Court Opinion

ID: 1031576
Source: CourtListenerOpinion
Date Created: 2013-07-05 08:34:13.236647+00
Date Added: 2024-06-11T12:44:12.463427
License: Public Domain

UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                              No. 09-1408

DOUGLAS HOFMANN; COURTNEY JENKINS,

                  Plaintiffs – Appellees,

          v.

MARTHA O‟BRIEN, Individually and as Representative of the
Estate of John O‟Brien,

                  Defendant   - Appellant.

Appeal from the United States District Court for the District of
Maryland, at Baltimore.     William D. Quarles, Jr., District
Judge. (1:06-cv-03447-WDQ)

Submitted:     January 27, 2010              Decided:   February 26, 2010

Before NIEMEYER, KING, and AGEE, Circuit Judges.

Affirmed in part, reversed in part, and remanded by unpublished
per curiam opinion.

Bart Garry, LAW OFFICE OF BART GARRY, Baltimore, Maryland, for
Appellant.   Frank K. Friedman, Izak J. Howell, WOODS ROGERS
P.L.C., Roanoke, Virginia; Kenneth M. Berman, BERMAN, SOBIN,
GROSS, FELDMAN & DARBY, LLP, Gaithersburg, Maryland, for
Appellees.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

               In   November     2008,        a     jury     found     Martha     O‟Brien

(“O‟Brien”) liable for copyright infringement arising from her

now-deceased        husband‟s         unauthorized          commercial      use      of    a

photograph      owned    by    Plaintiff          Douglas    Hofmann.        It    awarded

$201,550 in damages to Hofmann.                     The jury also found O‟Brien

liable for conversion of the photograph that had been infringed,

and   in   granting      Hofmann‟s      motion       for    injunctive      relief,       the

district court ordered that O‟Brien return all copies of the

photograph to Hofmann.                Following the jury‟s verdict, O‟Brien

filed a motion for a remittitur or new trial, which was denied

by the district court.            O‟Brien timely appealed, alleging that

the   district       court      erred     in       denying    the      motion     and     in

instructing the jury on damages.                    For the reasons that follow,

we affirm in part, reverse in part, and remand for a new trial

on damages.

               At   trial,      the     evidence       showed       that    Hofmann,       a

well-known painter, had set up a photo shoot with a number of

ballet     students       and     their           teacher     and      taken      numerous

photographs,        including     one    he       titled     “Mary‟s     Class.”          The

photograph ended up in the possession of John O‟Brien, also a

painter,       without    Hofmann‟s       permission.           John       O‟Brien      then

created    a    painting      from     that       photograph,       which    essentially

copied the image in the photograph.                    The testimony also showed

                                              2
that no permission was given or license granted for John O‟Brien

to create a painting or other work from Hofmann‟s photograph, or

for John or his wife to sell or offer for sale a print or

reproduction of the painting.                O‟Brien also acknowledged that

after her husband passed away she had placed an image of the

allegedly       infringing   painting        on    a   website       containing       her

husband‟s work, and that a copy of the painting could be ordered

through the website.

              Hofmann and Aaron Young, Hofmann‟s former agent, both

testified about the harm that resulted from the infringement of

Hofmann‟s photograph.            Hofmann stated that the infringing work

“ruins” his market, and that O‟Brien‟s act of putting copies on

the internet affects the price of both his paintings and his

prints, although he did not provide further details regarding

the specific amount by which the price was affected or clarify

how    this   actually     occurred.         Young     testified         that   “in   our

industry, the worst thing that can happen is that someone starts

to copy your work, because it becomes sort of your trademark.

It‟s what you‟re known for.”                 Young explained that Hofmann‟s

prints    had     been    sold    “for   many      thousands        of    dollars     and

paintings for tens of thousands, maybe even $100,000.”                          He added

that   “when     copies    come    out   and      dealers   .   .    .    are    offered

paintings that are exact copies and all the rest, that‟s the

single worst thing that can happen to an artist.”                        Young further

                                         3
explained that “[i]t undermines everything that an artist has,

and   causes     tremendous      confusion        in     the    marketplace,       which

disrupts the marketplace to the point where [Hofmann‟s] work

stops selling.”

            On   appeal,       O‟Brien   raises         three    challenges      to    the

actual    damages      award    and   one       challenge       regarding    the      jury

instructions      on     damages      given        by     the      district        court.

Specifically, O‟Brien asks this court to determine:

      A.    Whether non-economic compensatory damages and
      general statements of damages are recoverable under
      the Copyright Act of 1976?

