Reference no: EM131721272

Case Scenario: GOLDIE BLOX VS. BEASTIE BOYS: THE TYPE OF FIGHT THAT NO START-UP WANTS TO BE A PART OF

Goldie Blox is a toy company, launched in 2012, that introduces girls to the field of engineering. It was started by Debbie Sterling, an engineering student at Stanford, who was troubled by the lack of women in engineering and the lack of encouragement girls receive to go into math and science fields. "goldie" is a smart young girl that Sterling made up. Each toy in the goldieBlox series consists of a book, featuring goldie, and a set of age-appropriate construction items, such as spools and ribbons. girls play with the toy by helping goldie solve problems by building things. For example, in goldieBlox and the Spinning Machine, a toy in the series, players must help goldie build a belt drive machine to help her dog, nacho, chase his tail. The idea is to introduce girls to the fundamentals of engineering. goldieBlox's toys have been picked up by multiple bigname stores, including Toys"R"Us and Target. In fall 2013, goldieBlox ran an online advertisement for its game "Princess Machine," featuring three young girls singing an altered version of the Beastie Boys 1987 song "girls." The advertisement quickly went viral, attracting over eight million views on youTube.

The ad changed the song's lyrics to promote the notion that girls are capable of ambitious tasks. Some of the original lyrics, "girls do the dishes," "girls to clean up my room," "girls to do the laundry," were replaced with "girls to build a spaceship," "girls to code the new app," "girls to grow up knowing." If you'd like to see the ad, go to youTube and type in goldieBlox and Beastie Boys, and you can pick from one of many videos that replay and comment on the ad. The Beastie Boys, who did not know about the ad until it came out, were not happy. When they objected to goldieBlox's use of their song, claiming copyright infringement, goldieBlox filed a preemptive lawsuit against the Beastie Boys, saying that the company had created a parody of the song, which constituted fair use. Fair use allows for the limited use of copyrighted material for purposes such as parody, criticism, comment, news reporting, and teaching. Consistent with the nature of parody, goldieBlox said that it was trying to make fun of the Beastie Boys song for the purpose of breaking down stereotypes and encouraging young girls to engage in activities that challenge their intellect, particularly in the fields of science, technology, engineering, and math. The Beastie Boys responded by voicing their support for goldieBlox's overall message and efforts, but outlined, in an open letter, their objections to the video.

Their objections were twofold. First, they argued that as creative as the video is, it was made to sell a product. years ago, according to the letter, the group made a conscious decision not to permit its music or name to be used in product sales. Second, the letter referred to the fact that when they simply asked goldieBlox how and why their song "girls" had been used in an ad without their permission, they were sued. goldixBlox responded to the letter by pulling the video and issuing an open letter of their own. The letter said that the video was made with the best of intentions, with the goal of transforming the song "girls" into a powerful anthem for young women. They went on to say that although they believe the video falls under fair use, they would honor the Beastie Boys wishes and no longer use the video. Despite the letter from goldieBlox, in December 2013, the Beastie Boys filed a countersuit against the company, arguing that the video's use of the song didn't constitute fair use as the ad used "the Beastie Boys" musical composition "girl" with lyrics modified to become a "jingle" to sell goldieBlox products. In March 2014, goldieBlox and the Beastie Boys reached a settlement, in favor of the Beastie Boys. The settlement included the issuance of an apology by goldieBlox and a stipulation that goldieBlox would make payments, based on a percentage of its revenue, to one or more charities selected by the Beastie Boys that support science, engineering, and mathematics education for girls. Along with an apology, the company went on to say that in hindsight, they should have reached out to the Beastie Boys to secure the proper rights to the song bore using it in their ad. A follow-up article published by the Guardian reported details of goldieBlox's settlement with the Beastie Boys. Along with the apology, the settlement requires goldieBlox to pay $1 million to one or more charities of the Beastie Boys' choice, based on a percentage of yearly earnings, until the $1 million is paid.

Questions for Critical Thinking

1. If the case hadn't been settled by goldieBlox and the Beastie Boys and you had been asked to render a judgment on the case, would you have rendered a judgment in favor of goldieBlox or the Beastie Boys? Explain your decision.

2. Briefly comment on how both sides handled the dispute.

3. What do we learn about fair use from the goldie Blox Beastie Boys dispute?

4. What do we learn about the process of launching and growing a firm, in general, from the goldieBlox-Beastie Boys dispute?