1. State the issue before the appeals court.

2. What must a plaintiff prove to establish a claim of commercial misappropriation of a name or likeness (right of publicity)?

3. May an injured party recover profits from the commercial misappropriations of his or her name, in addition to either the amount of damages specified in the statute, which is $750, or actual damages?

Orthopedic Systems, Inc. (OSI), and Dr. Schlein entered into a contract, whereby OSI would manufacture and sell an unpatented product originally designed by Dr. Schlein called the “Schlein Shoulder Positioner,” which is to be used in arthroscopic shoulder surgery. The contract called for a 5% royalty of the list price less discounts. Over the years OSI’s marketing brochures thanked “Allen P. Schlein M.D. for his assistance in the development of the product.”

OSI paid royalty checks from January 1991 to January 2005, when OSI paid its last royalty payment. In January 2005, OSI sent a letter to Dr. Schlein stating that in light of the fact that there was no patent protection on the product, it would be discontinuing the royalty. From January 2005 until July 29, 2005, OSI continued to market and sell the product using Dr. Schlein’s name. OSI sued Dr. Schlein for declaratory relief and reformation of the royalty contract.

Dr. Schlein cross-complained for breach of contract and commercial misappropriation of his name. The jury awarded Dr. Schlein $616,043 for failure to pay royalties under the contract. OSI earned $1,220,000 in profits attributed to the use of Dr. Schlein’s name during the period from January 1, 2005 to July 31, 2005, after which OSI stopped using Schlein’s name. The trial court declined to award the profits to Schlein, and both parties appealed.

JUDICIAL OPINION

REARDON, J…. [T]he issue is whether Dr. Schlein was entitled to the $1,220,000 in profits earned by OSI’s use of his name….

California law has long recognized “the right to profit from the commercial value of one’s identity as an aspect of the right of publicity.” … “What may have originated as a concern for the right to be left alone has become a tool to control the commercial use and, thus, protect the economic value of one’s name.” … There are two vehicles a plaintiff can use to protect this right: a common law cause of action for commercial misappropriation and a section 3344 claim.

To prove the common law cause of action, the plaintiff must establish: “(1) the defendant’s use of the plaintiff’s identity; (2) the appropriation of plaintiffs name or likeness to defendant’s advantage, commercially or otherwise; (3) lack of consent; and (4) resulting injury.” To prove the statutory remedy, a plaintiff must present evidence of “all the elements of the common law cause of action” and must also prove “a knowing use by the defendant as well as a direct connection between the alleged use and the commercial purpose.” Section 3344 governs the statutory remedy. Section 3344, subdivision (a) (section 3344(a)) provides in relevant part that “in any action brought under this section, the person who violated the section shall be liable to the injured party or parties in an amount equal to the greater of seven hundred fifty dollars ($750) or the actual damages suffered by him or her as a result of the unauthorized use, and any profits from the unauthorized use that are attributable to the use and are not taken into account in computing the actual damages.”…

The human problem to be solved by section 3344(a) is the provision of a remedy to a person whose name, among other things, is misappropriated. That statute provides for damages (statutory or actual), as well as profits. We recognize there is some ambiguity regarding whether the minimum measure of damages is $750 plus profits or just $750. In Miller v. Collectors Universe, Inc. (2008) 72 Cal.

Rptr.3d 194 (Miller), the court traced the history of section 3344 in order to determine, inter alia, what the minimum statutory damages (i.e., the $750 award) set forth in subdivision (a) were meant to remedy. According to Miller, “[t]he statute’s legislative history reveals section 3344(a) was intended to fill ‘a gap which exist[ed] in the common law tort of invasion of privacy’ as applied to noncelebrity plaintiffs whose names lacked ‘commercial value on the open market.’ [Citation.] Unlike an entertainment or sports star, noncelebrity plaintiffs often could not prove damages under the common law; therefore, section 3344(a) as originally enacted in 1971 ‘established a concrete remedy for the little man with a minimum…payment,’ ‘a simple, civil remedy for the injured individual.’ [Citation.]” Thus, the Miller court confirmed that section 3344 was enacted to provide a “practical remedy for a noncelebrity plaintiff whose damages are difficult to prove….” (Miller, supra, at p. 72 Cal.Rptr.3d 194.) We can conceive no rational basis for the Legislature to limit the $750 as an alternative to all other damages, including profits. If someone profits from the unauthorized use of another’s name, it makes little sense to preclude the injured party from recouping those profits because he or she is entitled to statutory damages as opposed to actual damages….

An interpretation of section 3344(a) that limits the minimum measure of damages to $750 as an alternative to all other damages, including profits, would be contrary to the spirit of the statute and the long-recognized right to control the commercial use, and thus protect the economic value of one’s name…. ……………….