In 1996, after almost a decade of searching, Intersal, Inc. (“Intersal”), a marine research and recovery company, discovered the storied Queen Anne’s Revenge (“QAR”), flagship of the notorious pirate Blackbeard, off the coast of North Carolina. The vessel reportedly sank near Beaufort Inlet in 1718, and it has been the stuff of legend since. Although no treasure chests of gold were found in the debris, historical relics have been recovered from the QAR, and the rights to make images, replicas, and narratives about the relics have amounted to another form of treasure. Persistent disputes over the division of these rights have led to this litigation.
On 1 September 1998, Intersal, DNCR, an executive agency of the State of North Carolina and a non-party, the Maritime Research Institute (“MRI”), entered into an agreement regarding the QAR and any resulting projects (the “1998 Agreement”). As a result of the 1998 Agreement, Intersal relinquished its right to receive 75% of the coins and precious metals recovered from the QAR in exchange for promotion opportunities arising from the QAR “Project,” as well as for assurances from DNCR that the El Salvador Permit would be renewed except for just cause.
Plaintiff, Intersal sought damages for the Defendant, Wilson’s alleged breaches of Section 16(b) of the 2013 Settlement Agreement. Defendant Wilson serves as the Secretary of DNCR.
Defendants retained Deborah Gerhardt, a professor of intellectual property law at the University of North Carolina—Chapel Hill School of Law. Gerhardt produced a report in which she answered four questions posed by Defendants’ counsel:
- Did the law permit someone to own rights in a narrative, such as the story about salvaging Blackbeard’s ship? If so, did intellectual property law give Intersal the exclusive right to commercial or noncommercial narratives about the QAR project even if such narratives were created by independent third parties?
- Did the 2013 Agreement give Intersal the exclusive right to commercial or noncommercial narratives about the QAR project? Specifically, did the 2013 Agreement prevent third parties from publishing content they created or obtained from lawful sources?
- Did the DNCR place Intersal’s intellectual property in the public domain?
- Did Intersal have an ownership interest in QAR photos taken by DNCR?
In her thirteen-page report, Professor Gerhardt opined that (1) intellectual property law did not provide any foundation for Intersal to claim exclusive rights in the narrative (commercial or not) of salvaging the Queen Anne’s Revenge (“QAR”); (2) the Court should not have enforced any provision in a way that gave Intersal the exclusive right to telling the story of the QAR salvage as such an interpretation would have violated constitutional and federal public policy; (3) DNCR did not place any of Intersal’s intellectual property in the public domain because Intersal had failed to identify any protectable intellectual property; and (4) Intersal did not have an ownership interest in QAR photos taken by DNCR because no express written copyright assignment existed.
Plaintiff filed a motion to exclude expert opinions from Deborah R. Gerhardt arguing they constituted inadmissible jury instructions and her own interpretation of the 2013 Agreement.
Intellectual Property Expert Witness
Deborah R. Gerhardt is a distinguished member of the Carolina Law faculty, having joined in 2009 and currently holding the position of Reef C. Ivey II Excellence Fund Term Professor of Law. Her expertise lies in intellectual property law, with a particular focus on the intersection of law and creativity. Gerhardt’s teaching portfolio includes courses such as Arts Entrepreneurship, Art Law, Copyright Law, Intellectual Property Law, and Trademark Law. Recognized for her excellence in teaching, she received UNC’s Distinguished Teaching Award for Post-Baccalaureate Instruction in 2018. Gerhardt is also a prolific writer, having authored numerous influential essays and articles covering topics such as copyright, trademark, entrepreneurship, and art law.
Discussion by the Court
Gerhardt admitted that her report reflected her legal opinions and conclusions regarding intellectual property law and her interpretation of the 2013 Agreement. Defendants contended that Professor Gerhardt’s testimony would assist the jury in understanding the facts. Defendants further asserted that Professor Gerhardt should be permitted to explain the difference between “commercial” and “non-commercial” because it was a technical term.
The Court disagreed with Defendants noting that Gerhardt’s report was tantamount to a well-written legal memorandum on intellectual property law based on Gerhardt’s admission that her testimony would assist the jury in understanding the law, not the facts. It was after all the Court’s duty to ensure that the jury was appropriately instructed on the law with respect to the issues in this case.
The Court observed that as far as the distinction between “commercial” and “non-commercial” was concerned, Gerhardt is an expert in the law, but she has not established herself as an expert in the publication of digital images such that she would be qualified to define a term of art in that arena. Moreover, nowhere in her report did Gerhardt actually offer a definition of “commercial” or “non-commercial.” Instead, she opined that use of the word “commercial” in the 2013 Agreement was “atypical.”
Gerhardt did not directly address whether the hypothetical licensing model used by the Plaintiff’s expert was the correct approach as far as the case was concerned. Instead, Professor Gerhardt explained that because Intersal did not own the copyright to Defendants’ images, under copyright law, it would not be entitled to a licensing fee for their use.
Gerhardt was found to misunderstand Intersal’s position. Intersal freely admitted it did not own the copyright to Defendants’ images and did not seek a license fee on that basis. Intersal’s claim focused on the value it allegedly lost when Defendants made the images publicly accessible without watermarks, time stamps, and weblinks. The Plaintiff’s expert used a lost licensing fee as a proxy to calculate the damages Intersal claimed to have suffered by not being able to publish its own images or to otherwise monetize third-party access to the site and its artifacts. Gerhardt’s proposed testimony did not address whether this use of a license fee was acceptable in the field of media rights, nor was her expertise in copyright law of any relevance in this regard.
Because Gerhardt’s report was a treatise on copyright law, the Court agreed that it would confuse and mislead the jury when the Plaintiff demanded exclusion of the same under Rule 403.
Held
The Court granted the Plaintiff’s motion to exclude expert opinions from Defendant’s expert Deborah R. Gerhardt.
Key Takeaways:
Key takeaways regarding expert testimony include ensuring relevance and expertise, understanding the role of the expert, and distinguishing between matters of law and fact. Experts should provide clear, precise opinions directly related to the case, supported by evidence and reasoning understandable to the jury. They should avoid confusing or misleading the jury and address opposing arguments while ensuring their expertise is directly applicable to the case. Courts may exclude expert testimony if its probative value is outweighed by the risk of confusion or prejudice under Rule 403. Therefore, it’s crucial for experts to provide testimony that is relevant, clear, and appropriately limited in scope to assist the trier of fact in understanding complex issues without unduly influencing their judgment.
Case Details:
| Case Caption: | Intersal, Inc. v. Wilson |
| Docket Number: | 15 CVS 9995 |
| Court: | North Carolina Superior Court, Wake County |
| Citation: | 2024 NCBC LEXIS 19 |
| Order Date: | February 2, 2024 |
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