Case 2:13-cv-06004-JAK-AGR Document 375 Filed 05/01/15 Page 1 of 7 Page ID #:10906

1 Paul H. Duvall (SBN 73699) Richard S. Busch (TN BPR 014594) E-Mail: [email protected] (pro hac vice) 2 KING & BALLOW E-Mail: [email protected] 6540 Lusk Blvd., Suite 250 Sara R. Ellis (TN BRP 030760) (pro hac vice) 3 San Diego, CA 92121 Email: [email protected] (858) 597-6000 KING & BALLOW 4 Fax: (858) 597-6008 315 Union Street, Suite 1100 Attorneys for Defendants and Counter- Nashville, TN 37201 5 Claimants Frankie Christian Gaye and (615) 259-3456 Fax: (615) 726-5417 Nona Marvisa Gaye Attorneys for Defendants and Counter- 6 Claimants Frankie Christian Gaye and Nona Marvisa Gaye 7

8 Mark L. Block (SBN 115457) Paul N. Philips (SBN 18792) E-Mail: [email protected] E-Mail: [email protected] 9 WARGO & FRENCH LLP The Law Offices of Paul N. Philips, APLC 1888 Century Park East; Suite 1520 9255 West Sunset Boulevard 10 Los Angeles, CA 90067 West Hollywood, CA 90069 (310) 853-6355 Fax: (310) 853-6333 (323)813-1126 Fax: (323) 854-6902 11 Attorneys for Defendants and Counter- Attorney for Defendant and Counter-Claimant Claimants Frankie Christian Gaye and Marvin Gaye III 12 Nona Marvisa Gaye

13 UNITED STATES DISTRICT COURT 14 CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION 15 16 PHARRELL WILLIAMS, an Case No. CV13 -06004 -JAK (AGRx) individual; ROBIN THICKE, an 17 individual; and CLIFFORD HARRIS, Hon. John A. Kronstadt JR., an individual, 18 COUNTER-CLAIMANTS’ JOINT Plaintiffs, MOTION FOR PREJUDGMENT 19 INTEREST vs. 20 BRIDGEPORT MUSIC, INC., a Motion Hearing: 21 Michigan corporation; FRANKIE Date: June 29, 2015 CHRISTIAN GAYE, an individual; Time: 8:30 am 22 MARVIN GAYE III, an individual; Ctrm: 750 NONA MARVISA GAYE, an 23 individual; and DOES 1 through 10, inclusive, Action Commenced: August 15, 2013 24 Trial Date: February 24, 2015 Defendants. 25 ______26 AND RELATED COUNTERCLAIMS 27

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1 Counter-Claimants Nona Marvisa Gaye, Frankie Christian Gaye and Marvin Gaye III 2 (hereinafter “the Gayes”) respectfully move this Court, pursuant to 17 U.S.C. § 504(b) of 3 the Copyright Act and operative caselaw, for an award of prejudgment interest on the actual 4 damages and profits awarded to the Gayes in the jury’s Special Verdict (Dkt. No. 320). 5 I. INTRODUCTION 6 The jury found that the song “Blurred Lines” infringes upon the musical composition 7 copyright in “Got to Give it Up” owned by the Gayes, and imposed liability on Plaintiff 8 Robin Thicke (“Thicke”), and Plaintiff Pharrell Williams and Williams’ publishing entity, 9 Counter-Defendant More Water From Nazareth Publishing, Inc. (collectively, the “Williams 10 Parties”). (Dkt. No. 320). As compensatory damages for the infringement, the jury awarded 11 the Gayes $4,000,000.00 in actual damages against Thicke and the Williams Parties, 12 $1,768,191.88 in profits against Thicke, and $1,610,455.31 in profits against the Williams 13 Parties, for a total compensatory damages award of $7,378,647.19. ( Id .). The jury also 14 awarded the Gayes $9,375.00 in statutory damages against Thicke and the Williams Parties. 15 Pursuant to 17 U.S.C. § 504(b) of the Copyright Act and operative caselaw in this Circuit, 16 this Court should also award the Gayes prejudgment interest on the total compensatory 17 damages award against Thicke and the Williams Parties. 18 II. ARGUMENT 19 A. The Gayes are Entitled to an Award of Prejudgment Interest 20 The United States Court of Appeals for the Ninth Circuit has specifically found 21 “that prejudgment interest is available under the Copyright Act.” Polar Bear Prods., 22 Inc. v. Timex Corp. , 384 F.3d 700, 716 (9th Cir. 2004); see also Frank Music Corp. v. 23 Metro Goldwyn–Mayer, Inc., 886 F.2d 1545, 1551 (9th Cir.1989) (holding prejudgment 24 interest as an available remedy under the 1909 Copyright Act). In particular, the Ninth 25 Circuit found that prejudgment interest is appropriate pursuant to 17 U.S.C. § 504(b) of 26 the Copyright Act “to compensate fully a copyright owner for the misappropriated value 27 of its property and ‘to avoid unjust enrichment by defendants, who would otherwise 28 benefit from this component of profit through their unlawful use of another’s work.” - 1 -

