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Did the artist behind SweetWater's original rainbow trout brand work still hold rights to it at the time of the brewery's deal with Aphria in 2020? Or was that just an inflated fish tale? It's too soon to tell, a fed judge in Georgia ruled last wk, keeping alive a sprawling series of claims against the co, its founder Freddy Bensch, various ownership trusts, Aphria and current owner Tilray. "At the heart of this case," the judge wrote, are "entirely divergent factual accounts" of the agreement between Freddy and artist Scott Fuss in 1996. Now, 30 yrs later, the pair are set to come before Judge Amy Totenberg during a bench trial this summer, when she'll decide which of their accounts appears most "credible." Because "credibility is king" in cases with "completely contradictory testimony," the judge wrote. With complex claims of fraud, breach of contract and various forms of copyright infringement, millions of dollars and other possible legal claims are all on the line. Will the parties now cut bait and settle or risk a big haul before the court?13 Defendants, 13 Counts, $31 Mil or More? How many mils? That's still to be determined. But recall that Fuss initially sought $31 mil when he filed suit in Sep 2021. That's around 1/3 of the $92 mil attributed to SweetWater's intellectual property in the co's $366-mil deal with Aphria (now Tilray) in 2020. At base, Fuss claims that the $500 he got 30 yrs ago allowed SweetWater to use the famed fish-themed artwork, but that the co never owned the full rights to it, so he deserves a cut of the purchase price.But the case morphed and expanded considerably since those early days. He also claims infringement for the brewery's use of the artwork after the deal with Aphria, then use of its new fish logo, which he sez is improperly "derivative" of his work. Before the judge are 13 separate claims (or counts) against combinations of 13 separate defendants. Last wk, she tossed just one of them: a minor claim of breach of fiduciary duty.Who Owned That Ish, Er, Fish? "The parties disagree about virtually every detail related to the creation of the license," Judge Totenberg wrote. Fuss contends that the small initial payment (plus free beer, natch) would have allowed the co to use his work on 2 conditions: that Freddy still owned SweetWater and that the co recognized that Fuss still owned the copyright. But Freddy testified that "I bought the logo, and I bought the fish tap handle and I bought the fishing scene," the 3 pieces of artwork Fuss created at the time. Or, as Freddy told Fuss in a Dec 2020 phone call: "I own that sh*t."But he did not, in fact, "own that sh*t," as the judge spelled out last wk, acknowledging that his lawyers do not currently claim that he did, either. In 2002, as part of a separate trademark case, Freddy signed a notarized agreement acknowledging the artwork was "the copyrighted materials and the property of Ray Scott Fuss." The next yr, a tap handle manufacturer requested "explicit proof" that SweetWater owned the copyright to the tap handle design Fuss created, so the pair signed another agreement transferring ownership of that prototype, but not the at-issue trout banner or fishing scene, over to the brewery. Fuss registered for copyrights of the at-issue art in 2017 and reached out to Freddy to arrange for sale of those rights in 2018. Tho Freddy contended that he "bought those and paid for everything back in 1996," his legal team instead argues that the agreement with Fuss was an "unconditioned, unlimited, irrevocable nonexclusive license" that moots the artist's claims.Side Show: Aphria Purchase Agreement Affirms "Written Agreement" When There Was None The status of SweetWater's ownership of rights to the artwork also implicates aspects of its deal with Aphria. Provisions of the deal documents confirm that the sellers "collectively own or have the rights to use, pursuant to a written, enforceable license agreement," all of the co's key intellectual property, the judge highlighted. Indeed, she cites at length another provision emphasizing the need for a "written agreement."However, as she writes on the first page of her opinion, this case arises in part because the parties "never executed a written contract." Again, Aphria and Tilray are parties to this suit. But the judge's explanation of the case and the factual record built so far appear to contradict affirmations SweetWater made about its IP. Indeed, the co "made no disclosure of Fuss's ownership &mdash; or its own limited rights to the Artwork &mdash; to Aphria during the merger proceedings."Timing of "Midnight" Copyright Filing "Raises Serious Factual Issues" To prove the artist's fraud claims, Fuss has to show that Freddy and co intended to deceive him, a high bar to be sure. But in deciding to move those claims forward, the judge highlights the "midnight filing" of a "duplicative copyright application" for the fish-themed artwork in 2020. The brewery filed to register the art with the US govt on Nov 12 of that yr and received the registration on Nov 25, the day before Thanksgiving and the day the deal with Aphria closed.But 3 days before the co made that filing, the judge reviewed, Fuss texted Freddy to congratulate him on the deal announced a few days prior and "to discuss my holdings of original artwork and the associated copyrights." Freddy replied on the 10th, asking if they could talk after Thanksgiving. Freddy's assertions about owning the copyrights came when the pair finally caught up by phone on Dec 2. No one has tried to explain why the "belated registration" that SweetWater was made at "the precise moment it was necessary for its financial windfall," Judge Totenberg wrote, which "raises serious factual issues" regarding the fraud claims.Derivative Artwork and Damages are Matters of Fact, Too All of these issues turn on disputes of fact, the judge explained again and again, refusing to grant summary judgment to Freddy, SweetWater and the other defendants at this time. That includes issues of whether or not the new logo is derivative of the original artwork and how damages should be calculated. That all matters, perhaps quite a lot.Fuss is trying to prove copyright infringement of his original work between either a) the time of the deal (Nov 2020) or b) the time of a cease & desist sent in May 2021 and the change of logo in April 2024. He also alleges that damages on that infringement should include a portion of sales, not just a flat fee. But if the new logo is deemed "derivative" and too close to the old logo, then he could be entitled to additional damages based on sales "through the present day." And that's one, mighty big fish.

Fuss Went Fishing, But Who's On the Hook? Fed Judge Keeps Hefty Claims vs SweetWater Alive

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