In the

United States Court of Appeals

For the Seventh Circuit ____________

Nos. 02-2244, 02-2299

STEPHEN L. BUCKLEW,

Plaintiff-Appellee,

Cross-Appellant,

v.

HAWKINS, ASH, BAPTIE & CO., LLP,

and HAB, INC.,

Defendants-Appellants,

Cross-Appellees.

____________

Appeals from the United States District Court

for the Western District of Wisconsin.

No. 01-C-47-S—John C. Shabaz, Judge.

____________

ARGUED APRIL 4, 2003—DECIDED MAY 27, 2003

____________

Before POSNER, EASTERBROOK, and ROVNER, Circuit Judges.

POSNER, Circuit Judge. Stephen Bucklew brought this

suit in a federal district court in Wisconsin against two

affiliated companies that we’ll call “HAB.” The suit charges

copyright infringement, fraud, conversion, and violation

of RICO. The district judge dismissed all but the copyright claim, which was tried to a jury, resulting in a verdict

for Bucklew of $660,000, which the judge cut down to
2 Nos. 02-2244, 02-2299

$395,000. HAB appeals; Bucklew cross-appeals, challenging

the dismissal of his noncopyright claims.

Local housing authorities that want grants from the

federal department of Housing and Urban Development

have to complete forms prescribed by HUD. The forms

require not only specific basic data such as salaries and

other categories of proposed expenditure by the grant

applicant but also simple arithmetical transformations of

the data, such as adding the numbers in particular cells

in the table of basic data. Bucklew developed and copyrighted software, intended to be used in conjunction with

standard spreadsheet applications such as Lotus 1-2-3

and Excel, for doing these transformations and displaying

them in tables. The essential transformation involves

entering the basic data in an electronic copy of the HUDprescribed form and applying to those data an algorithm

that picks out the relevant cells and performs the relevant

operation (namely addition) on them and displays the

results in tabular form. Standard spreadsheet applications

make this transformation relatively easy to program because

they include functions such as DSUM, a simple command

for adding up the numbers in the cells identified by a

criterion specified by the programmer and displaying the

results of the addition. Bucklew does not claim copyright in

either the spreadsheet applications or DSUM. But there is

more, though not a great deal more, to his product than

these programs. Decisions have to be made regarding

choice and size of font, the size of cells and columns, whether and where to use color, the wording of labels and headings (other than those prescribed by the HUD forms), and

whether to use boldface or italics for column headings.

These decisions were made by Bucklew. The ones we

have named all involve the appearance of the forms, but

software that is read only by the computer and not by its
Nos. 02-2244, 02-2299 3

human user is also copyrightable, and Bucklew does claim

copyright in the “construction” as well as display of his

forms; but it is unexplained what he means by this or

whether it has been infringed.

The trial focused on one of the four forms (as the parties

refer to the conversion of a prescribed HUD form into

an electronic form that computes and displays the arithmetic manipulations that HUD requires) copyrighted by

Bucklew that he claimed were copied by HAB. This form

is a transformation of HUD form 52566, which requires

salary data; the other three forms require data for other

categories of expenditure. HAB grudgingly concedes that

the evidence compels an inference that it copied Bucklew’s

form 52566 to create its own form 52566. Some similarities between a copyrighted work and a work alleged to

infringe it are consistent with an inference of independent

creation, and in that case evidence that the alleged infringer

had access to (that is, saw or at least could have seen) the

copyrighted work is indispensable. Ty, Inc. v. GMA Accessories, Inc., 132 F.3d 1167, 1169-70 (7th Cir. 1997). But when

the similarities concern details of such an arbitrary character that the probability that the infringer had duplicated

them independently is remote, an inference of copying

may be drawn without any additional evidence. Id.; Selle v.

Gibb, 741 F.2d 896, 901, 903-05 (7th Cir. 1984); Gaste v.

Kaiserman, 863 F.2d 1061, 1067-68 (2d Cir. 1988); Bouchat v.

