Polar Bear Productions, Inc. v. Timex Corporation

384 F.3d 700 (9th Cir. 2004)

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Nature of the Case

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Facts

D entered into a contract with P to sponsor P's production of an extreme-kayaking film entitled 'PaddleQuest.' D paid P a $ 25,000 fee and provided assistance in promoting and showing the film. In return, D received an exclusive one-year license to use the film in its promotional materials, and the D logo was featured prominently on the film's packaging and posters, as well as on equipment used in the film itself. The 'PaddleQuest' promotion was 'an unqualified success.' D enjoyed its association with 'PaddleQuest' so much that it continued to use images from the film in its promotion of the Expedition line of watches after the license expired. D used 'PaddleQuest' materials at twelve different trade shows between 1995 and 1998. These materials included a ten-minute promotional 'loop tape' -- so named because it is shown continuously -- displayed at D's presentation booth at the trade shows. Under the license agreement, D had the option of retaining Polar Bear to produce such a video at a price to be determined by the parties. D instead notified P that it planned to produce the tape separately. P warned D that it had no right to use images from 'PaddleQuest' without permission, and d agreed not to produce the tape. Without Polar Bear's knowledge or permission, D proceeded to create the video, one-third of which consisted of images from 'Paddle-Quest.' P learned of the infringement approximately two years later when the producer of 'PaddleQuest,' witnessed the D-produced loop tape playing continuously at a trade show. At the same trade show, P also witnessed D showing 'PaddleQuest' in its entirety at its display booth as part of the watchmaker's promotional efforts. D also used copyrighted images on two other occasions -- in a promotional campaign associated with the soft drink Mountain Dew and in videos used to train salespeople at a large national retailer. P expressly denied D permission to use the images, and D deleted any reference to P's copyright. D does not dispute that it used the copyrighted images without permission and beyond the period of time allowed by the license. P sued for copyright and trademark infringement. Considering only the copyright and breach of contract claims, the first jury returned a verdict for P with compensatory damages totaling $2.1 million. The district court vacated the verdict and ordered a new trial on the grounds that P violated certain pretrial evidentiary rulings. The second trial was limited to the issue of damages for copyright violations. The second jury returned a verdict of $2,415,00.00 -- $315,000 in actual damages and $2.1 million in indirect profits related to D's infringements. Everyone appealed. D asserts that recovery for damages should be limited to instances of infringement occurring within three years of the commencement of the lawsuit. D argues that there is insufficient evidence to support the jury award and that the district court erroneously admitted the testimony of P's expert witness.