Opinion ID: 6971608
Heading Depth: 3
Heading Rank: 2

Heading: Gross Revenue

Text: The district court found Toseh liable for $2,500 in profit, because Tosch testified that he averaged 15% profit on his work. Tosch admitted to making $16,560 in gross revenue, so the district court awarded Johnson 15% of that sum. Johnson argues, however, that the district court should have awarded him the full $16,560 because Tosch failed to provide any evidence of deductible expenses. Johnson argues that once he met the burden of establishing Tosch’s gross revenue, the burden then shifted to Tosch to prove any expenses to deduct from that amount. We agree. Section 504(b) of the Copyright Act specifically provides that “in establishing the in-fringer’s profits, the copyright owner is required to present proof only of the infringer’s gross revenue, and then the infringer is required to prove his or her deductible expenses.” 17 U.S.C. § 504(b). The statute is clear and unambiguous. So, too, is the record in this case. Toseh provided no evidence of his deductible expenses. Rather, he testified to what his average margin of profit had been for the 40 or 50 jobs he had undertaken in 1994. In addition to controverting the plain and unambiguous language of the statute, awarding only Tosch’s average margin of profit flies in the face of common sense. It is axiomatic that an architect who steals another architect’s drawings and uses them as his own will not incur the same expenses that he would if he were forced to start from scratch. Here, Tosch was able to cut considerable costs, in terms of both effort and expensive delays, by presenting Johnson’s efforts as his own. Very often, the, act of infringement allows the infringer to pocket as net profit a much larger percentage of his gross revenue than he could have absent the infringement. It is for precisely this reason that the Copyright Act shifts the burden of proving deductible expenses to the defendant after the plaintiff has proven gross revenue. Thus, the district court erred in awarding Johnson only $2,500 as a result of Tosch’s infringement. Instead, the district court should have awarded Johnson $16,560, because he met his burden of proving Tosch’s gross revenue.