Baltimore Ravens, Inc., 241 F.3d 350, 355-56 (4th Cir. 2001).

These cases say that access can be inferred from a sufficiently striking similarity between the two works, and that

is true; but as the Fifth Circuit suggested in Ferguson v.

National Broadcasting Co., 584 F.2d 111, 113 (5th Cir. 1978), it

is more straightforward to say that in some cases proof

of access isn’t required.

It is in order to avoid having to prove access that

mapmakers will sometimes include a fictitious geograph-
4 Nos. 02-2244, 02-2299

ical feature in their maps; if that feature (what is called in

the trade a “copyright trap”) is duplicated in someone

else’s map, the inference of copying is compelling. Rockford

Map Publishers, Inc. v. Directory Service Co. of Colorado, Inc.,

768 F.2d 145, 147 (7th Cir. 1985); Melville B. Nimmer &

David Nimmer, Nimmer on Copyright, vol. 4, § 13.03[C], pp.

13-75 to 13-77 (2002); see also General Drafting Co. v. Andrews, 37 F.2d 54, 56 (2d Cir. 1930) (errors as distinct from

deliberately set traps). And that is the case with regard

to form 52566. Bucklew’s version contains an arbitrary

pattern of boldfacing of cells; HAB’s duplicates it exactly.

Bucklew’s form also contains an “output range,” an intermediate table that he carried over from a previous spreadsheet program but that has no function in his current

program—or in HAB’s. Had HAB written its program

from scratch, it would have had no reason to include

an output range—yet it did. And in another intermediate

table, one that contains the identical data as the form 52566

itself (the starting point for the transformation), HAB’s

version uses the identical headings as Bucklew’s corresponding intermediate table, rather than the headings in

the form 52566 with which HAB had begun. (For unexplained reasons, that form had different headings from

the form from which Bucklew had begun.) And HAB’s

program like Bucklew’s used a font (Swiss font) that was

not available in the version of the Windows operating

system that HAB used to develop its software. This is

further evidence that rather than creating its own form

using the software available to it on Windows, HAB had

copied Bucklew’s form.

The evidence of copying with regard to the other three

forms is scanty. Indeed, they were barely mentioned at

trial. HAB complains that they were smuggled into the

trial and that the jury should not have been permitted to
Nos. 02-2244, 02-2299 5

consider them. Before trial the district judge, in conformity

with his established practice (though we cannot find it

stated in writing in the rules of his court or anywhere

else), explained to the parties that any objections to exhibits,

other than objections based on relevance, had to be made

before trial and any exhibit not objected to before trial

would become a part of the trial record. The exception for

relevance was presumably intended for the situation in

which, because of the course the trial might take, a document that had seemed relevant to the issues in the case

before trial no longer was. HAB did not object before trial

to the introduction into evidence of any of the four forms

of Bucklew’s that were alleged to be infringed. But it argues that it assumed that the forms would be discussed

at trial rather than just being handed to the jury, along

with the other exhibits that had not been ruled inadmissible, when the jury retired to deliberate.

There was no basis for the assumption. Admissible

documents are evidence, just like testimony. They do not

require sponsorship. The procedure followed by the district judge is common and sensible. It saves trial time. The

Federal Rules of Civil Procedure encourage judges to

resolve evidentiary disputes so far as possible before trial

in order to shorten trials and minimize interruptions, Fed.

R. Civ. P. 16, 26(a)(3)—an especially important consideration in jury trials. Evidently Bucklew was content, having established that HAB had copied his form 52566 to

make its form 52566, to let the jury make up its own mind

about the other forms. He testified that he believed his

other three forms had been copied as well, and his expert’s reports, which though hearsay were admitted into

evidence without objection, said the same thing though

without elaboration. Had HAB wanted to challenge the

inference of copying with evidence of its own, there was

nothing to stop it from doing so. Maybe it held back because it thought that the jury would be unlikely to find
6 Nos. 02-2244, 02-2299

infringement of the other three forms when the plaintiff

had presented so little evidence about them and there was

no evidence that HAB had had access to Bucklew’s versions

of those forms, though this is irrelevant because Bucklew’s

claim is that HAB’s versions of those forms were copied

from Bucklew’s form 52566, to which HAB did have access.

