CITE: 562 F.2d 1157
CMON: October 1977
PLAIN: Sid & Marty Krofft Television Productions
DEFND: McDonald's Corporation
COURT: United States Court of Appeals for the Ninth Circuit
DATE: October 12, 1977
HISTORY:
Appeal from the United States District Court for the Central District of
California.
Affirmed in part and Reversed in part.
SUMMARY:
Ninth Circuit renames the "idea/expression" dichotomy, now calling it
the "extrinsic/intrinsic" dichotomy, with an extrinsic test being for
the substantial similarity of ideas, and the intrinsic test being for
the substantial similarity of expression. Introduces "total concept
and feel" as a copyrightable aspect of the extrinsic aspects, without
stating how this does not contradict 17 U.S.C 102b.
JUDGE: JAMES M. CARTER, Circuit Judge
Carter, Goodwin, and Sneed, Circuit Judges. James M. Carter, Circuit Judge,
concurring and dissenting.
DECISION:
This is a copyright infringement action. Plaintiffs Sid and Marty Krofft
Television Productions, Inc., and Sid and Marty Krofft Productions, Inc.
were awarded $50,000.00 in their action against defendants McDonald's
Corporation and Needham, Harper & Steers, Inc. Defendants were found to
have infringed plaintiffs' "H. R. Pufnstuf" children's television show by
the production of their "McDonaldland" television commercials.
Plaintiffs argue on appeal that the district court erred in awarding damages
pursuant to 17 U.S.C. Section 101(b). They contend that the court should
have ordered an accounting of profits by defendants or, alternatively,
should have awarded statutory "in lieu" damages.
Defendants cross-appeal. They contend that their television commercials did
not infringe upon plaintiffs' television series as a matter of law. To find
infringement, they suggest, would abridge their first amendment rights.
They also refute plaintiffs' contentions as to damages.
We believe that the district court's finding of infringement was not clearly
erroneous, and see no merit to defendants' First Amendment claims, We find,
however, that the district court was in error in awarding damages. We
therefore affirm in part, reverse in part, and remand for further
proceedings.
Facts
In 1968, Sid and Marty Krofft were approached by the NBC television network
to create a children's television program for exhibition on Saturday morning.
{n1} The Kroffts spent the next year creating the H. R. Pufnstuf television
show, which was introduced on NBC in September 1969. The series included
several fanciful costumed characters, as well as a boy named Jimmy, who
lived in a fantasyland called "Living Island", which was inhabited by moving
trees and talking books. The television series became extremely popular and
generated a line of H. R. Pufnstuf products and endorsements.
In early 1970, Marty Krofft, the President of both Krofft Television and
Krofft Productions and producer of the show, was contacted by an executive
from Needham, Harper & Steers, Inc., an advertising agency. He was told
that Needham was attempting to get the advertising account of McDonald's
hamburger restaurant chain and wanted to base a proposed campaign to
McDonald's on the H. R. Pufnstuf characters. The executive wanted to know
whether the Kroffts would be interested in working with Needham on a
project of this type.
Needham and the Kroffts were in contact by telephone six or seven more times.
By a letter dated August 31, 1970, Needham stated it was going forward with
the idea of a McDonaldland advertising campaign based on the H. R. Pufnstuf
series. It acknowledged the need to pay the Kroffts a fee for preparing
artistic designs and engineering plans. Shortly thereafter, Marty Krofft
telephoned Needham only to be told that the advertising campaign had been
cancelled.
In fact, Needham had already been awarded McDonald's advertising account
and was proceeding with the McDonaldland project. {n2} Former employees
of the Kroffts were hired to design and construct the costumes and sets
for McDonaldland. Needham also hired the same voice expert who supplied
all of the voices for the Pufnstuf characters to supply some of the voices
for the McDonaldland characters. In January 1971, the first of the
McDonaldland commercials was broadcast on network television. They continue
to be broadcast.
Prior to the advent of the McDonaldland advertising campaign, plaintiffs
had licensed the use of the H. R. Pufnstuf characters and elements to the
manufacturers of toys, games, lunch boxes, and comic books. In addition,
the H. R. Pufnstuf characters were featured in Kellogg's cereal commercials
and used by the Ice Capades. After the McDonaldland campaign, which
included the distribution of toys and games, plaintiffs were unable to
obtain new licensing arrangements or extend existing ones. {n3} In the case
of the Ice Capades, the H. R. Pufnstuf characters were actually replaced
by the McDonaldland characters.
Plaintiffs filed suit in September 1971. The complaint alleged, inter alia,
that the McDonaldland advertising campaign infringed the copyrighted H. R.
Pufnstuf television episodes as well as various copyrighted articles of
Pufnstuf merchandise. {n4} By way of relief, plaintiffs sought compensatory
damages of $250,000, an order for an accounting of profits attributable to
the infringements, or, in the alternative, statutory "in lieu" damages,
as provided by 17 U.S.C. Section 101(b). Prior to trial, the district court
signed a Pre-Trial Conference Order that was "approved as to form and
content" by counsel for both sides. It provided that "the prayer for relief
raises issues of injunctive relief and an accounting which are questions for
the Court.".
The three week jury trial began on November 27, 1973. The jurors were shown
for their consideration on the question of infringement: (1) two H. R.
Pufnstuf television episodes; (2) various items of H. R. Pufnstuf
merchandise, such as toys, games, and comic books; (3) several 30 and 60
second McDonaldland television commercials; and (4) various items of
McDonaldland merchandise distributed by McDonald's, such as toys and
puzzles. The jury was instructed that it was not to consider defendants'
profits in determining damages, but could consider the value of use by
the defendants of plaintiffs' work.
A verdict in favor of plaintiffs was returned and damages of $50,000.00
assessed. After the verdict, the parties briefed the question of whether
plaintiffs were entitled to additional monetary recovery in the form of
profits or statutory "in lieu" damages. The district court denied
plaintiffs' claim for such relief. The court found that these matters
were properly for the jury to consider so that it would not exercise its
discretion in hearing further evidence. These appeals followed.
I. INFRINGEMENT
Proof of Infringement
It has often been said that in order to establish copyright infringement
a plaintiff must prove ownership of the copyright and "copying" by the
defendant. See, e.g., Reyher v. Children's Television Workshop, 533 F.2d
87, 90 (2nd Cir. 1976); Universal Athletic Sales Co. v. Salkeld, 511 F.2d 904,
907 (3rd Cir. 1975); 2 M. Nimmer on Copyright Section 141 at 610-11 (1976)
(hereinafter "Nimmer"). "Copying", in turn, is said to be shown by
circumstantial evidence of access to the copyrighted work and substantial
similarity between the copyrighted work and defendant's work. Reyher v.
Children's Television Workshop, supra, 533 F.2d at 90; 2 Nimmer 141.2 at 613.
But an analysis of the cases suggests that these statements frequently serve
merely as boilerplate to copyright opinions.
Under such statements, infringement would be established upon proof of
ownership, access, and substantial similarity. Application of this rule,
however, would produce some untenable results. For example, a copyright could
be obtained over a cheaply manufactured plaster statue of a nude. Since
ownership of a copyright is established, subsequent manufacturers of statues
of nudes would face the grave risk of being found to be infringers if their
statues were substantially similar and access were shown. The burden of
proof on the plaintiff would be minimal, since most statues of nudes would
in all probability be substantially similar to the cheaply manufactured
plaster one. {n5}
Clearly the scope of copyright protection does not go this far. A limiting
principle is needed. This is provided by the classic distinction between an
"idea" and the "expression" of that idea. It is an axiom of copyright law
that the protection granted to a copyrighted work extends only to the
particular expression of the idea and never to the idea itself. Mazer v.
Stein, 347 U.S. 201, 217-18 (1954); Baker v. Selden, 101 U.S. 99 (1879).