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1 Polar Bear Prods. , 384 F.3d at 718 (quoting TVT Records v. Island Def Jam Music 2 Group, 279 F.Supp.2d 366, 410 (S.D.N.Y.2003)). 3 As the Ninth Circuit further explained: 4 [P]rejudgment interest may be necessary to discourage needless delay and 5 compensate the copyright holder for the time it is deprived of lost profits or 6 license fees. . . . Simply put, prejudgment 7 Id. at 718. The Ninth Circuit then went on to say that “prejudgment interest is a different 8 remedy for a different harm” and “may be necessary at times to effectuate the legislative 9 purpose of making copyright holders whole and removing incentives for copyright 10 infringement.” Id . Therefore, prejudgment interest is routinely awarded to prevailing 11 copyright owners in infringement cases. See, e.g., Excelsior Coll. v. Frye , Case No. 04- 12 CV-0535-WQH, 2007 WL 672517, at *4 (S.D. Cal. Feb. 21, 2007) (“[A]n award of 13 prejudgment interest [on actual damages and profits] furthers the legislative purpose of 14 removing incentives for copyright infringement”); Precision Craft Log Structures, Inc. 15 v. Cabin Kit Co., Inc. , Case No. 05-CV-0199-EJL, 2007 WL 1412502, at *2 (D. Idaho 16 Jan. 17, 2007) (awarding prejudgment interest in copyright case); see also 4 Melville B. 17 Nimmer & David Nimmer, Nimmer on Copyright § 14.02[C][1] (“the trend may 18 currently be towards awards of prejudgment interest generally in federal courts”) 19 (internal citations omitted). 20 Here, while the jury awarded the Gayes compensatory damages in the form of 21 actual damages and the profits realized by Thicke and the Williams Parties, those 22 damages do not fully compensate the Gayes for the infringement of “Got to Give it Up.” 23 Regarding actual damages, the infringement deprived the Gayes of the use of money 24 they would have received as a licensing fee had Thicke and the Williams Parties 25 properly obtained a license. The jurors heard from Nancie Stern, who explained that the 26 use of “Got to Give it Up” in “Blurred Lines” would have resulted in a 50% 27 ownership/licensing fee being granted to the Gayes if a license had been negotiated 28 before release of “Blurred Lines,” and a much higher percentage after release. ( See Trial - 2 -

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1 Tr., March 3, 2015 at 27:18-22, 28:16-22, attached to Busch Decl. as Exhibit A). This 2 testimony regarding a 50% licensing fee supports the jury’s actual damages award of $4 3 million, as the Gayes’ financial expert, Gary Cohen, testified that the publishing revenue 4 for “Blurred Lines” was over $8 million. (See id. at 48:4-21). Thus, by failing to obtain a 5 license for the use of “Got to Give it Up” and account to the Gayes, Thicke and the 6 Williams Parties have deprived the Gayes of the use of such publishing revenues. 7 Similarly, Thicke and the Williams Parties have been unjustly enriched through 8 their infringement by retaining such publishing revenues and through realizing the $3.38 9 million in profits that the jury also awarded to the Gayes. As the Ninth Circuit stated in 10 Polar Bear Prods. , prejudgment interest will serve to avoid such unjust enrichment by 11 Thicke and the Williams Parties, “who would otherwise benefit from this component of 12 profit through their unlawful use of another’s work.” 384 F.3d at 718. Thus, an award of 13 prejudgment interest is necessary as a further disincentive for Thicke and the Williams 14 Parties’ infringement and to make the Gayes whole pursuant to 17 U.S.C. § 504(b) and 15 the Ninth Circuit’s decision in Polar Bear Prods. 16 B. Amount of Prejudgment Interest 17 As to the proper amount of prejudgment interest, the Ninth Circuit has held that 18 such pre-judgment interest should be calculated in the same manner as post-judgment 19 interest under 28 U.S.C. § 1961(b), i.e. “at a rate equal to the weekly average 1-year 20 constant maturity Treasury yield, as published by the Board of Governors of the Federal 21 Reserve System, for the calendar week preceding the date of the judgment.” Price v. 22 Stevedoring Servs. of Am., Inc. , 697 F.3d 820, 836 (9th Cir. 2012); Frank Music Corp. , 23 886 F.2d at 1552 (applying this rate in a copyright infringement case); Western Pacific 24 Fisheries, Inc. v. SS President Grant, 730 F.2d 1280, 1288 (9th Cir.1984). 25 As for the starting date for calculating prejudgment interest, in the only copyright 26 infringement case in the Ninth Circuit addressing the issue, Frank Music Corp. , the court 27 accepted the plaintiffs’ request for prejudgment interest from the date of the last 28 infringing performance, and therefore declined to decide “whether an award of - 3 -