In this court, HAB’s principal argument about the admissibility of the three forms is that they confused the jury.

Just as a document that seemed admissible before trial

might be objected to at trial as lacking relevance, so it

might be objected to as confusing because it had not been

the subject of testimony and without testimony could not

be comprehended by a lay person. But there was testimony about the forms—elicited indeed by HAB itself, on

cross-examination—enough to justify the judge in overruling the objection.

HAB remains free to argue that there was a failure of

proof with respect to the three forms. Bucklew, however,

testified without contradiction to certain similarities that

indicated copying (though, to repeat, from Bucklew’s form

52566, not from Bucklew’s versions of the three other

forms), notably a missing vertical line where a line would

otherwise be expected, explicable only as a trace of the deletion of the unneeded output range that HAB had copied

from Bucklew’s form. (A cell to the left of the deleted

area had a box around it; apparently when an HAB programmer deleted material to the right of that cell, he

stripped the box around the cell of its right-hand side

vertical border.) What is true is that there are more differences between HAB’s version of the other three forms and

form 52566, and this may be relevant to infringement, as we

are about to see; but it does not rebut an inference of

copying. To return to the map example, the presence of a

fictitious geographical feature in the alleged infringer’s map
Nos. 02-2244, 02-2299 7

might be conclusive proof of copying even though the

copier had changed the colors or other features of the

map, so that at a glance the two maps appeared quite different.

With respect to all four forms HAB argues that even

if there was copying there was no infringement. It appeals primarily to the copyright doctrines of merger and

scènes à faire. The first of these confusing labels refers to

the situation in which there is only one feasible way of

expressing an idea, so that if the expression were copyrightable it would mean that the idea was copyrightable,

and ideas are not copyrightable. E.g., Ets-Hokin v. Skyy

Spirits, Inc., 225 F.3d 1068, 1082 (9th Cir. 2000); Kregos v.

Associated Press, 937 F.2d 700, 705 (2d Cir. 1991); Kern River

Gas Transmission Co. v. Coastal Corp., 899 F.2d 1458, 1459,

1463-64 (5th Cir. 1990). The standard citation remains

Baker v. Selden, 101 U.S. 99 (1879). Selden had published

(and copyrighted) a book describing a bookkeeping system that he had invented, and he illustrated the book

with blank bookkeeping forms. Baker copied the forms,

rearranging columns and using different headings, and

sold them to people who wanted to use Selden’s system.

This was held not to be copyright infringement, even

though Baker had copied part of a copyrighted work, since

otherwise Selden would have had a monopoly over his

bookkeeping system (which was an idea, and hence not

copyrightable) that he could have exploited by insisting

that anyone wanting to use the system buy the forms

necessary for using it from him. If Bucklew were claiming

copyright in the tabular presentation of the summary data

required by HUD, this case would be governed by Baker v.

Selden. But he is not. He is claiming copyright in tables

configured in an optional way, tables that are the product

of format choices that are not unavoidable, for which in-
8 Nos. 02-2244, 02-2299

deed there were an immense number of alternative combinations any one of which HAB was free to use in lieu of

Bucklew’s. See, e.g., Mason v. Montgomery Data, Inc., 967

F.2d 135, 138-41 (5th Cir. 1992); Kregos v. Associated Press,

supra, 937 F.2d at 706-07.

