by the Ninth Circuit Wednesday.
“[T]he written notice provision unambiguously sets out the procedure through which Jammin Java could terminate the agreement,” the appellate panel said. “Moreover, the intent of the provision is clear: to give the party allegedly in breach notice and an opportunity to cure the breach without terminating the agreement. Because the language of the written notice provision is unambiguous, and its intent is clear, the district court properly enforced this provision against Jammin Java.”
The panel also discussed Hope Road’s damages award. Finding the roughly $2.46 million award by Wilson reasonable, it said willful trademark infringement by Jammin Java wasn’t required for making the award.
“[T]he record demonstrates, and the district court correctly found, that Jammin Java’s unauthorized use of the Marley Coffee trademarks precluded Hope Road’s use of the same marks during the infringing period,” the panel ruled. “Because Jammin Java’s profits during the infringing period were a reasonable measure of Hope Road’s damages, the district court did not err in awarding damages in the amount of $2,458,835.20 to Hope Road.”
In an email Thursday, Hope Road attorney Bonnie Eskenazi said “the Marley family [was] pleased with the result.”
Eskenazi practices with Greenberg Glusker Fields Claman & Machtinger in Los Angeles.
Arthur Hawgood III, of Hawgood Hawgood & Moran in Columbia, Maryland, represented Jammin Java. He did not immediately reply to a comment request Thursday.
Senior U.S. Circuit Judge A. Wallace Tashima, U.S. Circuit Judge Kim McLane Wardlaw and U.S. District Judge Robert Pratt of the Southern District of Iowa made up the panel.
Also Wednesday, a different Ninth Circuit panel upheld the dismissal of a suit filed against Hope Road over an unfinished movie called “Rebels,” which includes fictionalized events from Bob Marley’s life.
Brought by Royal Palm Filmworks, the lawsuit sought to block Hope Road from allegedly interfering in the production and distribution of “Rebels” based on its copyrights.
U.S. District Judge Philip Gutierrez, also in Los Angeles, dismissed the case because Royal Palm failed to sufficiently allege the film had been finalized, a finding with which the three-judge appellate panel agreed Wednesday.
“The district court correctly concluded that it was entirely unclear which copyrights, if any, to the music and images of Marley might be subject to infringement challenges until the film is completed,” it ruled in a unanimous, unsigned memorandum.
U.S. Circuit Judges Carlos Bea and Johnnie Rawlinson, and Chief U.S. District Judge Thomas Rich of the Eastern District of Washington, sat on the Royal Palm panel.