This principle attempts to reconcile two competing social interests:
rewarding an individual's creativity and effort while at the same time
permitting the nation to enjoy the benefits and progress from use of the
same subject matter.
The real task in a copyright infringement action, then, is to determine
whether there has been copying of the expression of an idea rather than
just the idea itself. "No one infringes, unless he descends so far into
what is concrete [in a work] as to invade . . . . [its] expression."
National Comics Publications v. Fawcett Publications, 191 F.2d 594, 600
(2nd Cir. 1951). Only this expression may be protected and only it may be
infringed. {n6}
The difficulty comes in attempting to distill the unprotected idea from the
protected expression. No court or commentator in making this search has
been able to improve upon Judge Learned Hand's famous "abstractions test"
articulated in Nichols v. Universal Pictures Corporation, 45 F.2d 119
(2nd Cir. 1930), cert. denied, 282 U.S. 902 (1931):
"Upon any work, and especially upon a play, a great number of patterns
of increasing generality will fit equally well, as more and more of
the incident is left out. The last may perhaps be no more than the
most general statement of what the play is about, and at times might
consist of only its title; but there is a point in this series of
abstractions where they are no longer protected, since otherwise the
playwright could prevent the use of his 'ideas,' to which, apart from
their expression, his property is never extended." 45 F.2d at 121.
See also Chafee, Reflections on the Law of Copyright, 45 Colum.L.Rev. 503
(1945); Esezobar, Concepts in Copyright Protection, 23 Bull.Cprt.Soc. 258
(1976); Note, "Expression" and "Originality" in Copyright Law, 11 Washburn
L.J. 400 (1972).
The test for infringement therefore has been given a new dimension. There
must be ownership of the copyright and access to the copyrighted work. But
there also must be substantial similarity not only of the general ideas but
of the expressions of those ideas as well. Thus two steps in the analytic
process are implied by the requirement of substantial similarity.
The determination of whether there is substantial similarity in ideas may
often be a simple one. Returning to the example of the nude statue, the idea
there embodied is a simple one -- a plaster recreation of a nude human figure.
A statue of a horse or a painting of a nude would not embody this idea and
therefore could not infringe. The test for similarity of ideas is still a
factual one, to be decided by the trier of fact. See International Luggage
Registry v. Avery Products Corp., 541 F.2d 830, 831 (9th Cir. 1976);
Williams v. Kaag Manufacturers, Inc., 338 F.2d 949, 951 (9th Cir. 1964).
We shall call this the "extrinsic test". It is extrinsic because it depends
not on the responses of the trier of fact, but on specific criteria which
can be listed and analyzed. Such criteria include the type of artwork
involved, the materials used, the subject matter, and the setting for the
subject. Since it is an extrinsic test, analytic dissection and expert
testimony are appropriate. Moreover, this question may often be decided
as a matter of law.
The determination of when there is substantial similarity between the forms
of expression is necessarily more subtle and complex. As Judge Hand candidly
observed, "Obviously, no principle can be stated as to when an imitator has
gone beyond copying the 'idea', and has borrowed its 'expression'. Decisions
must therefore inevitably be ad hoc." Peter Pan Fabrics, Inc. v. Martin
Weiner Corp., 274 F.2d 487, 489 (2nd Cir. 1960). If there is substantial
similarity in ideas, then the trier of fact must decide whether there is
substantial similarity in the expressions of the ideas so as to constitute
infringement.
The test to be applied in determining whether there is substantial
similarity in expressions shall be labeled an intrinsic one -- depending
on the response of the ordinary reasonable person. See International
Luggage Registry v. Avery Products Corp., supra, 541 F.2d at 831; Harold
Lloyd Corp. v. Witwer, 65 F.2d 1, 18-19 (9th Cir. 1933). See generally
Nimmer Section 143.5. It is intrinsic because it does not depend on the
type of external criteria and analysis which marks the extrinsic test.
As this court stated in Twentieth Century-Fox Film Corp. v. Stonesifer,
140 F.2d 579, 582 (9th Cir. 1944):
"The two works involved in this appeal should be considered and
tested, not hypercritically or with meticulous scrutiny, but by
the observations and impressions of the average reasonable reader
and spectator."
Because this is an intrinsic test, analytic dissection and expert testimony
are not appropriate.
This same type of bifurcated test was announced in Arnstein v. Porter, 154
F.2d 464, 468-69 (2nd Cir. 1946), cert. denied, 330 U.S. 851 (1947). The
court there identified two separate elements essential to a plaintiff's
suit for infringement: copying and unlawful appropriation. Under the
Arnstein doctrine, the distinction is significant because of the
different tests involved.
The trier of fact must determine whether the similarities are
sufficient to prove copying. On this issue, analysis ('dissection')
is relevant, and the testimony of experts may be received to aid the
trier of facts. * * * * If copying is established, then only does
there arise the second issue, that of illicit copying (unlawful
appropriation). On that issue . . . . the test is the response of the
ordinary lay hearer; accordingly, on that issue, 'dissection' and
expert testimony are irrelevant." 154 F.2d at 468 (footnotes omitted).
We believe that the court in Arnstein was alluding to the idea-expression
dichotomy which we make explicit today. When the court in Arnstein refers
to "copying" which is not itself an infringement, it must be suggesting
copying merely of the work's idea, which is not protected by the copyright.
To constitute an infringement, the copying must reach the point of "unlawful
appropriation, " or the copying of the protected expression itself. We
analyze this distinction in terms both of the elements involved -- idea and
expression -- and of the tests to be used -- extrinsic and intrinsic --
in an effort to clarify the issues involved.
The Tests Applied
In the context of this case, the distinction between these tests is
important. Defendants do not dispute the fact that they copied the idea of
plaintiffs' Pufnstuf television series -- basically a fantasyland filled with
diverse and fanciful characters in action. They argue, however, that the
expressions of this idea are too dissimilar for there to be an infringement.
They come to this conclusion by dissecting the constituent parts of the
Pufnstuf series -- characters, setting, and plot -- and pointing out the
dissimilarities between these parts and those of the McDonaldland
commercials.
This approach ignores the idea-expression dichotomy alluded to in Arnstein
and analyzed today. Defendants attempt to apply an extrinsic test by the
listing of dissimilarities in determining whether the expression they used
was substantially similar to the expression used by plaintiffs. That
extrinsic test is inappropriate; an intrinsic test must here be used.
As the court in Arnstein stated:
"Whether (if he copied) defendant unlawfully appropriated presents,
too, an issue of fact. The proper criterion on that issue is not an
analytic or other comparison of the respective . . . . compositions .
. . . The plaintiff's legally protected interest in the potential
financial return from his compositions which derive from the lay
public's approbation of his efforts. The question, therefore, is
whether defendant took from plaintiff's works so much of what is
pleasing to the [eyes and] ears of lay [persons], who comprise the
audience for whom such popular [works are] composed, that defendant
wrongfully appropriated something which belongs to the plaintiff.
Surely, then, we have an issue of fact which a jury is peculiarly
fitted to determine." 154 F.2d at 472-73 (footnotes omitted).
Analytic dissection, as defendants have done, is therefore improper.
Defendants contest the continued viability of Arnstein. It is true that
Arnstein's alternative holding that summary judgment may not be granted
when there is the slightest doubt as to the facts has been disapproved.
See, e.g., First National Bank of Arizona v. Cities Service Co., 391 U.S. 253,
288-90 (1968); Beal v. Lindsay, 468 F.2d 287, 291 (2nd Cir. 1972); Janis v.
Wilson, 385 F. Supp. 1143, 1147 (D.S.D. 1974); Keller v. California Liquid
Gas Corp., 363 F. Supp. 123, 126 (D.Wyo. 1973). But the case's tests for
infringement have consistently been approved by this court. See, e.g.,
Goodson-Todman Enterprises, Inc. v. Kellogg Co., 513 F.2d 913, 914 (9th Cir.