The fact that Bucklew’s formatting choices do not reflect a high degree of originality is irrelevant. When as in

this case a work in which copyright is claimed is based

on work in the public domain, the only “originality” required for the new work to be copyrightable (the very term

is a misnomer) is enough expressive variation from publicdomain or other existing works to enable the new work

to be readily distinguished from its predecessors. Alfred

Bell & Co. v. Catalda Fine Arts, Inc., 191 F.2d 99, 102-03

(2d Cir. 1951). “Originality in this context means little

more than a prohibition of actual copying.” Id. at 103

(internal quotation marks deleted); Three Boys Music Corp.

v. Bolton, 212 F.3d 477, 489 (9th Cir. 2000). That undemanding requirement is satisfied in this case; any more demanding requirement would be burdensome to enforce and

would involve judges in making aesthetic judgments, which

few judges are competent to make.

The doctrine of scènes à faire (another confusing label,

literally “scenes for action,” which the Oxford English

Dictionary tells us is a theatrical term meaning “the most

important scene in a play or opera, made inevitable by the

action which leads up to it”—which is not the legal doctrine at all) teaches, sensibly enough, that a copyright

owner can’t prove infringement by pointing to features of

his work that are found in the defendant’s work as well but

that are so rudimentary, commonplace, standard, or unavoidable that they do not serve to distinguish one work

within a class of works from another. Reed-Union Corp. v.

Turtle Wax, Inc., 77 F.3d 909, 913-14 (7th Cir. 1996); Atari, Inc.
Nos. 02-2244, 02-2299 9

v. North American Philips Consumer Electronics Corp., 672 F.2d

607, 616-17 (7th Cir. 1982); Williams v. Crichton, 84 F.3d

581, 587-89 (2d Cir. 1996). Every expressive work can be

decomposed into elements not themselves copyrightable—the cars in a car chase, the kiss in a love scene, the

dive bombers in a movie about Pearl Harbor, or for that

matter the letters of the alphabet in any written work. The

presence of such elements obviously does not forfeit

copyright protection of the work as a whole, but infringement cannot be found on the basis of such elements alone;

it is the combination of elements, or particular novel twists

given to them, that supply the minimal originality required for copyright protection.

A more fundamental limitation on the scope of copyright infringement is that copyright protects only expression and not what is expressed, the “idea,” which in the

case of fiction is more likely to be a plot or situation than,

as in Baker v. Selden, an algorithm or other abstraction.

Suppose one wanted to prove that the Tom Hanks-Meg

Ryan movie You’ve Got Mail infringed the Jimmy StewartMargaret Sullavan movie The Shop Around the Corner. You

could point to the fact that in both movies the hero falls in

love with the heroine on the basis of correspondence (letters

in the earlier movie, email in the later) without having met

her and without realizing that it is someone he knows—and

dislikes (and the feeling is reciprocated)—though everything comes right in the end. But it would not be evidence

of infringement that both movies were love stories, or that

they were comedies, or that the lead actors were a man and

a woman. These are generic characteristics, obtained by

abstracting the commonest features of the specific work;

they do not indicate uniqueness. They are at the opposite

extreme from the arbitrary details, such as the pattern of

boldfacing in Bucklew’s form 52566, that contribute such
10 Nos. 02-2244, 02-2299

originality as a new expressive work may have. The format

choices that Bucklew made were not generic. It is not as

if everyone who writes programs of this sort uses Swiss

font or displays an output range or uses a particular pattern

of boldfacing.

Nor is it important that after copying Bucklew’s form

52566 and using it as the template for the other three

forms, HAB introduced a number of variations in its version

of form 52566. Variants that result from tinkering with a

copied form are derivative works from that form, and it

is a copyright infringement to make or sell a derivative

work without a license from the owner of the copyright on

the work from which the derivative work is derived. Pickett

v. Prince, 207 F.3d 402, 405-407 (7th Cir. 2000); Nimmer &

Nimmer, supra, vol. 1, § 3.06, pp. 3-34.24 to 3-34.26; Mark A.

