A federal district court ruled last week that Fifty-Six Hope Road Music Ltd. and Hope Road Merchandising, LLC, companies controlled by family members of late musician Bob Marley (collectively the “Marley Companies”), will receive $2.4 million in damages for trademark infringement from Jammin Java Corp., a California-based coffee company founded by one of Marley’s sons.

According to the complaint, Jammin Java failed to pay royalties to the Marley Companies for Jammin Java’s Marley-branded coffee, and continued to use certain trademarks after its license with the Marley Companies ended.

Jammin Java did not dispute that it was liable for infringement. Instead, the company argued it did not make profits from coffee sales after the licenses were terminated beyond its own costs and expenses, and thus the damages should be $0. The district court granted summary judgment in favor of the Marley Companies, concluding that Jammin Java could not prove its operating expenses offset profits from the unauthorized sales of Marley-branded coffee.

Takeaway:  Companies engaging in co-promotion agreements or other branded licenses should carefully plan to wind down use of third party content shortly before the agreements terminate or expire. Any use beyond the license term can result in significant damages.