1975); Overman v. Loesser, 205 F.2d 521, 523 (9th Cir. 1953). They have
also been accepted by other courts. See, e.g., Universal Athletic Sales Co.
v. Salkeld, supra, 511 F.2d at 907; Scott v. WKJG, Inc., 376 F.2d 467, 469
(7th Cir. 1967). {n7} We believe Arnstein is still good law.
Since the intrinsic test for expression is uniquely suited for determination
by the trier of fact, this court must be reluctant to reverse it. See
International Luggage Registry v. Avery Products Corp., supra, 541 F.2d at
831; Caddy-Imler Creations, Inc. v. Caddy, 299 F.2d 79, 82 (9th Cir. 1962).
As this court said in Williams v. Kaag Manufacturers, Inc., supra, 338 F.2d
at 951:
"We have commented frequently on the inappropriateness of substituting
our judgment for that of the trial judge on questions of fact.
The more vague the test, the less inclined we are to intervene."
As a finding of fact, a conclusion as to the question of copying is subject
to the "clearly erroneous" standard. Fed.R.Civ.P. 52(a). But it follows
that this court will be less likely to find clear error when the subjective
test for copying of expression has been applied.
The present case demands an even more intrinsic determination because both
plaintiffs' and defendants' works are directed to an audience of children.
This raises the particular factual issue of the impact of the respective
works upon the minds and imaginations of young people. As the court said
in Ideal Toy Corp. v. Fab-Lu Ltd., 261 F. Supp. 238, 241-42 (S.D.N.Y. 1966),
aff'd, 360 F.2d 1021 (2nd Cir. 1966):
In applying the test of the average lay observer, [children] are
not to be excluded -- indeed they are the ' far-flung faithful . . . .
audience.' The television advertising campaign of plaintiff was
directed toward acquainting these youngsters with . . . . its new
teenage and pre-teen dolls. The impression of the faces and general
appearance of the dolls was upon them . . . . The dolls create the
same impression, both with respect to their appearances and the play
-- uses for which they are suited. It is the youngsters who, on the
basis of this impression, go to the stores with their parents or at
home make their wishes known for the dolls they desire after
television has made its impact upon them. In their enthusiasm to
acquire . . . . [the dolls] they certainly are not bent upon
'detecting disparities' or even readily observing upon inspection
such fine details as the point at which the necks are molded"
(citations and footnotes omitted).
The H. R. Pufnstuf series became the most popular children's show on Saturday
morning television. This success led several manufacturers of children's goods
to use the Pufnstuf characters. It is not surprising, then, that McDonald's
hoped to duplicate this peculiar appeal to children in its commercials.
{n8} It was in recognition of the subjective and unpredictable nature of
children's responses that defendants opted to recreate the H. R. Pufnstuf
format rather than use an original and unproven approach.
Defendants would have this court ignore that intrinsic quality which they
recognized to embark on an extrinsic analysis of the two works. For
example, in discussing the principal characters -- Pufnstuf and Mayor
McCheese -- defendants point out:
"'Pufnstuf' wears what can only be described as a yellow and green
dragon suit with a blue cummerband from which hangs a medal which says
'mayor'. 'McCheese' wears a version of pink formal dress -- 'tails'
-- with knicker trousers. He has a typical diplomat's sash on which
is written 'mayor', the 'M' consisting of the McDonald's trademark of
an 'M' made of golden arches."
So not only do defendants remove the characters from the setting, but dissect
further to analyze the clothing, colors, features, and mannerisms of each
character. We do not believe that the ordinary reasonable person, let
alone a child, viewing these works will even notice that Pufnstuf is wearing
a cummerbund while Mayor McCheese is wearing a diplomat's sash.
Duplication or near identity is not necessary to establish infringement.
Runge v. Lee, 441 F.2d 579, 582 (9th Cir. 1971); Williams v. Kaag
Manufacturers, Inc., supra, 338 F.2d at 951. As this court stated in
Universal Pictures Co., Inc. v. Harold Lloyd Corp., infra, 162 F.2d 354,
at 360:
"[An] infringement is not confined to literal and exact repetition or
reproduction; it includes also the various modes in which the matter
of any work may be adopted, imitated, transferred, or reproduced, with
more or less colorable alterations to disguise the piracy."
And, as Judge Learned Hand put it, copyright "cannot be limited literally
to the text, else a plagiarist would escape by immaterial variations".
Nichols v. Universal Pictures Corp., 45 F.2d 119, 121 (2nd Cir. 1930).
We have viewed representative samples of both the H. R. Pufnstuf show and
McDonaldland commercials. It is clear to us that defendants' works are
substantially similar to plaintiffs'. {n9} They have captured the "total
concept and feel" of the Pufnstuf show. Roth Greeting Cards v. United Card
Co., 429 F.2d 1106, 1110 (9th Cir. 1970). We would so conclude even if we
were sitting as the triers of fact. There is no doubt that the findings of
the jury in this case are not clearly erroneous.
Unity of Idea and Expression
Defendants argue that dissection is proper and that duplication or near
identity is necessary because the competing works are things, rather than
dramatic works. They cite numerous cases in which infringement was found
because the defendants' works were nearly identical to those of the
plaintiffs. See, e.g., Bleistein v. Donaldson Lithographing Co., 188 U.S.
239, 250 (1903) (circus posters); Sunset House Distributing Corp. v. Doran,
304 F.2d 251, 252 (9th Cir. 1962) (plastic Santa Claus); King Features
Syndicate v. Fleischer, 299 F. 533, 534 (2nd Cir. 1924) (doll). Defendants
fail to perceive, however, that near identity may be required in some cases
not because the works are things, but because the expression of those works
and the idea of those works are indistinguishable.
Herbert Rosenthal Jewelry Corp. v. Kalpakian, 446 F.2d 738 (9th Cir. 1971),
upon which defendants rely, is illustrative of this point. In that case,
plaintiff sued for infringement of its jeweled bee pin, claiming it should
be protected against the manufacture of any substantially similar object.
This court responded:
"What is basically at stake is the extent of the copyright owner's
monopoly -- from how large an area of activity did Congress intend to
allow the copyright owner to exclude others? We think the production
of jeweled bee pins is a larger private preserve than Congress
intended to be set aside in the public market without a patent. A
jeweled bee pin is therefore an idea that defendants were free to
copy. Plaintiff seems to agree, for it disavows any claim that
defendants cannot [*1168] manufacture and sell jeweled bee pins and
concedes that only plaintiffs' particular design or expression of
the jeweled bee pin idea is protected under its copyright. The
difficulty, as we have noted, is that on this record the idea and its
expression appear to be indistinguishable. There is no greater
similarity between the pins of plaintiff and defendants than is
inevitable from the use of jewel-encrusted bee forms in both.
"When the idea and its expression are thus inseparable, copying the
expression will not be barred, since protecting the expression
in such circumstances would confer a monopoly of the idea upon the
copyright owner free of the conditions and limitations imposed by
the patent law." Id. at 742.
See also Herbert Rosenthal Jewelry Corp. v. Honora Jewelry Co., Inc.,
509 F.2d 64, 65 (2nd Cir. 1974).
The idea and the expression will coincide when the expression provides
nothing new or additional over the idea. Thus, the expression of a jeweled
bee pin contains nothing new over the idea of a jeweled bee pin. Returning
to our own example, the idea of a plaster statute of a nude will probably
coincide with the expression of that idea when an inexpensive manufacturing
process is used. There will be no separately distinguishable features in
the statute's expression over the idea of a plaster nude statute. {n10}
The complexity and artistry of the expression of an idea will separate it
from even the most banal idea. Michaelangelo's David is, as an idea, no
more than a statute of a nude male. But no one would question the
proposition that if a copyrighted work it would deserve protection even
against the poorest of imitations. This is because so much more was added
in the expression over the idea.