Lemley, “The Economics of Improvement in Intellectual

Property Law,” 75 Tex. L. Rev. 989, 992 (1997). In some cases

a work, though derivative in a literal sense, is so utterly

transformed as to bear no traces of the original; and then

there is no infringement. Castle Rock Entertainment, Inc.

v. Carol Publishing Group, Inc., 150 F.3d 132, 143 n. 9 (2d

Cir. 1998). Such cases are in fact common, though they are

rarely litigated. Suppose one copied a long passage from

a copyrighted work and then edited it to produce a paraphrase so loose that it would not be similar enough to the

original to constitute an infringement. The fact that the

paraphrase had been “derived” in a genetic sense from a

copyrighted original would not make it infringing. Pickett

v. Prince, supra, 207 F.3d at 407 (“works only loosely connected with some ancestral work claimed to be their

original”). Similarly, if the original expression added by the

unauthorized preparer of a derivative work is clearly

detachable from the original work itself, so that no confusion, or disruption of the copyright owner’s plans for
Nos. 02-2244, 02-2299 11

the exploitation of his work, would be created by allowing the unauthorized preparer to copyright his original

expression, the unauthorized preparer might be allowed

to do so, Williams v. Broadus, 60 U.S.P.Q.2d 1051, 1055

(S.D.N.Y. 2001); Paul Goldstein, Copyright, vol. 1, § 2.16,

p. 2:209 and n. 11 (2d ed. 2003), though this principle may

be limited to compilations, where “the infringing portion would be easily severable and the scope of the compilation author’s own work... would be easily ascertainable.” Anderson v. Stallone, 11 U.S.P.Q.2d 1161, 1167-69 (C.D.

Cal. 1989). But HAB does not argue that its alterations of

the copied form went so far as to bring it within the scope

of either of these qualifications of the general rule concerning derivative works.

The analysis to this point sufficiently establishes that

HAB’s version of form 52566 infringed Bucklew’s version.

But that leaves the other three forms, where there are fewer

traces of borrowing from Bucklew’s form. The principal

traces are the captions “input range” and “criteria range,”

the use of “crit1,” “crit2,” etc. to designate specific criteria,

and the designation of each category of data as a “type.”

These are good examples of scènes à faire—standard

expressions, like language itself, without which the wouldbe author of an expressive work would be speechless. The

only other residue of a borrowed-from-Bucklew feature in

the three forms was that telltale missing vertical line—the

tipoff that HAB had indeed copied Bucklew’s form 52566 in

creating its own version of the other three forms and had

then deleted the superfluous output range. But a nonexistent line has no expressive content, except possibly in

the most advanced modern art. (Cf. Georges Perec, La

Disparation (1969)—a 300-page novel written without the

letter e.) The only element of an expressive work that is

infringed by copying is an expressive element; what

remains from the copying in the case of the three forms
12 Nos. 02-2244, 02-2299

under consideration either were scènes à faire or weren’t

expressive elements at all.

So the jury verdict on infringement can stand only with

respect to the first of the four allegedly infringing forms.

This has obvious implications for the damages award,

but before getting to those let us consider HAB’s challenges to that award that are independent of any doubts

about liability. After the judge reduced the jury’s award

by granting a remittitur that Bucklew accepted, the award

consisted of four items: $100,000 for Bucklew’s lost profits;

$125,000 for HAB’s profits from the infringing forms;

$70,000 for a savings in time that HAB obtained as a result of the infringement; and $100,000 for profits obtained

by HAB on separate products by virtue of its being able

to offer its customers “one-stop shopping,” i.e., a complete

line of HUD financial software, including the copied forms.

A copyright owner can sue for his losses or for the infringer’s profits, but not for the sum of the two amounts.

17 U.S.C. § 504(b); Deltak, Inc. v. Advanced Systems, Inc., 767

F.2d 357, 363 (7th Cir. 1985); Taylor v. Meirick, 712 F.2d 1112,

1120 (7th Cir. 1983); Hamil America, Inc. v. GFI, 193 F.3d 92,

108 n. 7 (2d Cir. 1999); Nimmer & Nimmer, supra, vol. 4,

§ 14.01[A], pp. 14-5 to 14-6. That would be double counting.

