Opinion ID: 610561
Heading Depth: 2
Heading Rank: 3

Heading: Copyright Damages

Text: 46 Under the Copyright Act, the copyright holder may elect between two measures of damages, 17 U.S.C. § 504(a) (1988)--actual damages and profits, id. § 504(b), or statutory damages of between $500 and $20,000 for all infringements ... with respect to any one work, id. § 504(c)(1). The District Court determined that actual damages under section 504(b) were $125,000 and that statutory damages under section 504(c) were $120,000 (apparently $15,000 for infringement of each of eight teleplays). The District Court also found that PIL's profits were $52,108, but declined to add this amount to the award under section 504(b). PIL challenges the amount of both the statutory award and the actual damages award. TPP seeks to uphold the statutory award and cross-appeals to seek an increase in the actual damages, contending that PIL's profits should have been included.
47 Though the parties have disputed on appeal issues relating to both actual and statutory damages, we conclude that TPP's exercise of its right to elect statutory damages against PIL has eliminated from the case all issues concerning actual damages recoverable from PIL. The election available to a plaintiff by section 504(a) is to be made at any time before final judgment is rendered. 17 U.S.C. § 504(c)(1). In this case, TPP made its choice before final judgment, apparently believing that the statutory award of $120,000 was more likely to be sustained on appeal than the actual damages award of $125,000. We do not think the election continues into the appellate stage. Once a plaintiff has elected statutory damages, it has given up the right to seek actual damages and may not renew that right on appeal by cross-appealing to seek an increase in the actual damages. 48 We do not regard Oboler v. Goldin, 714 F.2d 211, 212-13 (2d Cir.1983), as indicating a contrary rule. In that case, the plaintiff had not elected between remedies prior to judgment, id. at 213, and we therefore permitted it, after remand, to make its choice. But even in that situation, we obliged the plaintiff to choose between statutory damages and a new trial on actual damages; we did not permit the plaintiff, after appeal, to pursue both remedies to a conclusion and then select the one that ultimately proved more favorable.
49 1. Number of violations. In calculating statutory damages, the District Court apparently concluded that TPP had violated eight separate copyrights--one for each teleplay--and awarded statutory damages of $15,000 per teleplay, for a total of $120,000. Had the District Court not considered eight separate works to have been infringed, statutory damages would have been limited to $20,000 for a non-willful violation and $100,000 for a willful violation. See 17 U.S.C. § 504(c) (1988). Section 504(c) provides for statutory damages for all infringements involved in the action, with respect to any one work, and further provides that for purposes of this subsection, all the parts of a compilation or derivative work constitute one work. PIL concedes that each teleplay was separately copyrighted, but contends that they constitute a single work under section 504(c). Presumably, PIL's contention would be asserted whether TPP had registered eight teleplays, as the District Court thought, or eight videotapes of episodes, as TPP now asserts. 50 We last considered the appropriate unit for statutory copyright damages in a case decided under the 1909 Act, Robert Stigwood Group Ltd. v. O'Reilly, 530 F.2d 1096 (2d Cir.), cert. denied, 429 U.S. 848, 97 S.Ct. 135, 50 L.Ed.2d 121 (1976) (Stigwood ), which concerned the musical Jesus Christ Superstar. Under the 1909 Act, statutory damages were available for each infringement that was separate. Id. at 1102; see L.A. Westermann Co. v. Dispatch Printing Co., 249 U.S. 100, 105-06, 39 S.Ct. 194, 195-96, 63 L.Ed. 499 (1919). The current statute shifts the unit of damages inquiry from number of infringements to number of works. Stigwood may retain some relevance under the 1976 Act in its recognition that three songs performed in the musical would support separate statutory damages awards, but that three overlapping copyrights on substantial parts of the entire work would support only a single award, Stigwood, 530 F.2d at 1104 (emphasis in original). The three copyrights thought to be overlapping were identified as covering Musical Excerpts Complete Libretto, Libretto, and Vocal Score. Id. 51 The eight teleplays for Twin Peaks represent a current television genre in which one or more plots continue from one episode to another. The style was popularized by the police series Hill Street Blues and is still in vogue in the lawyers series L.A. Law. Twin Peaks carried the style to its limit by keeping the point of the basic plot (Who killed Laura?) continuing throughout the first season of the series, beyond the eight episodes at issue in this litigation. Whatever the scope of the Stigwood ruling concerning overlapping copyrights in related components of a single musical production might be under the 1976 Act, we think it has no application to separately written teleplays prepared to become episodes of a weekly television series. The author of eight scripts for eight television episodes is not limited to one award of statutory damages just because he or she can continue the plot line from one episode to the next and hold the viewers' interest without furnishing a resolution. We might well have a different situation if a book written as a single work was then adapted for television as a group of episodes, for example, the six-part television adaptations of John LeCarre's Tinker, Tailor, Soldier, Spy and Smiley's People. Even in such circumstances, though there would be but one book infringed, there might be separate awards for infringement of each televised episode. In any event, ours is the easy case of infringement of eight separate works that warrants eight statutory awards, whether the registrations apply to the teleplays or the televised episodes. 