When idea and expression coincide, there will be protection against nothing
other than identical copying of the work. When other defendants made jeweled
bees from the same molds as plaintiffs, they were held liable. See Herbert
Rosenthal Jewelry Corp. v. Grossbardt, 436 F.2d 315 (2nd Cir. 1970).
Therefore, the scope of copyright protection increases with the extent
expression differs from the idea.
The coincidence of idea and expression may occur in works other than
"things". {n11} Baker v. Selden, supra, held that blank accounting books
are not subject to copyright protection. Yet if any information is
contained in those blanks, copyright protection is available. See Edwin K.
Williams & Co. v. Edwin K. Williams, etc., 542 F.2d 1053, 1060-61 (9th Cir.
1976) (account books with explanation); Guthrie v. Curlett, 36 F.2d 694
(2nd Cir. 1929) (index of freight tariffs); American Code Co. v. Bensinger,
282 F. 829 (2 Cir. 1922) (codes).
There is no special standard of similarity required in the case of "things".
Nor is any such standard suggested by any of the cases cited by defendants.
For example, in Monogram Models, Inc. v. Industro Motive Corp., 492 F.2d
1281, 1284 (6th Cir. 1974), the issue was one of copyright infringement of
scale model airplane kits. Defendant admitted copying, but argued lack of
substantial copying. The court affirmed a jury finding of infringement,
citing the ordinary reasonable observer test. Id. at 1286. See also
Williams v. Kaag Manufacturers, Inc., supra, 338 F.2d at 951 (cowboy
statuettes); Day-Brite Lighting, Inc. v. Sta-Brite Fluorescent
Manufacturing Co., 308 F.2d 377, 380 (5th Cir. 1962) (catalogue).
No standard more demanding than that of substantial similarity should be
imposed here. This is not a case where the idea is indistinguishable as
a matter of law from the expression of that idea. See Goodson-Todman
Enterprises, Inc. v. Kellogg Co., supra, 513 F.2d at 914. The expression
inherent in the H. R. Pufnstuf series differs markedly from its relatively
simple idea. The characters each have developed personalities and
particular ways of interacting with one another and their environment.
The physical setting also has several unique features.
Lest we fall prey to defendants' invitation to dissect the works, however,
we should remember that it is the combination of many different elements
which may command copyright protection because of its particular subjective
quality. Reyher v. Children's Television Workshop, Inc., supra, 533 F.2d
at 91-92; Ideal Toy Corp. v. Sayco Doll Corp., 302 F.2d 623, 624 (2nd Cir.
1962). As the court said in Malkin v. Dubinsky, 146 F. Supp. 111, 114
(S.D.N.Y. 1956): "While any one similarity taken by itself seems trivial,
I cannot say at this time that it would be improper for a jury to find
that the over-all impact and effect indicate substantial appropriation".
{n12} The same is true here. {n13}
Copyright and the First Amendment
Defendants argue that the first amendment operates in this case to limit the
protection for plaintiffs' works. {n14} They seem to suggest that a more
demanding standard than that of substantial similarity should be imposed,
and that the threshold question about copying becomes one of "constitutional
fact" to be reviewed de novo on appeal. Defendants attempt to analogize
the copyright area to those of obscenity and defamation in suggesting that
prior law must be modified to accommodate expanding First Amendment rights.
The constitutionality of the copyright law was settled long ago by the
Supreme Court. In Kalem Co. v. Harper Brothers, 222 U.S. 55 (1911), the
defendant argued that the copyright law could not grant an author an
exclusive right to dramatize his works. In rejecting this contention,
the Court stated:
"It is argued that the law, construed as we have construed it,
goes beyond the power conferred upon Congress by the Constitution,
to secure to authors for a limited time the exclusive right to their
writings. Art. I, Section 8, cl. 8. It is suggested that to
extend the copyright to a case like this is to extend it to the ideas,
as distinguished from the words in which the ideas are clothed. But
there is no attempt to make a monopoly of the ideas expressed. The
law confines itself to a particular, cognate, and well-known form of
reproduction. If to that extent a grant of monopoly is thought a
proper way to secure the right to the writings, this court cannot
say that Congress was wrong." Id. at 63, 32 S. Ct. at 22.
The Court recognized that the protection of the copyright laws is necessary
to provide an incentive for artistic creation which ultimately advances
the public good. See Twentieth Century Music Corp. v. Aiken, 422 U.S. 151,
156 (1975).
But the impact, if any, of the first amendment on copyright has not been
discussed by the Court. {n15} We believe this silence stems not from
neglect but from the fact that the idea-expression dichotomy already
serves to accommodate the competing interests of copyright and the First
Amendment. The "marketplace of ideas" is not limited by copyright because
copyright is limited to protection of expression. As one commentator has
stated:
"The idea-expression line represents an acceptable definitional
balance as between copyright and free speech interests. In some
degree it encroaches upon freedom of speech in that it abridges the
right to reproduce the 'expression' of others, but this is justified
by the greater public good in the copyright encouragement of creative
works. In some degree it encroaches upon the author's right to
control his work in that it renders his 'ideas' per se unprotectible,
but this is justified by the greater public need for free access to
ideas as part of the democratic dialogue."
Nimmer, Does Copyright Abridge the First Amendment Guarantees of Free
Speech and Press?, 17 U.C.L.A.L.Rev. 1180, 1192-93 (1970). Cf. Lee v. Runge,
404 U.S. 887, 892-93 (1971) (Douglas, J., dissenting).
Ideas which may be of public interest are not subject to copyright; the
specific form of expression of these ideas are. Thus, the political views
of Dr. Martin Luther King may be widely disseminated. But the precise
expression of these views in a speech may be protected. King v. Mister
Maestro, Inc., 224 F. Supp. 101 (S.D.N.Y. 1963). See also Public Affairs
Associates, Inc. v. Rickover, 177 F. Supp. 601 (D.D.C. 1960), rev'd,
109 U.S.App.D.C. 128, 284 F.2d 262 (1960), rev'd, 369 U.S. 111 (1962), on
remand, 268 F. Supp. 444 (D.D.C. 1967); Atlantic Monthly Co. v. Post Pub.
Co., 27 F.2d 556 (D.Mass. 1928). Similarly, the facts about a historical
figure are available to all to use. But if the expression of those facts
in a biography is substantially copied infringement will be found. See,
e.g., Toksvig v. Bruce Publishing Co., 181 F.2d 664 (7th Cir. 1950);
Marvin Worth Productions v. Superior Films Corp., 319 F. Supp. 1269
(S.D.N.Y. 1970); Holdredge v. Knight Publishing Corp., 214 F. Supp. 921
(C.D.Cal. 1963).
With the law of copyright permitting the free use of ideas, it is not
surprising that the few courts addressing the issue have not permitted
defendants who copy a work's expression to hide behind the first amendment.
See, e.g., Duchess Music Corp. v. Stern, 458 F.2d 1305, 1310-11 (9th Cir.
1972); United States v. Bodin, 375 F. Supp. 1265, 1267-68 (W.D.Okl. 1974)
McGraw-Hill, Inc. v. Worth Publishers, Inc., 335 F. Supp. 415, 422
(S.D.N.Y. 1971). In Walt Disney Productions v. Air Pirates, 345 F. Supp. 108
(N.D.Cal. 1972), plaintiff sued for infringement of several of its famous
cartoon characters by defendants, who used them for purposes of literary
criticism. Defendants claimed that the First Amendment limited the scope
of plaintiff's copyright protection. The court responded:
"However defendants would have it, the hard fact remains that both
parties are dealing in cartoon series, comic books or strips, and
that the mode which the defendants have chosen for the expression
of their concepts amounts to a substantial taking of plaintiff's
expression of its concepts, even assuming vast difference in the
content of those concepts. It can scarcely be maintained that there
is no other means available to defendants to convey the message they
have, nor is it even clear that other means are not available within
the chosen genre of comics and cartoons. To paraphrase, it is true
that it would be easier to copy substantial portions of the expression
as distinguished from the idea itself of the Disney works, but the
value of such labor-saving utility is far outweighed by the copyright
interest in encouraging creation by protecting expression."