The profits that HAB obtained from selling forms copied

from Bucklew came at his expense; his loss was HAB’s gain.

If the infringer is a more efficient producer, his gain may

exceed the copyright owner’s loss. If he is not more efficient,

his gain is likely to be less than the copyright owner’s loss

because competition will tend to force price down to cost,

minimizing the infringer’s profits but depriving the copyright owner of the supracompetitive return that he enjoyed before he faced competition from the seller of an

exact substitute for his product. The copyright owner is

allowed to waive damages (lost profits) and sue for the
Nos. 02-2244, 02-2299 13

infringer’s gain. Copyright infringement unlike patent

infringement is an intentional tort, and by forcing the

infringer to disgorge his profit should it exceed the copyright owner’s loss the law discourages infringement

and encourages the would-be infringer to transact with

the copyright owner rather than “steal” the copyrighted

work. Taylor v. Meirick, supra, 712 F.2d at 1120. But there

is no basis in the law for requiring the infringer to give up

more than his gain when it exceeds the copyright owners’ loss. Such a requirement would add a punitive as

distinct from a restitutionary element to copyright damages, and while the copyright statute does authorize

statutory damages unrelated to losses or gains, see 17 U.S.C.

§ 504(c), these were not sought here and—a point to which

we shall return—the statute contains no provision for

punitive damages. But, astonishingly, HAB has failed to

complain about double counting, and so it has booted

away a winning issue.

HAB argues that Bucklew’s lost profits were due not

to the infringement but simply to the fact that HAB was

competing with him. Remember that Bucklew had no

copyright in the database programs that he used (Lotus

and Excel) or in the spreadsheet formula (DSUM) that

transformed the raw data into the data required by HUD.

HAB could have designed its own, noninfringing program

that would have duplicated the essential—and noncopyrighted—features of Bucklew’s. Since it would have been

producing a close substitute, it would have taken sales

from Bucklew, reducing Bucklew’s profits.

The essential distinction at which this argument gestures is between infringer’s profits that are due to the

infringer’s being a more efficient producer than the plaintiff, which the copyright owner can sue for in order to

discourage infringement, and infringer’s profits that are
14 Nos. 02-2244, 02-2299

due to features of his work that do not infringe; those profits belong to him and not the copyright owner. But there

is a difference between an infringer’s adding expressive

features to what he has copied, and a copier who adds

no expressive features but argues that since the copied

work contains mainly public-domain material, damages

should be limited to the perhaps trivial commercial value

attributable to the expressive features that the author of

that work added to the public-domain materials with which

he began. The argued distinction is artificial. The value of

an expressive work is the result of the operation of the

author’s creativity on public-domain materials, ideas,

and so forth; partitioning the two sources of the value,

the public domain and the author’s creative transformation of it, would not be practical. The apportionment

that the law permits is not between the creative and the

derived features of the plaintiff’s work, but between the

infringing and the noninfringing features of the defendant’s work.

Once the plaintiff proves his losses, or the defendant’s

profits, from the defendant’s sale of an infringing work, the

burden shifts to the defendant to apportion the profits

or losses between the infringing and noninfringing features of the defendant’s work. 17 U.S.C. § 504(b); Ty, Inc.

v. Publications Int’l Ltd., 292 F.3d 512, 523-24 (7th Cir.

2002), and cases cited there. HAB failed to do that.

The item of damages for time savings is not duplicative of

the other damages that were awarded, though it was

improper on another ground. The savings are in the time

that HAB takes to service its customers, the local housing

authorities, and do not show up in the profits that HAB

makes from the sale of the infringing products and so the

loss that Bucklew suffered from the infringement. But

HAB argues compellingly that any savings in time could not
Nos. 02-2244, 02-2299 15

have reflected the copyrighted features of Bucklew’s forms,

because those features—the formatting choices—do not

reduce the amount of time that is required to process data,

using the spreadsheets with their built-in DSUM function.