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1 prejudgment interest from some earlier point in time, such as the first infringement or 2 date of notice, would be appropriate.” Frank Music Corp. , 886 F.2d at 1552. Here, the 3 Gayes submit that an earlier starting date for calculating prejudgment interest – the 4 “accrual date” – is appropriate. (See Decl. of Gary Cohen at ¶ 3). 5 Gary Cohen, the Gayes’ financial expert, determined the accrual date for 6 prejudgment interest by calculating the average payout date of the royalties that formed 7 the basis of the jury’s award of actual damages and profits based on the “Blurred Lines” 8 single release date of March 23, 2013. ( See id. at ¶¶ 4-6). Based on his experience in the 9 music industry, Mr. Cohen assumed royalties began to be paid forty-five (45) days after 10 the end of the quarter in which the release occurred, or May 15, 2013. (See id. at ¶ 6). 11 Assuming royalties were paid evenly between that date and the present, the average 12 payout date would have been May 8, 2014. ( See id .). Though in reality the weighted 13 average date would likely be earlier because more royalties were earned during the first 14 year following release than the second, May 8, 2014, is a conservative accrual date for 15 calculation of prejudgment interest. (See id .). 16 Using the accrual date of May 8, 2014, and the federal post-judgment interest rate 17 on the date of the jury verdict of 0.25% pursuant to 28 U.S.C. § 1961(b),1 the total 18 prejudgment interest accrued on the actual damages and profits award as of today’s date 19 of May 1, 2015, is $18,093.00. ( See id. at ¶¶ 7-8). Additional interest after May 1, 2015 20 through the date of judgment will accrue at a rate of $50.54 per day. (See id. at ¶ 8). 21 The Gayes submit that the foregoing calculation of prejudgment interest is 22 reasonable and appropriate, and request that the Court calculate prejudgment interest 23 accordingly, from the accrual date of May 8, 2014, through the date the judgment is 24 entered by the Court. 25

26 1 27 Mr. Cohen submits that this rate is a very low interest rate when compared to rates in jurisdictions, such as the California state court prejudgment interest rate of 10%, which 28 is forty (40) times higher. (See id. at ¶ 7). - 4 -

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1 III. CONCLUSION 2 Based on the foregoing, the Gayes respectfully request this Court award the Gayes 3 prejudgment interest. 4 5 Dated: May 1, 2015 Respectfully submitted, 6 KING & BALLOW 7 8 By: /s/ Richard S. Busch RICHARD S. BUSCH 9 PAUL H. DUVALL 10 SARA R. ELLIS

11 WARGO & FRENCH, LLP 12 By: /s/ Mark L. Block 13 MARK L. BLOCK 14 ARNOLD & PORTER LLP 15 16 BY: /S/ DANIEL B. ASIMOW MARTIN R. GLICK 17 DANIEL B. ASIMOW 18

19 Attorneys for Defendants and Counter-Claimants 20 Nona and Frankie Gaye

21 THE LAW OFFICES OF PAUL N. PHILIPS, 22 APLC

23 By: /s/ Paul N. Philips 24 PAUL N. PHILIPS

25 Attorney for Defendant and Counter-Claimant 26 Marvin Gaye III

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