Pepsi Scores Touchdown in Copyright Spat over Super Bowl Spot
Soft drink ads often pair refreshment with a vibrant lifestyle and a lively beat (e.g., Pepsi's 2020, "That's What I Like"). Going back a few years, Pepsi's high-production 2016 Super Bowl halftime commercial, "The Joy of Dance," featured a singer in changing costumes romping through various eras of pop music. Beyond the sheer, carbonated joy of it all, Pepsi faced claims that it had unlawfully incorporated copyrighted material from an advertising agency's rejected pitch into the final ad. But now, apparently, Summer Time Is Pepsi Time , as the soda giant recently prevailed in the suit filed by the advertising agency, Betty, Inc. ("Betty"), when the U.S. Court of Appeals for the Second Circuit affirmed that the theme of changing musical genres arose from non-protected elements such as ideas, scènes à faire, and Pepsi's prior work. (Betty, Inc. v. PepsiCo., Inc., No. 20-891 (2d Cir. May 21, 2021) (summary order)).
The splendor of the Super Bowl goes beyond football: Yes, most fans tune in for the matchup, but many also watch for the commercials, which can be as iconic as the big game. Advertisers spend millions of dollars for a thirty-second slot as a means of building brand awareness and promoting their products and services to a mass audience.
Super Bowl commercials have become a proving ground for the most innovative creative directors in the advertising industry who are all vying to be the mastermind behind the next catchy ad that garners the most posts on social media and plaudits from the ad press. It is only natural for the tensions to be the highest over the rightful ownership of a buzz-creating ad. But when does an advertiser cross the line of copyright infringement in choosing amongst proposals from various ad agencies? The general question to ask is, since copyright does not protect an idea but only the expression of an idea, how much protection does copyright law provide for the overall concept, feel, setting, themes, characters, pace, or sequence of an ad pitch? Should the advertiser be held liable for an aired ad that marginally resembles one of the many pitches it considered? In this instance, no, answered the Second Circuit.
Betty, Inc. was one of fourteen advertising agencies that pitched ideas for Pepsi's 2016 Super Bowl halftime commercial on November 6, 2015. Pepsi and Betty had signed a creative agency service agreement, which, as the court noted, ultimately gave Pepsi the sole discretion to determine whether to do business with Betty. In Betty's "All Kinds/Living Jukebox" proposal, it suggested opening the ad with a man playing a rendition of Pepsi's theme song on an acoustic guitar; as the same song plays on throughout the commercial, the musical genres and physical surroundings would continually shift to more modern styles. Ultimately, Pepsi rejected Betty's idea and decided to go with another agency's pitch that had a similar concept, but with different constituent elements that were more consistent with Pepsi's previous ad campaigns, such as "Now and Then" .
On February 7, 2016, Pepsi's halftime commercial "The Joy of Dance" aired. It featured a performer moving from room to room and dancing to three different songs, each representative of a particular era. In the first room, she bopped to the music from the 1950's. As she entered the second room playing a 1980's tune, her outfit and dance changed to reflect the period. Finally, her costume and moves changed again to echo the 1990's/2000's as she ran through another door to the last room playing Pepsi's theme song before the camera zoomed out into the Pepsi globe.
In its 2016 complaint, Betty brought claims against Pepsi for copyright infringement and breach of contract. The advertising agency argued that the halftime commercial was largely derived from its idea of changing musical styles. However, success on a claim of copyright infringement requires more than the plaintiff's ownership of a valid copyright. As the court explained, there must be 1) a substantial similarity between the two works; and this overlapping material must be 2) protectable under copyright law. To assess substantial similarity, it examined "the total concept and feel, theme, characters, plot, sequence, pace, and setting of the copyright work and the allegedly infringing work," distinguishing between non-protectable elements and protectable elements. Certain similarities that are too abstract or those that necessarily result from a choice of setting (e.g., scènes à faire) are not protectable even if they are part of a copyrighted work. In November 2019, the United States District Court for the Southern District of New York granted summary judgment to Pepsi, finding that the protectable elements in Betty's written proposal for the ad were not substantially similar to Pepsi's "The Joy of Dance" halftime commercial.
On appeal, in May 2021 the Second Circuit affirmed, ruling that the district court correctly determined that the protectable elements of the pitch were not unlawfully copied by the aired commercial. First, the appeals court stated that Pepsi's halftime commercial was substantially different from Betty's pitch. Betty's proposal had no mention of dance, which was the primary focus of the aired commercial. Also, the aired commercial used three different songs from three different eras; conversely, Betty suggested using only one song throughout the entire commercial. In addition, the halftime commercial did not include a warehouse, trashcan fire or an acoustic singer as Betty had laid out in its proposal.
Second, the appeals court rejected Betty's argument that Pepsi had unlawfully copied the general theme of its pitch. The court found that the elements that Betty argued were copied from its pitch were not protectable: "Ideas and themes are often the type of material that we have determined are not copyrightable." In the court's view, "the idea of a single performer moving through various time periods or musical styles with quick cuts and costume changes is not a protectable expression but a creative idea." The court also noted that Betty's theme of changing popular music and fashion across decades is nothing new to Pepsi, noting that the soda-manufacturer's pre-2016 halftime commercials had already employed the same "through the ages" format (including the "Now and Then" ad from 2001).
The Second Circuit also affirmed that Pepsi did not breach the parties' creative agency service agreement. It found that the preliminary agreement signed by the parties was merely an "agreement to agree," under which the intellectual property rights would transfer to Pepsi upon payment to Betty under a future scope of work agreement. As the court stated: "The contract contains no indication that Pepsi was bound to negotiate a scope of work agreement for unproduced ideas." With all material terms being left for a negotiation yet to come – and with Betty clearly knowing that it was only one of many agencies pitching for the Super Bowl advertisement – the court concluded that the ad agency's prior agreement with Pepsi lacked enforceability in this instance. Furthermore, even if there were an enforceable contract, the appeals court noted that there would still be no breach because there is no indication that Pepsi used Betty's material in its aired commercial.
This completes the Second Circuit's instant replay. If the appellate decision stands, it is a touchdown not only for Pepsi, but also its fellow advertisers that often have to consider competing proposals that may have certain basic elements in common, or play off of the advertiser's prior ad campaign themes. The commercials have become an indelible part of the Super Bowl and substantial contributors to the game's allure. They are the digital confetti of the Super Bowl. And it looks like that glitter is not going anywhere anytime soon.