There is an analogy to the principle of “antitrust injury.”

Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 486-

88 (1977); Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S.

328, 337, 339 (1990); Dial A Car, Inc. v. Transportation, Inc., 82

F.3d 484, 486-87 (D.C. Cir. 1996). If two competing firms

merge in violation of antitrust law, but the merger’s effect

on the market price from eliminating competition between

the merging firms is dominated by its effect in reducing

the costs of the firm resulting from the merger below those

of the two predecessor firms, and in consequence the

firm reduces its price below the old competitive price, the

remaining firms in the market will have to lower their

price in order to remain competitive and so they are injured by the merger. But the injury is not actionable; it is

not “antitrust injury” (that is, injury for which antitrust

law provides a remedy) because it is not the sort of injury

that antitrust law is concerned with preventing or remedying. Likewise here, HAB may have obtained cost savings

by copying Bucklew’s form, but insofar as those cost savings reflected not the appropriation of the expressive

features of Bucklew’s form but the appropriation merely of

the idea of using spreadsheet programs with the DSUM

function to expedite the preparation of grant applications

to HUD, they were not the fruit of conduct for which

copyright law is intended to provide a remedy.

What is true, and is the basis of Bucklew’s claim of

conversion, of which more shortly, is that HAB did not buy

Bucklew’s form; it borrowed and, without authorization,

copied it. The unauthorized copying was an infringement,

but the only damages to which it can give rise are the price
16 Nos. 02-2244, 02-2299

of the form, not the value of the ideas in the form because

the ideas are not protected by copyright law.

There was also a failure of proof with regard to the “onestop shopping” damages. HAB argues that damages can

never be obtained that are based on the profits that the

infringer made from the sale of a product that did not

infringe the copyright. That is incorrect. Business Trends

Analysts, Inc. v. Freedonia Group, Inc., 887 F.2d 399, 404, 407

(2d Cir. 1989); Frank Music Corp. v. Metro-Goldwyn-Mayer,

Inc., 772 F.2d 505, 516-17 (9th Cir. 1985). Remember that the

purpose of allowing suit for the infringer’s lost profits is

to make infringement worthless to the infringer. This will

sometimes require tracing those profits into another product, as where it is bundled with the infringing product.

Suppose a defendant had copied a copyrighted book

verbatim and he then offered to sell copies of the book for

nothing to anyone who would pay him $25 for a bookmark

that had cost him 10 cents and had a market value of 50

cents. To hold in such a case that the defendant’s profits

from infringement were zero would approve a formula for

evading copyright law. Cf. Jefferson Parish Hospital District

No. 2 v. Hyde, 466 U.S. 2, 13 n. 19 (1984); United States

v. Microsoft Corp., 253 F.3d 34, 86 (D.C. Cir. 2001) (en

banc) (per curiam); Howard P. Marvel, “The Resale Price

Maintenance Controversy: Beyond The Conventional

Wisdom,”63 Antitrust L.J. 59, 63-64 (1994).

But Bucklew’s evidence that HAB shifted profits from the

infringing forms to a separate, noninfringing financial

software package (“HMS for Windows”) was too speculative to sustain an award of damages. His theory is that the

prospect of one-stop shopping attracted customers who

might otherwise have gone to a competitor, and so increased HAB’s revenue and presumably its profits. One

of HAB’s employees testified that the infringing forms
Nos. 02-2244, 02-2299 17

would indeed help with the sale of HMS for Windows, but

no evidence was presented that would have enabled the

market value of this “help” to be gauged. The testimony by

an expert witness for the plaintiff that 10 percent of the

profits on HAB’s sales of HMS for Windows were due to

the buyers’ being able to buy the infringing forms from

HAB had no factual basis whatsoever, and we repeat

previous reminders to the bench and bar of this circuit

that proof of damages requires—proof. CSC Holdings, Inc.

v. Redisi, 309 F.3d 988, 995 (7th Cir. 2002); MindGames, Inc.

v. Western Publishing Co., 218 F.3d 652, 658 (7th Cir. 2000);

Harbor House Condominium Ass’n v. Massachusetts Bay Ins.