Id. at 115 (footnotes omitted).
The district court in Disney recognized that the expression inherent in
plaintiff's works differs from the mere idea of those works. The "idea"
of Mickey Mouse is, after all, no more than a mouse. Yet the particular
expression of that mouse has phenomenal commercial value and is recognized
worldwide. Defendants there could have chosen any number of ways to
express their idea of a mouse, but chose to copy Disney's. So too the
defendants in this case had many ways to express the idea of a fantasyland
with characters, but chose to copy the expression of plaintiffs'. The
First Amendment will not protect such imitation.
There may be certain rare instances when first amendment considerations will
operate to limit copyright protection for graphic expressions of newsworthy
events. {n16} For example, in Time, Inc. v. Bernard Geis Associates, 293 F.
Supp. 130 (S.D.N.Y. 1968), Life magazine sued a historian for copying frames
of the Zapruder films of the assassination of John F. Kennedy. Although the
court did not expressly invoke the First Amendment, it did justify the
defendant's right to copy frames of the film on the ground of the "public
interest in having the fullest information available on the murder of
President Kennedy." Id. at 146. Plaintiffs' work in this case is neither
a graphic expression nor concerning newsworthy events. Therefore, no
First Amendment considerations operate. {n17}
Access
In addition to substantial similarity, a plaintiff must show access in
order to prove infringement. Reyher v. Children's Television Workshop,
supra, 533 F.2d at 90; 2 Nimmer 141.2 at 613. Access is proven when
the plaintiff shows that the defendant had an opportunity to view or to
copy plaintiff's work. Arrow Novelty Co. v. Enco National Corp.,
393 F. Supp. 157, 160 (S.D.N.Y.), aff'd, 515 F.2d 504 (2nd Cir. 1975);
Universal Athletic Sales Co. v. Salkeld, 340 F. Supp. 899, 901 (W.D.Pa. 1972).
In this case, there is no dispute as to defendants' access to plaintiffs'
work. Indeed, defendants were engaged in negotiations with plaintiffs
for licensing of the works even while preparing the McDonaldland
commercials.
No amount of proof of access will suffice to show copying if there are no
similarities. Williams v. Kaag Manufacturers, Inc., supra, 338 F.2d at 951;
Arnstein v. Porter, supra, 154 F.2d at 468. This is not to say, however,
that where clear and convincing evidence of access is presented, the quantum
of proof required to show substantial similarity may not be lower than when
access is shown merely by a preponderance of the evidence. As Professor
Nimmer has observed:
"Clear and convincing evidence of access will not avoid the
necessity of also proving substantial similarity since access without
similarity cannot create an inference of copying. However, this
so-called 'Inverse Ratio Rule' . . . . would seem to have some limited
validity. That is, since a very high degree of similarity is required
in order to dispense with proof of access, it must logically follow
that where proof of access is offered, the required degree of
similarity may be somewhat less than would be necessary in the absence
of such proof." 2 Nimmer 143.4 at 634.
Accord, Fink v. Goodson-Todman Enterprises, Ltd., 9 Cal.App.3d 996, 1013
(1970). We agree. But see Arc Music Corp. v. Lee, 296 F.2d 186 (2nd Cir.
1961).
In this case, representatives of Needham actually visited the Kroffts'
headquarters in Los Angeles to discuss the engineering and design work
necessary to produce the McDonaldland commercials. They did this after
they had been awarded the contract by McDonald's and apparently with no
intention to work with the Kroffts. We believe that this degree of access
justifies a lower standard of proof to show substantial similarity. Since
the subjective test applies, it is impossible to quantify this standard
But there is no question it is met here.
II. DAMAGES
Awarding Damages
Section 101(b), 17 U.S.C., provides that a copyright infringer shall be
liable as follows:
"(b) Damages and profits; amount; other remedies.
To pay to the copyright proprietor 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, and in proving profits the plaintiff shall be required
to prove sales only, and the defendant shall be required to prove
every element of cost which he claims . . . ."
Thus, a court in making an award for infringement must determine both
actual damages suffered by a plaintiff and profits from the infringement
made by defendant.
While there is disagreement as to whether both damages and profits are
to be included in the award, an issue we will take up shortly, there is
agreement that a successful plaintiff is entitled to at least the greater
of damages or profits. See Universal Pictures Co. v. Harold Lloyd Corp.,
162 F.2d 354, 375-77 (9th Cir. 1947); L & L White Metal Casting Corp. v.
Joseph, 387 F. Supp. 1349, 1357 (E.D.N.Y. 1975); 2 Nimmer 150-51 at 666-69.
In order to accurately determine profits, a defendant may be required to
make an accounting. 2 Nimmer 153.2 at 674.
The jury assessed damages of $50,000 against defendants in this case.
Subsequent to the return of the verdict, counsel for both sides, at the
district court's request, briefed the question of whether plaintiffs were
entitled to additional monetary recovery either in the form of profits or
statutory "in lieu" damages. After considering this question, the district
court concluded that plaintiffs were not entitled to any additional
recovery and denied plaintiffs' motion for an accounting of profits by
defendants.
The issues on appeal are threefold: (1) whether the jury considered profits
in assessing damages; (2) if not, whether plaintiffs are entitled to
recovery of damages and profits or merely damages or profits; and (3)
whether, if profits cannot accurately be determined, plaintiffs are
entitled to statutory "in lieu" damages.
Consideration of Profits by the Jury
Two weeks before trial, the district court signed the Pre-Trial Conference
Order that was prepared and "approved as to form and content" by counsel
for both sides. It provided:
"All factual questions of liability and damages are for the jury.
The prayer for relief raises issues of injunctive relief and an
accounting which are questions for the court."
Rule 16 of the Federal Rules of Civil Procedure expressly provides that
a Pre-Trial Conference Order "when entered controls the subsequent course
of the action, unless modified at the trial to prevent manifest injustice".
There was no modification of this Order at trial or at any other time.
Rule 39(a) of the Federal Rules further provides that issues will not be
given to the jury when reserved for the court by "written stipulation
filed with the court".
Defendants argue that plaintiffs' original demand for a jury trial meant that
all issues had to go to the jury. See Fed.R.Civ.P. 38(c). But the clear
language of the Pre-Trial Conference Order and the subsequent conduct of the
parties contradict any claimed general demand for a jury trial. {n18}
We conclude that the parties intended to withhold the issue of profits from
the jury.
This conclusion is supported by the instructions given to the jury. Jury
Instruction No. 26 was accepted by the court and read to the jury as
follows:
"(i) Under a claim of copyright infringement a plaintiff, after, and
only after, having first established the necessary elements thereof
(about which I have previously charged) by a preponderance of the
credible evidence, is entitled to recover only such actual damages
as he has proven to be attributable to the infringing use of his
material, that is to say, they may recover only that sum of money
which they have proven to be their actual pecuniary loss.
"(ii) The profits of defendants are not to be considered by you in
determining plaintiffs' money damages claim hereunder" (emphasis
added).
