IP Law News

Ad Model’s $1.1M Right-of-Publicity Award Against GNC Upheld

Dec. 28, 2018, 8:34 PM

An advertising model can keep the $1.1 million he won in a verdict against General Nutrition Centers Inc. (GNC) but won’t get the tens of millions he sought in a right-of-publicity lawsuit, a California appeals court ruled.

The Court of Appeal of California, Second Appellate District, Dec. 27 refused to disturb the trial court’s award or its decision that GNC exceeded the licensing terms on the use of model Jason Olive’s image in its ad campaign. Both Olive and GNC also appealed the lower court’s ruling that neither side deserved attorneys’ fees, but the appeals court said neither party prevailed nor got anywhere close to what it sought from the jury.

The opinion highlights that each side generally pays its own way in cases where neither side truly prevails, as well as the difficulty of proving damages from the unlicensed use of an image in advertising.

GNC hired Olive and 15 other models for its Live Well ad campaign in 2010 but went beyond the scope of its licenses to use the photos. GNC initially denied allegations in Olive’s 2012 suit but admitted liability for unauthorized use before trial, leaving only damage figures to the jury.

Olive, who has also worked as an actor, including on the television show “Tyler Perry’s For Better or Worse,” sought $1.5 million for the licensing fee, $2 million for emotional distress, and between $54 to $176 million in ill-gotten GNC profits from the unlicensed use of his image.

GNC argued he was entitled to no more than $4,800 in actual damages, the appellate opinion said.

The jury granted $213,000 for the licensing fee and $910,000 for emotional distress, but found Olive didn’t prove a link between GNC revenues and use of his image.

The appeals court rejected Olive’s and GNC’s respective arguments that they prevailed and deserved attorneys’ fees, since the jury’s award veered widely from what each side sought. It also rejected Olive’s request to reverse decisions that excluded witnesses, and denied a motion to amend jury instructions.

Olive had proposed an addition to jury instructions stating that GNC had to prove the portion of its revenue attributable to factors other than Olive’s likeness. But California law clearly states an injured party must tie revenue to unlicensed use, while the defendant must only prove expenses to deduct from that revenue, the appeals court said.

‘Primitive’ Analysis

The court also upheld the exclusion of two expert witnesses for relying on “nearly data-free and methodologically primitive” analysis to estimate damages for Olive. One compared spokesman agreements of iconic celebrities like George Foreman and Micheal Jordan with use of Olive’s images to conclude Olive drove 1 to 3 percent of GNC revenue, the court said.

That witness also mischaracterized a deposition by GNC’s CEO as an admission that in-store marketing drove 1 percent of revenue, the court said. When asked for a percentage, the executive had estimated “anywhere from zero to slightly more than zero; very little” before adding “I’d go zero to one,” the opinion said.

The expert found a causal link between unlicensed use of Olive photos and GNC revenue growth without meaningful evidence, the court said. The second expert was struck for relying on the other expert’s flawed analysis.

Judge Gary Micon wrote the opinion, joined by Judges Nora Margaret Manella and Thomas L. Willhite.

Johnson & Johnson LLP and The Hamideh Firm PC represented Olive. McGuire Woods LLP represented GMC.

This case is Olive v. Gen. Nutrition Ctrs., Inc., 2018 BL 479914, Cal. Ct. App., 2d Dist., No. B279490, 12/27/18

To contact the reporter on this story: Kyle Jahner in Washington at kjahner@bloomberglaw.com

To contact the editor responsible for this story: Keith Perine at kperine@bloomberglaw.com

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