      B.   Whether the District Court erred in failing to
      grant a remittitur or a new trial, when economic
      losses   were   at  most  $1550.00,1    and   the   jury
      instructions    did   not   call    for     non-economic
      compensatory damages, while the jury awarded damages
      of $201,550.00?

      C.   If [Hofmann] was not legally entitled to non-
      economic compensatory damages, but [O‟Brien] did not
      object to the jury instruction pertaining to non-
      economic compensatory damages, whether this would
      still constitute plain error?

      D.    Whether      [Hofmann]       proved        economic     damages      of
      $1550.00?

            In   challenging       the   district         court‟s       denial   of    her

motion for remittitur or new trial, O‟Brien argues: (1) that the

$200,000   in    damages       awarded   by      the    jury     were    “non-economic

      1
       Hofmann testified at trial that his out-of-pocket costs to
set up the photo shoot at which the “Mary‟s Class” photograph
was taken totaled $1,550.00.

                                            4
compensatory      damages      for      general    harm        to    the   plaintiff‟s

reputation,” although non-economic damages are not permissible

under the Copyright Act, (2) that even if the damages awarded

can be considered compensatory, the evidence presented was “too

speculative     to    constitute        legal   damages,”       and    (3)   that    the

$1,550 it cost to produce the photo shoot was improperly awarded

because the photo that was produced from the photo shoot was

ordered   returned      by   the     court,     “and    therefore      there   was   no

economic loss.”        O‟Brien also asserts, somewhat contradictorily,

that the general damages jury instruction was not improper and

only permitted economic damages as specified in the Copyright

Act,    and    also     that    as      the     instruction          “pertain[ed]     to

non-economic compensatory damages,” the instruction constituted

plain error by the district court.

              A district court‟s denial of a motion for remittitur

or a new trial is reviewed for abuse of discretion.                        Robinson v.

Equifax Info. Servs., 560 F.3d 235, 242 (4th Cir. 2009).                              “A

district court abuses its discretion by upholding an award of

damages only when „the jury‟s verdict is against the weight of

the    evidence   or    based      on   evidence       which    is    false.‟”       Id.

(quoting Cline v. Wal-Mart Stores, Inc., 144 F.3d 294, 305 (4th

Cir. 1998)).         When reviewing the district court‟s denial of a

motion for a new trial, this court is “permitted to weigh the

                                           5
evidence and consider the credibility of witnesses.”                             Cline,

144 F.3d at 301.

            O‟Brien was awarded actual damages under the damages

provision       of   the    Copyright      Act    of    1976,    which    entitles   a

copyright owner “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.”                        17 U.S.C.

§ 504(b) (2006).            In other words, “the damages awarded under

§ 504(b)    can      be    stated    as   plaintiff‟s     loss    plus    defendant‟s

gain.”      Walker v. Forbes, Inc., 28 F.3d 409, 412 (4th Cir.

1994); see also id. (explaining that “by stripping the infringer

not only of the licensing fee but also of the profit generated

as a result of the use of the infringed item, the law makes

clear that there is no gain to be made from taking someone

else‟s intellectual property without their consent”).

            The statute does not define the term “actual damages,”

and this court has explained that “the experience of copyright

damages has been one of case-by-case assessment of the factors

involved,    rather        than     application    of    hard     and    fast   rules.”

Walker,    28     F.3d     at   412.      However,      general    principles      have

emerged with regard to proving actual damages.                     First, “[c]ourts

and commentators agree [§ 504(b)] should be broadly construed to

favor victims of infringement.”                   On Davis v. The Gap, Inc.,

                                            6
246 F.3d 152, 164 (2d Cir. 2001).                As a result, depending on the

nature of the work and the infringement, courts have established

a variety of tests for determining the amount of actual damages

necessary to compensate a copyright owner for the infringement.

Where    “a     copier    of     protected       work,       instead    of    obtaining

permission and paying the fee, proceeds without permission and

without compensating the owner,” the owner “has suffered damages

to the extent of the infringer‟s taking without paying what the

owner was legally entitled to exact a fee for.”                        Id. at 165.      In

other   words,     once    a     copyright      has    been     infringed,      the    law

permits recovery of the fair market value of the licensing fee

that    would    have     been    charged       for    the     item    that   has     been

infringed.       Id. at 166; see also Jarvis v. K2 Inc., 486 F.3d

526, 533 (9th Cir. 2007) (holding that “in situations where the

infringer     could      have    bargained      with     the    copyright      owner    to

purchase the right to use the work, actual damages are „what a

willing buyer would have been reasonably required to pay to a

willing seller for plaintiffs‟ work‟” (quoting Frank Music Corp.

v.   Metro-Goldwyn-Mayer,          Inc.,     772      F.2d     505,    512    (9th    Cir.

