Court Opinion

ID: 8903475
Source: CourtListenerOpinion
Date Created: 2022-11-27 01:28:58.136492+00
Date Added: 2024-06-11T17:08:00.246214
License: Public Domain

JAMES M. CARTER, Circuit Judge,
concurring and dissenting.
I concur in that portion of Judge Sneed’s Opinion dealing with statutory “in lieu” damages. However, I am convinced that the Copyright Act contemplates cumulative recovery of both damages and profits, and therefore dissent from that portion of the Majority Opinion dealing with this issue.
The statutory language of Section 101(b) provides for recovery of “such damages as the copyright proprietor may have suffered due to the infringement, as well as all the profits which the infringer shall have made from such infringement . . . .” Thus, the statute itself provides for cumulative recovery of both damages and profits. However, considerable confusion was engendered by the House Report on the 1909 Act which indicated that recovery was to be in the alternative, as under the Patent Law.1 This led Courts in several early decisions to rule that recovery was either of damages or profits. See Sheldon v. Metro-Goldwyn Pictures Corp., 309 U.S. 390, 400-01, 60 S.Ct. 681, 84 L.Ed. 825 (1940); Gordon v. Weir, 111 F.Supp. 117, 123 (E.D.Mich. 1953), aff’d, 216 F.2d 508 (6 Cir. 1954); Lundberg v. Welles, 93 F.Supp. 359, 361 (S.D.N.Y.1950); Orgel v. Clark Boardman Co., Ltd., 128 U.S.P.Q. 531, 532 (S.D.N.Y. 1960), modified, 301 F.2d 119 (2 Cir. 1962). See generally Note, Monetary Recovery for Copyright Infringement, 67 Harv.L.Rev. 1044, 1051 (1954). This court adopted the alternative recovery rule in the early case of Universal Pictures Co. v. Harold Lloyd Corp., supra, 162 F.2d at 376, which the *1180majority believes still controls. More recent decisions have without exception favored cumulative recovery, however. See F. W. Woolworth Co. v. Contemporary Arts, Inc., 344 U.S. 228, 233, 73 S.Ct. 222, 97 L.Ed. 276 (1952); Thomas Wilson & Co. v. Irving J. Dorfman Co., 433 F.2d 409, 413 (2 Cir. 1970); Alouf v. Expansion Products, Inc., 417 F.2d 767, 768 (2 Cir. 1969); Peter Pan Fabrics, Inc. v. Jobela Fabrics, Inc., 329 F.2d 194, 196 (2 Cir. 1964); Baldwin Cooke Co. v. Keith Clark, Inc., 420 F.Supp. 404, 405-06 (N.D.Ill.1976); L. L. White Metal Casting Corp. v. Joseph, supra, 387 F.Supp. at 1357; Fedtro, Inc. v. Kravex Manufacturing Corp., 313 F.Supp. 990, 995 (E.D.N.Y. 1970); Ziegelheim v. Flohr, 119 F.Supp. 324, 329 (E.D.N.Y.1954); Trebonik v. Grossman Music Corp., 163 U.S.P.Q. 352, 361-62 (N.D.Ohio 1969); Gelles-Widmer Co. v. Milton Bradley Co., 132 U.S.P.Q. 30, 35 (N.D.Ill. 1961), aff’d, 313 F.2d 143 (7 Cir. 1963).2
In the Woolworth case the lower court had awarded statutory “in lieu” damages and attorneys’ fees for infringement of a statute. The Supreme Court found that there had been an adequate showing of profits by the infringer to enable assessment of that liability. “As to the other ingredient in computing liability, damages suffered by the copyright proprietor, the record is inadequate to establish an actually sustained amount.” 344 U.S. at 230, 73 S.Ct. at 224. Nonetheless, the Court approved the “in lieu” damages award because cumulative recovery is provided by the Copyright Act. Thus the Court stated:
“[A] rule of liability which merely takes away profits from an infringement would offer little discouragement to infringers. It would fall short of an effective sanction for enforcement of the copyright policy. The statutory rule, formulated after long experience, not merely compels restitution of profit and reparation for injury but also is designed to discourage wrongful conduct.” 344 U.S. at 233, 73 S.Ct. at 225.
The majority argues that Woolworth should not be viewed as controlling precedent in this case because it did not specifically deal with the issue of cumulative or alternative recovery. But the above-quoted language indicates that the Court believed that recovery of more than just profit is necessary. While in that case, damages could not be ascertained so that “in lieu” damages were appropriate, the conclusion is inescapable that where damages can be ascertained, they must be awarded in addition to profits in order to obtain the deterrent effect sought by the Court. As the Supreme Court recognized, the damage provision of the Copyright Act aims at more than just compensation of the copyright owner. It also served to prevent unjust enrichment by the infringer and to deter infringement. I agree with the Second Circuit that fulfillment of these purposes requires cumulative recovery. See Thomas Wilson & Co. v. Irving J. Dorfman Co., supra, 433 F.2d at 413-14; Peter Pan Fabrics, Inc. v. Jobela Fabrics, Inc., supra, 329 F.2d at 196. It follows that plaintiffs in this case should be entitled to recover both damages and profits, if the latter can be proven.
Universal Pictures Co. v. Harold Lloyd Corp., supra, was decided before the Woolworth case. It relied, instead, on Sheldon v. Metro Goldwyn Pictures Corp., 309 U.S. 390, 400, 60 S.Ct. 681, 84 L.Ed. 825 (1940) and Underwood Typewriter Co. v. E. C. Stearns & Co., 227 F. 74, 82 (2 Cir. 1915). This Court has already concluded that the Sheldon case was superseded by Woolworth. As the Court said in Shapiro, Bernstein & Co. v. 4636 S. Vermont Ave., Inc., 367 F.2d 236, 240 (9 Cir. 1966):
*1181“The Sheldon case did make reference to and relied upon a report of the House Committee on the Copyright Act (309 U.S. at 400, 60 S.Ct. 681), which said that where both profits and damages had been ascertained the court could award the greater amount but not both. But that statement was superseded by the majority opinion in F. W. Woolworth Co. v. Contemporary Acts, 344 U.S. 228, 234, 73 S.Ct. 222, 97 L.Ed. 276 (1952). This distinguished the Sheldon case specifically, holding that the only question before the court in Sheldon had been apportionment of profits from an infringing motion picture, and that the case did not stand for the proposition that where profits were established the ‘in lieu’ provision did not come into play. Further support for the view that Sheldon does not stand for the point cited by the district court is the dissenting opinion in Woolworth which quotes the same provision from the House Committee report which was rejected in the majority opinion. We conclude that Sheldon is not authority for the rule stated in conclusion of law 4, and that, since the opinion in Woolworth, Sheldon does not stand for the proposition that where both profits and damages can be ascertained the court should award the higher but not both and should decline to resort to the ‘in lieu’ provision.”
In Runge v. Lee, 161 U.S.P.Q. 770 (C.D.Cal.1969), aff’d 441 F.2d 579 (9 Cir.), cert. denied, 404 U.S. 887, 92 S.Ct. 197, 30 L.Ed.2d 169 (1971), The jury returned a verdict in favor of plaintiff in a copyright infringement action and awarded plaintiff compensatory damages of $80,000. The district court later held an accounting of profits and determined that defendant’s profits attributable to the infringement amounted to $64,253. But the court awarded plaintiff only “the higher of the two” figures. 161 U.S.P.Q. at 772. Plaintiff, however, did not claim both damages and profits, and it is clear that neither the district court nor this court considered the damage issue.
It is significant that the Second Circuit also did not feel constrained by its early precedent establishing alternative recovery. Indeed, Peter Pan Fabrics, Inc. v. Jobela Fabrics, Inc., 329 F.2d 194 (2 Cir. 1964), which established the cumulative rule, did not even mention Underwood Typewriter. It seems clear that the Second Circuit concluded that Underwood Typewriter, like Sheldon, was no longer good law after Woolworth. I agree.
The cumulative recovery rule is supported by the recent general revision of the Copyright Act. Act of October 19, 1976, Publ.L.No.94-553, 90 Stat. 2541, amending 17 U.S.C. § 101 et seq. (1909). Section 504(b) thereof provides in part:
“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.”
The new Act thus makes it explicit that the plaintiff is entitled to both actual damages and additional profits realized by the defendant from the infringement. See H.R. Rep.No.94-1476,94th Cong., 2d Sess., at 161 (1976); S.Rep.No.94^73, 94th Cong., 1st Sess., at 143-44 (1976); U.S.Code Cong. & Admin.News 1976, p. 5659. This court should view this new Act as indicative of Congressional intent in this area, see N.L.R.B. v. Bell Aerospace Co., 416 U.S. 267, 275, 94 S.Ct. 1757, 40 L.Ed.2d 134 (1974), and follow the cumulative recovery rule.
GOODWIN, Circuit Judge, concurs in the Opinion by Judge Carter on infringement and concurs in the Opinion by Judge Sneed on damages.

