Legal Question in Intellectual Property in California
Hypothetical. An artist has retained full copyright to a fictitious character associated with a recognizable company brand through contracts, and discovers that outside the existing contract terms, the company created various unauthorized product lines using the character. For the sake of this hypothetical, lets say the brand company produces a range of specialized school satchels, and as an inducement to sale, offers a free gift of a lunch box and drink bottle with any school satchel sold. These free gifts feature the character owned by the artist. The artist understands that this use is an infringement, and wants to initiate a royalty payment for all unauthorized usage. The question is, is the artist only entitled to ask for a percentage of the free gifts value (cheaply manufactured goods) and provided "free" - or is the artist able to argue that as they were inducements to the sale of school satchels, they are entitled to a percentage of each school satchel sold? Curious.
2 Answers from Attorneys
Your attorney's negotiating position is to ask for the moon and the stars. You can always settle later for just the moon.
Mr. Stone's answer is a reasonable starting point in any proposed lawsuit. On a little more concrete basis, I would say that damages for infringement of intellectual-property rights will include proven lost royalty income, with a bias toward generosity toward a plaintiff that can show bad-faith conduct by the licensee, and the possibility of civil penalties, exemplary damages, etc. if the infringement is willful and brazen.
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