class 17 copyright, winter, 2010 enforcement randal c. picker leffmann professor of commercial law...

Class 17Copyright, Winter, 2010

EnforcementRandal C. PickerLeffmann Professor of Commercial Law

The Law School

The University of Chicago

773.702.0864/[email protected] © 2005-10 Randal C. Picker. All Rights Reserved.

April 19, 2023 Copyright © 2005-10 Randal C. Picker 2

Sec. 501: Infringement of copyright

(a) Anyone who violates any of the exclusive

rights of the copyright owner as provided by sections 106 through 121 or of the author as provided in section 106A(a), or who imports copies or phonorecords into the United States in violation of section 602, is an infringer of the copyright or right of the author, as the case may be.


Sec. 501: Infringement of copyright

(b) (b) The legal or beneficial owner of an

exclusive right under a copyright is entitled, subject to the requirements of section 411 [requiring registration before suit], to institute an action for any infringement of that particular right committed while he or she is the owner of it.

Possible Remedies

Actions to Management the Infringement Sec. 502: Injunctions Sec. 503: Impounding and destroying Sec. 509: Seizure and forfeiture


Possible Remedies

Criminal Sanctions Sec. 506 Title 18, Chapter 113: Stolen Property

18 USC 2319 18 USC 2319A 18 USC 2319B



Sec. 504: Damages

(a) In General. Except as otherwise provided by this title,

an infringer of copyright is liable for either‑‑ (1) the copyright owner’s actual damages

and any additional profits of the infringer, as provided by subsection (b); or

(2) statutory damages, as provided by subsection (c).


Sec. 504: Damages (b) Actual Damages and Profits.

The copyright owner is entitled to recover the actual damages suffered by him or her as a result of the infringement, and any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages. In establishing the infringer’s profits, the copyright owner is required to present proof only of the infringer’s gross revenue, and the infringer is required to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work.


Sec. 504: Damages (c) Statutory Damages.

(1) Except as provided by clause (2) of this subsection, the copyright owner may elect, at any time before final judgment is rendered, to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in the action, with respect to any one work, for which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally, in a sum of not less than $750 or more than $30,000 as the court considers just. For the purposes of this subsection, all the parts of a compilation or derivative work constitute one work.


Sec. 504: Damages

(2) In a case where the copyright owner sustains the burden of proving, and the court finds, that infringement was committed willfully, the court in its discretion may increase the award of statutory damages to a sum of not more than $150,000. In a case where the infringer sustains the burden of proving, and the court finds, that such infringer was not aware and had no reason to believe that his or her acts constituted an infringement of copyright, the court in its discretion may reduce the award of statutory damages to a sum of not less than $200.


Statutory Damages at Work UMG Recordings v. MP3.com (2000 WL 1262568 (SDNY

2000)) “Weighing not only the foregoing factors but all the

other relevant favors put before the Court, the Court concludes, and hereby determines, that the appropriate measure of damages is $25,000 per CD. If defendant is right that there are no more that 4,700 CDs for which plaintiffs qualify for statutory damages, the total award will be approximately $118,000,000; but, of course, it could be considerably more or less depending on the number of qualifying CDs determined at the final phase of the trial scheduled for November of this year.”

Statutory Damages at Work

Capital v. Jammie Thomas-Rasset January 22, 2010 Remittitur Order February 8, 2010 Filing by Plaintiffs Commentary: Feb 9, 2010: ars technica



Davis v. The Gap

Core Facts Davis designs “nonfunctional jewelry worn

over the eyes in the manner of eyeglasses” His Onoculii line of jewelry has been worn

by entertainers


Davis v. The Gap

Pictures of those entertainers wearing the jewelry had appeared in Vogue, Women’s Wear Daily, Fashion Market, In Fashion, The New York Times, The New York Post, and The Village Voice

He was also once paid a $50 fee by Vibe magazine in connection with a picture of Sun Ra wearing the jewelry


Davis v. The Gap

Davis said that he had earned $10,000 from sale of the jewelry

Gap shoots an ad; Gap supplies the clothes; the subjects bring the accessories (jewelry, watches, eyeglasses)


Davis v. The Gap

As to the ad, “[t]he central figure, at the apex of the V formation, is wearing Davis’s highly distinctive Onoculii eyewear; he peers over the metal disks directly into the camera lens”

The ad appears in magazines, including W, Vanity Fair, Spin, Details and Entertainment Weekly, with estimated circulation of 2.5 million


Davis v. The Gap

Davis sees ad; asks Gap whether they want to carry his jewelry; they decline

Davis sues Wants $2.5 million, representing licensing

fees Gap would have paid Some of Gap’s profits $10 million in punitive damages


Davis v. The Gap

What is the violation, if any? If Davis’s copyright has been violated, how

much money should he get?