The record also shows that inquiry from the court elicited agreement with this
instruction from counsel for both sides. {n19}
Defendants argue that this instruction was designed only to prevent
the jury from considering the corporate profits of McDonald's, which
are derived from the purveying of food. They point instead to Jury
Instruction No. 49, which reads:
"If you find that defendants infringed plaintiffs' copyright,
plaintiffs are entitled to all of the damages, if any, suffered as a
result of such infringement. In arriving at any such damages, you may
take into consideration the reasonable value, if any, of plaintiffs'
work including the publication and republication rights therein, and
the value, if any, to defendants of the use of plaintiffs' works."
Defendants claim that the value of use provided in this instruction is
equivalent to defendant's profits from the infringement.
The value of use reference in Instruction No. 49 is defined as a part of the
reasonable value of plaintiffs' work. It amounts to a determination of what
a willing buyer would have been reasonably required to pay to a willing
seller for plaintiffs' work. That is a different measure than the
determination of defendants' actual profits from the infringement. An author
might license the use of his copyright either for a lump sum based on the
reasonable value of the work or for a royalty derived from the licensee's
profits, or for a combination of both. {n20}
The district court recognized the potential for confusion between these
two instructions. It agreed upon an explanation offered by counsel for
plaintiffs: "I think that the difference would be that a person may pay
to use 'Living Island' and the characters, and then, even though they have
paid for them, they may have suffered a loss and suffered no profit." It
was only because the district court concluded that there was a difference
between profits and value of use that both Instructions 26 and 49 were
delivered to the jury. We agree with this distinction.
Defendants argue further that profits in fact were considered by the jury.
The record does not support this conclusion. No exhibits regarding either
defendants' profits were submitted to the jury in the infringement action.
{n21} We therefore find that the issue of profits was neither submitted
to nor considered by the jury.
An Accounting of Profits as a Legal Remedy
In denying plaintiffs' motion for an accounting of profits, the district
court relied upon Dairy Queen v. Wood, 369 U.S. 469 (1962). That case
involved claims for breach of contract and trademark infringement in
which the plaintiffs also asked for an accounting. The Court ruled that
the wording of the claim for relief is not dispositive. The plaintiffs
sought money damages and had a right to trial by jury. Id. at 477-78.
See also Ross v. Bernhard, 396 U.S. 531, 541-42 (1970); Beacon Theatres,
Inc. v. Westover, 359 U.S. 500, 509 (1959). Plaintiffs' claim for damages
and an accounting of profits in this case parallels that made in Dairy Queen.
The issue whether an accounting of profits in an infringement action is legal
or equitable was considered by the court in Swofford v. B & W, Inc., 336 F.2d
406 (5th Cir.), cert. denied, 379 U.S. 962 (1964). That court held that
Dairy Queen controlled, and said:
"An accounting for profits, although a creature of equity, is a
rule of administration and not of jurisdiction. The court of equity
awarded compensatory damages incidental to an injunction to avoid
multiplicity of suits and not because the jury lacked competence. We
do not believe that this practice in patent and copyright infringement
cases, which was justified historically to avoid multiplicity of
litigation in a divided procedure, should be continued in a merged
system where such multiplicity can be avoided by one civil action.
It is a well-settled doctrine that the distinction of jurisdiction,
between law and equity, is constitutional, to the extent to which the
Seventh Amendment forbids any infringement of the right of trial by
jury, as fixed by the common law. To continue the past practice is
to convert an administrative rule into a jurisdictional one so as to
deprive the parties of a jury on what is basically a money claim for
damages based on a charge of . . . . infringement." 336 F.2d at 411
(citations omitted).
We agree with this reasoning. Plaintiffs in this case had a right to a
jury trial. {n22}
But a right is not an obligation. Dairy Queen only decided when a party has
a right to a jury trial. It certainly cannot be read to hold that the parties
are required to have a jury determination even if they do not wish it.
It is clear from our analysis of the Pre-Trial Conference Order and jury
instructions that the parties did not intend the jury to consider profits.
The district court therefore was in error in concluding that Dairy Queen
compelled the jury to consider profits in this case.
Conclusion
The judgment of the district court finding infringement is affirmed. The
McDonald commercials are based on the same ideas as the H. R. PufnStuf
series. The expression of that idea is sufficiently similar so that a
jury applying an intrinsic test could find infringement. This is especially
true here since there was strong evidence of access.
SNEED, Circuit Judge:
I concur in the preceding portion of this opinion. The following portion,
dealing with the problems of alternative or cumulative recovery and
"in lieu" damages, expresses the majority view of this court on these
two issues, and is intended to complement the preceding portion of
this opinion.
I.
Alternative or Cumulative Recovery.
If defendants can render an accounting of their profits, the question remains
whether plaintiffs are entitled either to (1) the greater of either
damages or profits, or (2) both damages and profits. Courts have been
unable to agree on this question. {nn1} This disagreement has its roots
in the conflict between the statutory language, which appears to contemplate
a cumulative recovery, {nn2} and the legislative history, which indicates
that Congress envisioned an alternative recovery. {nn3} This circuit in
Universal Pictures Co. v. Harold Lloyd Corp., 162 F.2d 354 (9th Cir. 1947)
expressly adopted the alternative recovery, and we are constrained to
follow that decision here.
It has been argued that the Supreme Court's decision in F. W. Woolworth
Co. v. Contemporary Arts, Inc., 344 U.S. 228 (1952) and this court's
interpretation of that decision in Shapiro, Bernstein & Co. v. 4636 S.
Vermont Ave., Inc., 367 F.2d 236 (9th Cir. 1966) overruled, sub silentio,
Universal Pictures. We disagree. Both Woolworth and Shapiro dealt with
the related question of the propriety of "in lieu" damages in certain
factual situations; neither squarely confronted the question of cumulative
versus alternative recovery.
To illustrate, in Woolworth the district court had awarded "in lieu" damages
in the face of ascertained, albeit small, profits and substantial but unproven
damages. The Supreme Court affirmed this award for two reasons: (1) to
compensate the copyright owner for injury when proof of such injury is
difficult or impossible, and (2) to discourage wrongful conduct. In the
context of this holding the Court used the following language, which it
has been argued, demonstrates that it favors cumulative recovery.
[A] rule of liability which merely takes away the 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.
When read in light of the issue before the Court, viz. the propriety of
"in lieu" damages, this passage does not indicate that cumulative recovery
is required to discourage infringement, but rather that the threat of
"in lieu" damages should exist to serve as a deterrent to future
infringement. The remainder of the quoted passage further evidences
the thrust of the Court's opinion.
The discretion of the court is wide enough to permit a resort to
statutory damages for such purposes. Even for uninjurious and
unprofitable invasions of copyright the court may, if it deems it
just, impose a liability within the statutory limits to sanction
and vindicate the statutory policy.
Id.
The fact that "a rule of liability which merely takes away the profits" is
an insufficient deterrent helped to convince the Court to hold that "in
lieu" recovery, not cumulative recovery, was available.
Nor does Shapiro hold that cumulative recovery is available under the Act.
In Shapiro, the trial court had determined that, although ascertainable,
damages were non-existent and profits were de minimus and consequently,
the copyright owner was entitled to no monetary recovery. The Ninth Circuit
affirmed these findings of fact and, reasoning from Woolworth, held that
although the trial court had the discretion to apply "in lieu" damages,
its refusal to do so was not error.
The trial court, relying on Sheldon v. Metro-Goldwyn Corp., 309 U.S. 390
(1940), had concluded that if either profits or damages are ascertainable,
then "in lieu" damages are inappropriate. We disagreed with that
conclusion. In passing we stated 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.
367 F.2d at 240.
This statement merely acknowledges the Woolworth dicta which indicates that
the trial court has discretion to award "in lieu" damages even though both
profits and damages have been proved. Again, we must note that this court
was dealing not with the propriety of cumulative versus alternative recovery,
but rather with the availability of "in lieu" damages. The question of
whether only the higher of the two ascertainable elements may be awarded
was not before the court; the court simply held that even with
ascertainable profits and damages, "in lieu" damages still may be granted.