52 PIL's reliance on Sid & Marty Krofft Television Productions, Inc. v. McDonald's Corp., 221 U.S.P.Q. 114, 1983 Copyright L. Dec. (CCH) p 25,572 (C.D.Cal.1983), is unavailing. Though the plaintiff sought multiple statutory awards for infringement of seven copyrights, the District Court ruled that what the defendant had infringed was the expression of a single idea, the characters and locale; the fact that the characters and the locale appeared in successive television episodes did not warrant multiple awards. Here, by contrast, what has been infringed by the detailed copying of plots are the copyrights in the separately written and copyrighted teleplays or programs. 53 2. Willfulness. With respect to statutory damages, PIL claims that the District Court's finding of willful copyright infringement was clearly erroneous. The result of the finding of willfulness was to increase the maximum amount of statutory damages awardable for each copyright violation from $20,000 to $100,000. See 17 U.S.C. § 504(c)(2). Though the District Court's award of $15,000 for each work infringed is sustainable with or without a finding of willfulness, we feel obliged to review the challenge to the willfulness finding because it may well have influenced both the amount of the award and the appropriateness of awarding attorney's fees. See Universal City Studios, Inc. v. Nintendo Co., 797 F.2d 70, 78 (2d Cir.), cert. denied, 479 U.S. 987, 107 S.Ct. 578, 93 L.Ed.2d 581 (1986). 54 PIL concedes that it knew of the copyrights, and continued publication after receiving a specific warning, but contends that it believed in good faith that its actions were lawful. Much of the evidence of willfulness took the form of disputed accounts of the resolution of previous copyright suits involving PIL. PIL apparently contended in the District Court that this evidence was inadmissible, but has not pursued this claim on appeal. PIL's counsel also testified that he had reviewed the manuscript of the Book and believed that it was fair use, although he had not prepared a written opinion to this effect. TPP developed some of its most damaging evidence through cross-examination of defendant Louis N. Weber, PIL's president. Weber testified that as a book publisher, he hadn't thought about a TV show being copyrighted. The District Court explicitly found this testimony incredible in light of PIL's substantial litigation history and ruled that PIL was happy to go as far as they thought they could to use other's copyrighted material with the view that they could ultimately settle for some minor sanction. 55 We review the District Court's determination of willfulness for clear error, see Fitzgerald Publishing Co. v. Baylor Publishing Co., 807 F.2d 1110, 1115 (2d Cir.1986), with particular deference to determinations regarding witness credibility, see Anderson v. City of Bessemer City, 470 U.S. 564, 575, 105 S.Ct. 1504, 1512, 84 L.Ed.2d 518 (1985). The standard is simply whether the defendant had knowledge that its conduct represented infringement or perhaps recklessly disregarded the possibility. See Fitzgerald Publishing Co., 807 F.2d at 1115. The District Court rejected PIL's alternate contentions that it had not thought of copyright infringement or had thought the work was within the fair use exception. We cannot say that that determination was clear error. 56 3. Apportionment of profits. Though TPP's election of statutory damages against PIL moots all appellate issues concerning the calculation of actual damages and profits with respect to PIL, the appellants' claim that profits should have been apportioned between infringing and non-infringing components of the Book remains viable with respect to the award of profits of defendants Penguin USA, Inc. and Scott Knickelbine. It is true that where an infringer's profits are not entirely due to the infringement, and the evidence suggests some division which may rationally be used as a springboard it is the duty of the court to make some apportionment. Orgel v. Clark Boardman Co., 301 F.2d 119, 121 (2d Cir.), cert. denied, 371 U.S. 817, 83 S.Ct. 31, 9 L.Ed.2d 58 (1962). However, the burden was on PIL to present evidence suggesting a rational division, and we review the decision of the District Court that the defendants did not carry this burden only for clear error. See Business Trends Analysts, Inc. v. Freedonia Group, Inc., 887 F.2d 399, 407 (2d Cir.1989). As in Business Trends Analysts, the District Court could find that the  'heavily infringed' portions were the sections of [the copyrighted works] 'that gave them their value,'  and that the  'infringed portions are so suffused and intertwined with non-infringing portions as to render [an apportionment] impossible.'  887 F.2d at 407 (quoting Business Trends Analysts, Inc. v. Freedonia Group, Inc., 700 F.Supp. 1213, 1241 (S.D.N.Y.1988)).