Co., 915 F.2d 316, 318-19 (7th Cir. 1990); see also Hillside

Enterprises v. Carlisle Corp., 69 F.3d 1410, 1414 (8th Cir. 1995).

Besides all these problems with the computation of

damages, it will be necessary on remand to apportion

damages between the infringing form and what we have

determined to be the three noninfringing forms.

The cross-appeal need not detain us for long. Bucklew

seeks punitive damages for fraud and conversion under

Wisconsin law. He argues that HAB obtained a computer

disk containing his copyrighted program by falsely representing that it wanted merely to evaluate the program with

a view toward possibly licensing it from Bucklew, and

having thus obtained the program by false pretenses then

copied it, with the consequences described earlier. We may

assume that this is a good claim under Wisconsin law. But

Bucklew is not asking to have the disk returned, or for

damages equal to the value of the disk plus punitive

damages proportioned to that value. The compensatory

damages that it seeks for the fraud and conversion are

identical to the damages that it seeks for copyright infringement, so that its request for punitive damages is in fact a

request for punitive damages for copyright infringement.
18 Nos. 02-2244, 02-2299

The copyright statute does not authorize such damages,

as we have noted, and the statute’s preemption clause

forbids states to add sanctions for a wrongful act that is

identical to a violation of the statute. See 17 U.S.C. § 301(a);

Baltimore Orioles, Inc. v. Major League Baseball Players Ass’n,

805 F.2d 663, 674, 676-77 (7th Cir. 1986), and with specific

reference to punitive damages Budget Cinema, Inc. v.

Watertower Associates, 81 F.3d 729, 733 (7th Cir. 1996); Hays

v. Sony Corp. of America, 847 F.2d 412, 415 (7th Cir. 1988); On

Davis v. The Gap, Inc., 246 F.3d 152, 172 (2d Cir. 2001);

Nimmer & Nimmer, supra, vol. 4, § 14.02[B], p. 14-28.

The RICO claim is another loser. RICO provides a remedy

against conducting the activities of an enterprise through

a pattern of racketeering activity, and the definition of

racketeering includes criminal copyright infringement. But

apart from whether Bucklew could show that HAB has

engaged in a pattern of such crimes, the RICO claim fails

because the enterprise alleged to have been conducted

through a pattern of racketeering activity (defendant HAB,

Inc.) is a wholly owned subsidiary of the alleged racketeer

(the other defendant, Hawkins, Ash, Baptie & Co.). The

claim is that the parent stole the software and gave it to

the subsidiary to market. A parent and its wholly owned

subsidiaries no more have sufficient distinctness to trigger

RICO liability than to trigger liability for conspiring in

violation of the Sherman Act, see Copperweld Corp. v.

Independence Tube Corp., 467 U.S. 752, 777 (1984), unless the

enterprise’s decision to operate through subsidiaries rather

than divisions somehow facilitated its unlawful activity,

which has not been shown here. Bachman v. Bear, Stearns

& Co., 178 F.3d 930, 932 (7th Cir. 1999); Emery v. American

General Finance, Inc., 134 F.3d 1321, 1324 (7th Cir. 1998);

Fitzgerald v. Chrysler Corp., 116 F.3d 225, 226-28 (7th Cir.

1997); Bessette v. Avco Financial Services, Inc., 230 F.3d 439,
Nos. 02-2244, 02-2299 19

448-49 (1st Cir. 2000); Brannon v. Boatmen’s First National

Bank of Oklahoma, 153 F.3d 1144, 1147-49 (10th Cir. 1998).

To summarize, the judgment on liability is affirmed in

part and reversed in part, and the case is remanded for

a redetermination of the damages to which the plaintiff

is entitled.

AFFIRMED IN PART, REVERSED IN PART,

AND REMANDED.

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—5-27-03