1985))).

              Courts also permit recovery of actual damages based on

a calculation of lost sales by the copyright owner.                           See Polar

Bear Prods., Inc. v. Timex Corp., 384 F.3d 700, 708 (9th Cir.

2004) (“„Actual damages are usually determined by the loss in

                                            7
the fair market value of the copyright, measured by the profits

lost due to the infringement or by the value of the use of the

copyrighted         work     to     the       infringer.‟”         (quoting        McRoberts

Software, Inc. v. Media 100, Inc., 329 F.3d 557, 566 (7th Cir.

2003))); Data Gen. Corp. v. Grumman Sys. Support Corp., 36 F.3d

1147,      1170     (1st    Cir.    1994)       (“Actual        damages    are     generally

calculated with reference to the loss in the fair market value

of the copyright, often measured by the profits lost as a result

of   the    infringement.”).              The   plaintiff        bears     the   burden   of

proving that his loss of revenue was due to the infringement.

See Data Gen. Corp., 36 F.3d at 1170.

                 Further,    while      the     nature      of    actual     damages      may

require a court to “engage in some degree of speculation,” id.

(quoting Stevens Linen Assocs., Inc. v. Mastercraft Corp., 656

F.2d 11, 14 (2d Cir. 1981)), “the amount of damages may not be

based      on    „undue     speculation.‟”            On    Davis,   246    F.3d     at   166

(quoting Abeshouse v. Ultragraphics, Inc., 754 F.2d 467, 470 (2d

Cir. 1985)); see also Jarvis, 486 F.3d at 534 (explaining that

“[e]xcessively         speculative          claims         of    damages     are     to    be

rejected”).         Accordingly, “[a] plaintiff seeking actual damages

must prove the existence of a causal connection between the

alleged         infringement      and   some        loss   of    anticipated       revenue.”

Thoroughbred Software Int‟l, Inc. v. Dice Corp., 488 F.3d 352,

358 (6th Cir. 2007) (internal quotation marks and alterations

                                                8
omitted); see also Polar Bear Prods., Inc., 384 F.3d at 708

(explaining        that    there    must    be     a    “causal       link     between    the

infringement and the monetary remedy sought”); cf. Harper & Row

Publishers, Inc. v. Nation Enters., 471 U.S. 539, 566-68 (1985)

(noting that in the context of fair use, a copyright holder must

establish “with reasonable probability the existence of a causal

connection between the infringement and a loss of revenue”).

Thus, although a copyright owner “may seek compensation for both

direct   and       „indirect‟      losses,”       such    as    enhanced        good   will,

market recognition, and reputation, those claimed losses must be

supported by the evidence and not be unduly speculative.                                 Data

Gen. Corp., 36 F.3d at 1171.                General claims of “hurt feelings”

or an owner‟s “personal objections to the manipulation of his

artwork”    must      not    enter    the     calculus.              Mackie    v.   Rieser,

296 F.3d 909, 917 (9th Cir. 2002).

            O‟Brien         asserts   that       the     district      court     erred    in

denying her motion for remittitur or new trial because the court

permitted      a     jury     award    of        $200,000       that     was     based    on

non-economic damages, that even if the damages were economic

damages they were too speculative, and that, as there was no

economic    loss     for     the   photograph          once    the    court     ordered   it

returned, the $1,550 award also was improper.                           As to O‟Brien‟s

first argument, we conclude that the record fails to confirm

that $200,000 of the jury‟s total award reflected compensation

                                             9
for non-economic damages suffered by Hofmann.                        In fact, because

there was no breakdown of the damages award, it is not at all

clear how the jury apportioned the total award, and whether it

believed it could or in fact did award non-economic damages, or

solely economic damages.              However, as discussed below, the jury

instructions were clear that only economic damages were to be

awarded and, absent evidence to the contrary, we have no reason

to   conclude     that    the    jury    did     not   faithfully      deliberate     as

instructed.

            As    to   O‟Brien‟s        second    argument,      however,     we    agree

that even assuming all damages awarded by the jury were properly

intended to compensate Hofmann for economic injuries, there was

insufficient evidence to support the jury‟s award.                       Accordingly,

we are compelled to conclude that the district court erred in

denying O‟Brien‟s motion.