Applying Sec. 504(b)

Assessing Davis’s Damages Figuring out the markets Jewelry sales: reduction in sales of eye

jewelry? Licensed uses: reduction in fees for use of

the goods in promotion



Who pays whom? Product placement: how much does Coke

pay to be on American Idol? What is the relationship between the 2nd

Circuit’s analysis of lost licensing fees as damages and the approach that the Supreme Court has taken on 107(4) in Campbell and Harper & Row?


From Davis’s Website http://www.djukemusic.com/on.html

“The Onoculii Designs are the world renowned wearable art eyewear designs that have won their place in fashion history. Hand made of brass, silver and gold, these designs continue to excite the fashion world with their incredibly original creation. Famous faces who adorn On’s award winning designs are Thomas Mapfumo, Vernon Reid, Cat Coore, Luther Thomas and Rosario Dawson. On’s creations have accessorized shows for Jean-Paul Gaultier, ROVA (www.rova.tv), Iesha Sekou, Moshood and Queen Bilquiys just to name a few.”


Appling Sec. 504(b)

Assessing Gap’s Profits The Statute

“In establishing the infringer’s profits, the copyright owner is required to present proof only of the infringer’s gross revenue, and the infringer is required to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work.”



Gross Revenues Total revenues for Gap? For eyewear and

accessories? Attributable to the ad campaign?


Interaction of Damages and Profits

Sec. 504(b) “The copyright owner is entitled to recover

the actual damages suffered by him or her as a result of the infringement, and any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages.”

Take a standard case of unlicensed use



Questions Does the copyright owner get the fee that

would have been paid for consensual use of the work and profits attributed to the use?

Or does the consensual license fee already internalize those profits and hence the consensual fee takes those profits into account?



Hypo Evidence in Davis v. The Gap shows

Gap profits with an ad without the jewelry: $1000

Gap profits (exclusive of paying Davis) with an ad with the jewelry: $5000

Davis would have taken $100 as a fee for use of jewelry in ad

Does Davis get $100? $4000? $4100?


Frank v. MGM Core Facts

MGM Grand Hotel puts on a musical review

Ten Acts 100 minutes most nights, 75 minutes on

Sat Kismet: 11 minutes, with six minutes of

songs What violation and why?


Frank v. MGM

Identifying Markets Again Las Vegas market for a full-licensed

production of a revival of the 1953 Broadway musical?

The licensee fee market?


Measuring Profits

Sec. 504(b) Again Revenues less infringer’s proven expenses “Elements of profit attributable to factors

other than the copyrighted work”


Doing the Numbers at the MGM Grand

Finding Profits from the Show Gross Revenues $24,191,690 Cost

Direct $18,060,084 Indirect $3,641,960

Net Profits $2,489,646 Is this what MGM owes Frank?


Three Issues

1. Joint Production and Costs To what extent should we attribute joint

costs—the indirect costs—to this particular show?

2. Joint Production and Profits Suppose show is a loss leader, so that

MGM can make money on gambling How do we calculate profits?


Three Issues

3. Allocating Profits from Mix of Infringing and Non-Infringing Work Pro rata: 100 minutes of show, 11 minutes

of Kismet: 11/100 of the profits? Market test: After dropping Kismet, profits

continued as before, so Kismet didn’t contribute to profits?

class 17 copyright, winter, 2010 enforcement randal c. picker leffmann professor of commercial law...

Documents

infringer of copyright

damagesb actual damages

award of statutory damages

damagesc statutory damages

infringers profits

beneficial owner

additional profits

infringement of copyrightbb