{nn4}
II.
Statutory "In Lieu" Damages.
In the case now before us the district court, after the jury had been
dismissed, refused to exercise its discretion to hear additional testimony
on the applicability of "in lieu" damages. It ruled that "in lieu"
damages should have been submitted previously to the jury and consequently
it declined to consider the propriety of such an award. We reverse this
determination and hold that, after the plaintiffs have had an opportunity
to prove profits, the district court should consider the propriety of
"in lieu" damages, although an award of such damages will be within its
discretion.
We so hold because the issue of "in lieu" damages is properly addressed to
the court, not the jury. Section 101(b) expressly directs the court to use
its discretion in the determination of "in lieu" damages. {nn5} The jury
plays no role in this determination, because "the court's conception of
what is just in the particular case, considering the nature of the
copyright, the circumstances of the infringement, and the like, is made
the measure of the damages to be paid . . . ." Westermann Co. v. Dispatch
Printing Co., 249 U.S. 100, 106 (1919) (emphasis added). See F. W.
Woolworth Co. v. Contemporary Arts, Inc., supra.
The precise scope of the district court's discretion in awarding "in lieu"
damages presents a more difficult question. Although in all cases the
amount of "in lieu" damages is left to the discretion of the district court,
limited in certain circumstances by the maximum [**64] and minimum amounts
prescribed by the Act, the circumstances, if any, under which such an award
must be made can be discerned only after properly interpreting F. W.
Woolworth Co. v. Contemporary Arts, Inc. and Shapiro, Bernstein & Co. v.
4636 S. Vermont Ave., Inc.
Woolworth, strictly read, teaches us that when only profits are proven the
district court has the discretion to award "in lieu" damages also could be
awarded when only actual damages were proven: "Lack of adequate proof on
either element would warrant resort to the statute in the discretion of
the court, subject always to the statutory limitations." {nn6}
F. W. Woolworth Co. v. Contemporary Arts, Inc., 344 U.S. at 233
(Emphasis added).
It has been suggested that Shapiro teaches that if either profits or actual
damages are not ascertained the district court must award "in lieu" damages.
See, e.g., 2 M. Nimmer 154.13 at 681, n. 91a (June 1976 Supp. at 77-78). We
disagree. Shapiro was a case in which both actual damages and profits were
ascertained. Under these circumstances the district court declined to award
"in lieu" damages. This court affirmed the findings of fact but held,
nonetheless, that the trial court in its discretion could award "in lieu"
damages but was under no duty to do so.
Those who read Shapiro to impose a duty to award "in lieu" damages if either
profits or actual damages are unascertainable point to dicta that states that
"the judicial discretion . . . . only comes into play when profits and damages
have actually been proved, and unless they have, the court must apply the
statutory standard." 367 F.2d at 240. We read this to mean that the district
court has a duty to award "in lieu" damages only when both profits and damages
have not been established. Three considerations support this interpretation.
First, the cases cited immediately after the above quoted dicta, i.e.,
Douglas v. Cunningham, 294 U.S. 207 (1935); Jewell-LaSalle Realty Co. v.
Buck, 283 U.S. 202 (1931); Westermann Co. v. Dispatch Printing Co.,
249 U.S. 100 (1919), all involved fact situations in which neither damages
nor profits were proven. With this in mind, it is clear why the court said
immediately following the citations that Woolworth did not conflict with these
cases. Second, a contrary interpretation of Shapiro would place it in direct
conflict with the holding of Woolworth. Faced with ascertained profits, but
unascertained damages, the Court nevertheless held that "in lieu" damages
were discretionary. Third, inasmuch as Shapiro was decided in the context
of ascertained profits and ascertained damages, it is not unreasonable to
assume that the court was addressing situations in which either both
profits and damages are ascertained or neither is ascertained.
This interpretation of Shapiro leaves the problem of "in lieu" damages in
the following posture. If either profits or actual damages or both are
ascertained, the court, in its discretion, may award statutory "in lieu"
damages. {nn7} If neither profits nor actual damages are ascertained,
then under the dicta of Shapiro the award of statutory "in lieu" damages is
mandatory, although the amount of such recovery remains discretionary.
The foregoing interpretation of Woolworth and Shapiro provide the rules by
which the trial court will be guided in respect to "in lieu" damages on
remand of this case. On remand the trial court's first task is to determine,
if possible, the profits of the infringers. If these profits are
ascertainable, then plaintiffs are entitled to the larger of either
the profits or damages, unless the district court, in its discretion,
awards the statutory "in lieu" damages. If the profits are not
ascertainable, then plaintiffs are entitled to the compensatory damages
as found by the jury, unless the district court awards the discretionary
"in lieu" damages.
III.
Conclusion.
In view of the holdings set forth in both portions of this opinion the
judgment of the district court finding infringement is affirmed. The
district court's denial of plaintiffs' motion for an accounting is
reversed. The case is remanded for an accounting, after which the
district court may, in its discretion, award statutory "in lieu" damages.
Affirmed in part and Reversed in part.
DISSENT:
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. {nnn1}
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 (1940); Gordon v. Weir, 111 F. Supp. 117, 123
(E.D.Mich. 1953), aff'd, 216 F.2d 508 (6th 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 (2nd 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 majority 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 (1952); Thomas Wilson & Co. v. Irving J. Dorfman Co.,
433 F.2d 409, 413 (2nd Cir. 1970); Alouf v. Expansion Products, Inc.,
417 F.2d 767, 768 (2nd Cir. 1969); Peter Pan Fabrics, Inc. v. Jobela
Fabrics, Inc., 329 F.2d 194, 196 (2nd 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., 305 F. Supp. 339, 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). {nnn2}
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 [**73] 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.
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 (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 (9th Cir. 1966):
"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),
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 Arts, 344 U.S. 228, 234 (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 (9th
Cir.), cert. denied, 404 U.S. 887 (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 (2nd 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.94-473, 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 (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.
FOOTNOTES:
{n1} The Kroffts are fifth generation puppeteers who have been in the
entertainment industry in this country over 40 years. The evidence showed
that they enjoyed years of success with their puppet shows in cities around
the country -- most notably the Le Puppet de Paris adult puppet show. The
Kroffts created the characters for "The Banana Splits", a popular children's
television series produced by Hanna Barbera, before being asked to create
their own show.
{n2} On June 24, 1970, Needham made a presentation of a McDonaldland
advertising campaign to McDonald's. Needham was awarded the account by a
contract dated June 29, 1970. In July, three representatives of Needham
came to the Kroffts' offices in Los Angeles to discuss the design and
engineering work that would be required to produce the McDonaldland
commercials. It is evident, therefore, that Needham was deceiving the
Kroffts in their contacts after the June 29 contract.
{n3} The evidence reveals that certain persons with whom plaintiffs dealt
for licensing believed that the H. R. Pufnstuf characters were being
licensed to McDonald's for use in their McDonaldland campaign. Accordingly,
they did not pursue licensing arrangements for the characters themselves.
{n4} The complaint also contained claims for relief in unfair competition,
tortious interference, quasi-contract, and contract. The judgment and this
appeal are based solely on the copyright claim.
{n5} This is so because the prerequisites for copyright registration are
minimal. The work offered for registration need not be new, but only
original, i.e., the product of the registrant. Donald v. Uarco Business
Forms, 478 F.2d 764, 765-66 (8th Cir. 1973); Roth Greeting Cards v. United
Card Co., 429 F.2d 1106, 1109 (9th Cir. 1970). As stated in Alfred Bell &
Co. v. Catalda Fine Arts, 191 F.2d 99, 102-03 (2 Cir. 1951):
"'Original' in reference to a copyright work means that the particular
work 'owes its origin' to the 'author.' No large measure of novelty is
required. * * * * All that is needed to satisfy both the Constitution
and the statute is that the 'author' contributed something more than a
'merely trivial' variation, something recognizably 'his own.'