            At trial the testimony showed that there could have

been   economic     damages      to    Hofmann     for    a    variety   of   reasons,

including    that      flooding    the     market      with    infringing     works    by

O‟Brien adversely impacted the market for Hofmann‟s work, that

Hofmann    was    prevented      from    painting        his   own   works    from    the

photographic image in question because it had been taken from

him, and that Hofmann suffered damage to his reputation as an

artist    based   on     the    presence    of    O‟Brien‟s      infringing        works.

However, although Hofmann is competent to testify regarding the

                                           10
injury or destruction in value to the copyright by the O‟Briens‟

actions, he failed to present any reliable evidence upon which

an award of economic damages could be permissibly based.                               See

Fitzgerald    Publ‟g    Co.     v.    Baylor    Publ‟g      Co.,    807    F.2d   1110,

1118-19 (2d Cir. 1986).              Instead, Hofmann made general claims

about the harm he suffered and the damage to the market for his

paintings resulting from O‟Brien‟s act of putting copies on the

internet, summarily stating that it affected the price of his

paintings and his prints.            Without further details regarding the

specific   amount by which the price was affected or                           evidence

demonstrating     a    causal       link    between   the     infringing        O‟Brien

painting and any damage to the price of Hofmann‟s works, this

conclusory    testimony       was    insufficient      to    support      the     jury‟s

damage award.         See, e.g., Mary Ellen Enters., Inc. v. Camex,

Inc., 68 F.3d 1065, 1070 (8th Cir. 1995) (finding the plaintiff

had demonstrated damage to the copyright by presenting evidence

that showed a decrease in value of the copyrighted book after

the infringement and providing specific figures to support that

testimony).

             Further,    the    only       evidence   regarding      the       value   of

Hofmann‟s work came from Young, who stated that Hofmann‟s prints

had sold “for many thousands of dollars and paintings for tens

of   thousands,   maybe    even       $100,000.”       There       was    no   evidence

regarding what prints or paintings made from the “Mary‟s Class”

                                           11
photograph would have been worth or how much Hofmann might have

lost in sales by being unable to make prints and paintings from

that photograph.        Hofmann also did not present any evidence

regarding a possible license fee, or what the fair market value

would have been for O‟Brien to obtain and use the photograph at

issue.      See, e.g., Abend v. MCA, Inc., 863 F.2d 1465, 1479

(9th Cir.    1988)   (noting   that    the   district    court    could    have

calculated    damages    “caused      to   the    fair   market    value    of

plaintiff‟s story by the re-release” of an infringing film, and

that “[a]ny impairment of [the plaintiff‟s] ability to produce

new derivative works based on the story would be reflected in

the calculation of the damage to the fair market value of the

story”), aff‟d, 495 U.S. 207 (1990).             In fact, in Hofmann‟s own

appellate brief, when posing the question of “[w]hat . . . a

willing buyer [would] have been reasonably required to pay to

Hofmann for Hofmann‟s photo,” he simply answers, “a great deal.”

Although some speculation is permissible when awarding damages

under § 504(b), the award here was based on undue speculation

and is simply not adequately supported by the evidence presented

at trial.     Accordingly, we reverse the district court‟s denial

of the motion for remittitur or new trial, and remand for a new

trial on damages.2

     2
       Although O‟Brien now challenges the award of $1,550 in
(Continued)
                                      12
             O‟Brien also argues, despite conceding that the jury

instructions on damages were proper and not objecting to the

instructions at trial, that the instructions could be improperly

construed to permit non-economic damages.                  Under Rule 51(d)(2)

of the Federal Rules of Civil Procedure, “[a] court may consider

a plain error in the instructions that has not been preserved as

required     by   Rule   51(d)(1)   if     the     error   affects   substantial

rights.”     Accordingly, “[t]his court has held that the approach

set out by the Supreme Court in [United States v. Olano, 507

U.S.   725   (1993)],     should    also      be   applied   in   civil   cases.”