. “The provision that the copyright proprietor may have such damages as well as the profits which the infringer shall have made is substantially the same provision found in section 4921 of the Revised Statutes relating to remedies for the infringement of patents. The courts have usually construed that to mean that the owner of the patent might have one or the other, whichever was the greater. As such a provision was found both in the trademark and patent laws, the committee felt that it might be properly included in the copyright laws.”
Id. at 15. I do not believe that resort to the legislative history of the 1909 Copyright Act is necessary. The language of the statute itself is plain. It is a well-established rule of statutory construction that where the language of a statute itself is clear and unambiguous, it is determinative of construction. Monte Vista Lodge v. Guardian Life Ins. Co. of America, 384 F.2d 126, 128 (9 Cir. 1967); 2A C. Sands, Statutes and Statutory Construction §§ 45.02, 46.04 at 4, 54 (Rev.ed.1973). The legislative history does not resolve ambiguity; it creates it.

. Commentators generally endorse the cumulative over alternative recovery. See, e. g., L. Ambur, Copyright Law and Practice 1117 (1936); A. Weil, Copyright Law 467 (1917); Price, Monetary Remedies Under the United States Copyright Code, 27 Ford.L.Rev. 555, 564 (1959); Note, Remedies for Copyright Infringement, 23 Ark.L.Rev. 464, 466 (1969); Note, Monetary Recovery Under the Copyright, Patent, and Trademark Acts, 45 Texas L.Rev. 953, 962 (1967). But cf. 2 Nimmer § 151 at 667-69; Caplan, The Measure of Recovery in Actions for the Infringement of Copyright, 37 Mich.L. Rev. 564, 586 (1939); Comment, A New Look at Section 101(b) of the Copyright Act, 32 U.Chi.L.Rev. 98, 107-09 (1969).