Wednesday 15 May 2019

The Eminem Show gets its curtain call following Supreme Court decision - $225,000 damages award stands

After having its damages award slashed on appeal to the Court of Appeal, Eminem’s company, Eight Mile Style, has now had its application for leave to appeal that decision declined in a unanimous decision of the Supreme Court delivered on 14 May 2019.

A quick recap 

In the High Court proceedings, Eight Mile Style had been successful in legal proceedings brought against the New Zealand National Party for copyright infringement of Eminem’s iconic song ‘Lose Yourself’. Damages of NZ$600,000 were awarded based on a reasonable royalty rate rather than on actual damage suffered by Eight Mile Style. This was significantly reduced by the Court of Appeal to NZ$225,000 because the High Court was found to have erred by:

  • adopting an international baseline figure for the licence fee, and
  • failing to ensure that the licence terms reflected the actual infringement, which was in New Zealand, and in the context of election advertising that was directed at those eligible to vote in New Zealand.

Seeking leave to appeal 

Eight Mile Style sought leave to appeal to the Supreme Court, New Zealand’s highest appellate court, on three key issues, namely:

  1. the assessment of compensatory damages under the user principle;
  2. the basis for an award of additional damages under s121(2) of the Copyright Act; and
  3. the appellate approach to appeals against the quantum of a damages award.

On the first point, Eight Mile Style was unable to convince the Supreme Court that the issues were of public importance or general commercial significance that would justify a further appeal. The Supreme Court commented that most of the points were fact specific, and that there was no appearance of a miscarriage of justice arising from how the matters were dealt with in the Court of Appeal.

In relation to the question of additional damages, although the Supreme Court accepted that consideration of additional damages claims in copyright matters may be of public importance or general commercial significance, that was not so in this case. Specifically, both the High Court and Court of Appeal found that the National Party had not turned a blind eye to the risk of infringement (it had sought some advice on the issue) nor was it reckless in its actions. The Supreme Court did not see that there were sufficient prospects of success in arguing that there had been a failure by the lower courts to award additional damages, such as to justify leave for a further appeal.

On the final issue of the appellate approach to appeals on the quantum of damages, the Supreme Court declined to grant an appeal on this basis given its earlier two findings on the more substantive points relating to the underlying damages considerations.

In the end, Eight Mile Style will have to be content that it had a resounding win on the question of liability and, despite the reduction, still secured a hefty damages award against the National Party for its decision to use the track entitled ‘Eminem-esque’. The focus now turns to the National Party’s claim against the suppliers and licensors of the ‘Eminem-esque’ track, who apparently advised the National Party that the track was safe to use.