Brickwood Contractors, Inc. v. Datanet Eng‟g, Inc., 369 F.3d

385, 396 (4th Cir. 2004); see also Corti v. Storage Tech. Corp.,

304 F.3d 336, 341 (4th Cir. 2002) (“Before we can exercise our

discretion to correct an error not raised below in a civil case,

at a minimum, the requirements of [Olano] must be satisfied.”).

damages in addition to the $200,000, she failed to challenge
this portion of the award in her motion for remittitur, and in
fact conceded that this amount was “justified.”          However,
because we are remanding for a new trial on damages, the entire
damages award should be re-calculated.     As to O‟Brien‟s claim
that this amount does not represent an economic loss because the
district court ordered a return of the photograph produced from
the photo shoot, which Hofmann testified would have cost him
$1,550, the conversion claim and copyright claim represent
separate injuries and therefore provide for separate remedies.
Accordingly, on remand, Hofmann may again present evidence of
any economic loss resulting from the copyright infringement as
it pertains to the photo shoot that produced the photograph.

                                         13
Under    the    standard   established    in   Olano,   “there    must     be    an

error, that error must be plain, and the error must affect the

appellant's substantial rights.”            Brickwood Contractors, Inc.,

369 F.3d at 396.           Moreover, “[e]ven if these requirements are

met, this court is not required to correct the error.”                          Id.

Rather, we may exercise our discretion “to correct the error

only if we can conclude, „after examining the particulars of the

case, that the error seriously affects the fairness, integrity

or public reputation of judicial proceedings.‟”                   Id.      at 397

(quoting Taylor v. Va. Union Univ., 193 F.3d 219, 240 (4th Cir.

1999), abrogated in part on other grounds by Desert Palace, Inc.

v. Costa, 539 U.S. 90 (2003)).

               The   district   court‟s     instructions     to      the      jury

regarding damages were not erroneous, let alone plainly so.                      In

its general damages instruction, the court made clear that the

jury could only consider “Plaintiff‟s direct economic losses and

out-of-pocket        expenses   resulting      from   the   effect       of     the

Defendant‟s infringement of the copyright.”3                The court also

     3
         The full instruction stated:

     Court‟s Instruction No. 8

     General Damages Instruction

          If you find for the plaintiff on the plaintiff‟s
     copyright infringement claim, you must determine the
     plaintiff‟s damages.

(Continued)
                                     14
correctly explained the ways in which the jury could calculate

actual damages, stating:

      Actual damages means the amount of money adequate to
      compensate the copyright owner for the reduction of
      the fair market value of the copyrighted work caused
      by the infringement. The reduction of the fair market
      value of a copyrighted work is the amount a willing
      buyer would have been reasonably required to pay a
      willing seller at the time of the infringement for the
      actual use made by the Defendant in the Plaintiff‟s
      work.   That amount could also be represented by the
      lost license fees the Plaintiff would have received
      for   the   Defendant‟s   unauthorized  use   of   the
      Plaintiff‟s work.

The   fact   that   the   court    called       these   damages   “compensatory

damages” in the general damages instruction and “actual damages”

in    another   instruction       does        not   constitute    plain   error.

Although 17 U.S.C. § 504(b) refers only to “actual damages,”

“compensatory damages” is a sufficiently comparable term that

           Compensatory damages consist of the plaintiff‟s
      direct economic losses and out-of-pocket expenses
      resulting   from  the   effect   of  the   defendant‟s
      infringement of the copyright.       In other words,
      compensatory damages means the amount of money that
      will reasonably and fairly compensate the plaintiff
      for any injury you find was caused by the defendant‟s
      infringement.      The   basic   question   for   your
      consideration is: What is the amount of money required
      to right the wrong done to the plaintiff by the
      defendant?

           The plaintiff has the burden of proving damages
      by a preponderance of the evidence.

                                         15
conveys the same meaning.4             Moreover, the explanation given to

the jury for compensatory damages permits only what is allowable

under § 504(b); therefore, it cannot be said that there was any

adverse   impact     on   O‟Brien‟s     rights    as   a    result   of    the   jury

instructions.

            Accordingly, we affirm in part, reverse in part, and

remand    for   a   new   trial   on   damages.        We   dispense      with   oral

argument because the facts and legal contentions are adequately

presented in the materials before the court and argument would

not aid the decisional process.

                                                               AFFIRMED IN PART,
                                                               REVERSED IN PART,
                                                                    AND REMANDED

     4
       According to Black‟s Law Dictionary 445 (9th ed. 2009),
“compensatory damages” are “[d]amages sufficient in amount to
indemnify the injured person for the loss suffered.”        The
definition also refers to the entry for “actual damages,”
defined as “[a]n amount awarded to a complainant to compensate
for a proven injury or loss; damages that repay actual losses.”
Id.   This definition adds that actual damages are also termed
“compensatory damages,” “tangible damages,” or “real damages.”
Id.

                                        16