Table#1: Market Share in U.S. Chocolate Bar Market of Major Chocolate Bar Companies (2020)
Company	Market Share (% of US Market)
Hershey	43.3%
Mars	29.8%
Lindt/Ghirardilli /R. Stove	9.1%
Ferrero*	7.0%
All others	10.8%

*Nestle sold its U.S. chocolate business to Ferrero

To simply matters assume that each chocolate bar company has a single chocolate bar marketed in the USA as noted below:

Table#2: Representative Chocolate Bar Prices (2020)
Company	Name of Chocolate Bar	Price ($ per unit)
Hershey	Hershey’s Chocolate	0.88
Mars	Snickers	1.25
Lindt/Ghirardilli /R. Stove	Dark Chocolate Cacao 90%	4.33
Ferrero	Kinder Chocolate	2.79

In the promotion that is offered for the CD “Rockin’ Shoes,” assume that the number of CDs sent out to customers equals 317,234 and the royalty percentage is 14.5%. Each customer is to put inside an envelope a stamped self-addressed envelope with sufficient postage for a CD plus other content as described below:

Problem

Lindt/Ghurardilli/R.Stove Company is offering a promotion to its customers. Send the company one dollar plus 6 wrappers of any company’s chocolate bar and the company collects $317,234 from its customers.

Based on the precedent of Chappell v Nestle, what level of royalties would a judge, under these circumstances, mandate that the chocolate company pay Chappell? Briefly explain. 

Answer rating: 100% (QA)

Chappell v Nestle is a legal precedent that established the principle that royalties for copyrighted material cannot be based on an items sale price but must be based on the revenue generated from the ... View the full answer