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IP/Entertainment Case Law Updates

Betty, Inc. v. PepsiCo, Inc.

District court grants summary judgment and dismisses ad agency’s copyright infringement and breach of contract lawsuit accusing PepsiCo of copying concepts from rejected pitch for 2016 Super Bowl commercial.  

Plaintiff advertising agency Betty, Inc., brought an action against defendant PepsiCo, Inc., for copyright infringement and breach of contract, claiming that PepsiCo stole ideas from an ad concept that it had previously rejected and then used those ideas in its 2016 Super Bowl halftime commercial. In 2014, PepsiCo’s advertising and marketing subsidiary entered into a three-year creative agency services agreement with Betty, engaging Betty to perform marketing services on a non-exclusive basis. Per the agreement, PepsiCo retained the sole discretion to decide whether to do business with Betty.  

In November 2015, PepsiCo hosted meetings for several advertising agencies, including Betty and The Marketing Arm, to pitch treatments for a commercial that would air before the 2016 Super Bowl halftime show. At its meeting, Betty presented a concept titled “All Kinds/Living Jukebox” that it alleged was later copied by PepsiCo for use as a halftime commercial. Betty’s concept was set in a warehouse. As the camera moved through the warehouse, the musical genre, “fashion” and “vibe” of the room changed.  

That same day, TMA presented a concept titled “The Joy of Dance.” Throughout this concept, the featured character passed through various rooms commemorating decades from the 1950s to the present. As the room changed, the featured character’s wardrobe and dance changed as well. Ultimately, PepsiCo purchased “The Joy of Dance” for its halftime commercial. The final commercial aired on February 7, 2016. After the commercial aired, Betty applied for and was issued a Certificate of Registration for its “All Kinds/Living Jukebox” concept. Betty then filed suit. 

PepsiCo moved for summary judgment on both the infringement and the breach of contract claims.  

As to the infringement claim, since Betty’s ownership of and PepsiCo’s access to the pitch was obvious, the court’s analysis turned on whether the halftime commercial was substantially similar to the protected parts of Betty’s pitch, comparing the overall concept, feel, setting, themes, characters, pace and sequence of both works.  

First, the court found that the overall concepts of the two works were not substantially similar, because Betty’s presentation was much darker in the music, lighting and images presented, whereas the halftime commercial took place in bright rooms and featured upbeat music. Second, for similar reasons, the court also found the settings to be “meaningfully different”: Betty’s concept was set in a dimly lit warehouse, and the PepsiCo commercial was set in a variety of brightly lit rooms and was thematically set to different decades.  

Third, the court compared the themes of both works. The court found that Betty’s theme was either different artists or a single artist singing “the Joy of Pepsi” by way of various musical genres, while the theme of PepsiCo’s commercial was to dance through different eras. Any similarities in changes of “fashion” and “vibe” followed naturally from the concepts’ respective themes – Betty’s theme of “the musical genre” and PepsiCo’s theme of “the decade.” Therefore, the court determined that Betty’s “proposed thematic device [] of changing wardrobe and dance moves to reflect genre [was] not protected.”  

Fourth, the court compared the characters. The court found that Betty’s proposed lone acoustic singer, an Adele-like singer, and doo-wop crew were different from PepsiCo’s one singer/dancer, who performed throughout. The pacing and sequencing of the two works also were different. Though Betty’s concept proposed changing between sets with “clean cuts” and “magician-like outfit changes,” and the PepsiCo commercial also changed with “clean cuts” through doorways, the court held that the “clean cut” change is an unprotectable idea not subject to copyright protection.  

Finally, the court also rejected Betty’s argument that the two works shared a jukebox element on the ground that Betty’s sole reference to a jukebox was in its written concept, whereas PepsiCo actually utilized a jukebox in its commercial. Having concluded that the two works shared no protectable, substantial similarities, the court dismissed the copyright infringement claim against PepsiCo.

Turning to the breach of contract claim, the court found that there was no issue of fact for a jury – the undisputed evidence demonstrated that there was no agreement. Betty had asserted that its pitch constituted a Type II preliminary agreement that PepsiCo later breached. Under New York law, when determining whether a Type II preliminary agreement exists, courts consider the following factors: “(1) whether the intent to be bound is revealed by the language of the agreement; (2) the context of the negotiations; (3) the existence of open terms; (4) partial performance; and (5) the necessity of putting the agreement in final form, as indicated by the customary form of such transactions.”  

Applying the standard to the case, the court found that each factor weighed against Betty. First, the court found there was no intention to be bound – that there was no evidence in the text of the 2014 agreement between Betty and PepsiCo’s advertising and marketing subsidiary that supported such an intention. Second, the context of the negotiations similarly weighed against Betty – 14 other agencies also pitched their concepts. Third, there were several open terms in the 2014 agreement such as engagement date, deliverables and fee that were to be negotiated only if PepsiCo chose to move forward. Fourth, Betty did not partially perform. Finally, given that Betty had dealt with PepsiCo previously, the court concluded that Betty was aware that the final form of an enforceable agreement was not a pitch but rather a scope of work, which was not present respecting Betty’s “All Kinds/Living Jukebox” concept. This knowledge weighed against Betty and its assertion that the pitch constituted a preliminary agreement, given the customary form of Betty’s previous transactions with PepsiCo. Accordingly, the court held that there was no Type II preliminary agreement and dismissed the breach of contract claim. 

Summary prepared by Linna Chen and Lyndsi Allsop