Originality in this context 'means little more than a prohibition of
actual copying.' No matter how poor artistically the 'author's'
addition, it is enough if it be his own" (citations omitted).
Of course, the scope of protection against infringement is not necessarily
coextensive with the scope of the copyright secured. See Puddu v. Buonamici
Statuary, Inc., 450 F.2d 401, 402 (2nd Cir. 1971).
{n6} The idea-expression dichotomy has been criticized by some commentators
as outmoded because it was developed under older, narrower statutes which
have since been considerably broadened. See, e.g., Collins, Some Obsolescent
Doctrines of the Law of Copyright, 1 S.Cal.L.Rev. 127 (1928); Umbreit, A
Consideration of Copyright, 87 U.Pa.L.Rev. 932 (1939); Note, Copyright
Protection for Mass-Produced Commercial Products: A Review of the Developments
Following Mazer v. Stein, 38 U.Chi.L.Rev. 807 (1971). Yet the distinction
accurately conceptualizes the fundamental elements in an artistic creation
and balances the competing interests inherent in the copyright law. We have
surveyed the literature and have found that no better formulation has been
devised. Moreover, most of these criticisms are directed at the fact that
the courts tend to pay only lipservice to the idea-expression distinction
without it being fairly descriptive of the results of modern cases. This
is a criticism more of the application of the distinction than of the
distinction itself, and can be alleviated by the courts being more
deliberate in their consideration of this issue.
{n7} The two-step approach of Arnstein does have its detractors. Judge
Moore in a Second Circuit case described this approach as "merely an
alternative way of formulating the issue of substantial certainty". Ideal
Toy Corp. v. Fab-Lu Ltd., 360 F.2d 1021, 1023 n.2 (2nd Cir. 1966). But the
approach certainly tends to decrease the importance of the trier of fact
in the first step and increase this importance in the second step. See
2 Nimmer Section 143.53 at 641-43. In this it represents a significant
modification of the older audience test. Id. We do not resurrect the
Arnstein approach today. Rather, we formulate an extrinsic-intrinsic test
for infringement based on the idea-expression dichotomy. We believe that
the Arnstein court was doing nearly the same thing. But the fact that it
may not have been does not subtract from our analysis.
{n8} McDonald's advertising campaign was divided into two distinct parts:
its general audience advertising and its children advertising. The
McDonaldland commercials were used exclusively on children's programming.
The apparent success of this format is suggested by the fact that the
McDonaldland commercials are still appearing on television over six years
after their introduction.
{n9} Even a dissection of the two works reveals their similarities. The
"Living Island" locale of Pufnstuf and "McDonaldland" are both imaginary
worlds inhabited by anthromorphic plants and animals and other fanciful
creatures. The dominant topographical features of the locales are the
same: trees, caves, a pond, a road, and a castle. Both works feature a
forest with talking trees that have human faces and characteristics.
The characters are also similar. Both lands are governed by mayors who have
disproportionately large round heads dominated by long wide mouths. They
are assisted by "Keystone cop" characters. Both lands feature strikingly
similar crazy scientists and a multi-armed evil creature.
It seems clear that such similarities go beyond merely that of the idea into
the area of expression. The use of the basic idea of the works does not
inevitably result in such similarities. Certainly a jury applying an
intrinsic test could find such similarities of expression substantial.
{n11} We are not at all certain what defendants mean by distinguishing
"things" from "dramatic works". They list statuettes, dolls, pictures,
and jewelry as being "things". We assume this broad category would include
fine paintings and sculpture, which surely are not "dramatic works". To
suggest that such works must be identically copied to be infringed shows
the spuriousness of the distinction. Moreover, defendants' cited cases
do not lend any support to their contention. They find infringement where
there have been identical copies made. This does not suggest that
infringement would not have been found if only substantially similar
copies were made.
{n12} We also note that the jury was specifically instructed to consider
the works as a whole. Instruction No. 17, requested by the defendants
themselves, read:
"In comparing the PUFNSTUF series and the McDonaldland commercials
to determine whether there has been copyright infringement, you must
consider and compare each of the works as a whole. That is, you must
not simply focus on isolated elements of each work to the exclusion of
the other elements, combination of elements, and expressions therein."
This instruction properly warned the jury against analytic dissection in
accordance with Arnstein and our opinion today.
{n13} One measure of infringement used in the past has been the effect
of the allegedly infringing work on the value of the original. As this
court said in Universal Pictures Co., Inc. v. Harold Lloyd Corp., 162 F.2d
354, 361 (9th Cir. 1947):
"To constitute an invasion of copyright it is not necessary that
the whole of a work should be copied, nor even a large portion of it
in form or substance, but that, if so much is taken that the value of
the original is sensibly diminished, or the labors of the original
author are substantially, to an injurious extent, appropriated by
another, that is sufficient to constitute infringement."
The record shows that the value of the H.R. Pufnstuf series, particularly as
regards to its merchandising potential, was sizeably diminished after the
McDonaldland commercials appeared. While we do not think that infringement
should be so objectively measured, it is another indication of infringement
here.
{n14} We note that this First Amendment argument was never raised in
the court below and is asserted here for the first time. Plaintiffs
suggest that it may not therefore be considered. See Frommhagen v. Klein,
456 F.2d 1391, 1395 (9th Cir. 1972); Simpson v. Union Oil Co., 411 F.2d 897,
900-01 (9th Cir.), rev'd on other grounds, 396 U.S. 13 (1969). Since the
asserted constitutional claims would affect not only the standard of review
but our infringement tests, however, we exercise our discretion to consider
the arguments. See Hormel v. Helvering, 312 U.S. 552, 556 (1941).
{n15} In Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, and Corp. v.
Day-Brite Lighting, Inc., 376 U.S. 234 (1964), the court reasoned that in
an economy based on free competition, the constitutionality authorized
monopolies of patent and copyright must be strictly construed. It therefore
found invalid state doctrines of unfair competition which expanded these
monopolies. The court's concern was with monopolies as commercial, not
political, impediments, and thus it did not reach First Amendment
considerations. See also Lee v. Runge, 404 U.S. 887, 892-93 (1971)
(Douglas, J., dissenting).
{n16} This exception to the rule that First Amendment considerations do not
operate to limit copyright protection was suggested by Professor Nimmer.
Nimmer, Does Copyright Abridge the First Amendment Guarantees of Free
Speech and Press?, 17 U.C.L.A.L.Rev. 1180, 1199 (1970). He suggests a
system of compulsory licensing for "news photographs", which he defines
as all products of the photographic and analogous processes (including
motion pictures and video tape but excluding paintings, sculpture, and
the like) depicting an event which was the subject of news stories
appearing in the press. He gives the photographs of the My Lai massacre
as an example.
{n17} In Rosemont Enterprises, Inc. v. Random House, Inc., 366 F.2d 303
(2nd Cir. 1966), Howard Hughes attempted to enjoin Random House from
publishing a biography of Hughes. The biography was based on information
contained in a series of articles appearing in Look magazine over which
Hughes (via Rosemont) held a copyright. Had the biography merely attempted
to use the information in the articles we would agree with the Second
Circuit's refusal to enjoin because such information represents the
"idea" of a biography on Hughes. But the Random House biography copied
verbatim almost 27% of one of the Look articles and 14% of all of the
articles. Rosemont Enterprises, Inc. v. Random House, Inc., 256 F. Supp.
55, 61 (S.D.N.Y.1966). We believe this represents an unjustifiable
appropriation of the expression of the idea, and hence disapprove of
the result in Rosemont. Because there are available alternatives in the
form of expressing any verbal ideas, First Amendment considerations
should not limit copyright protection in this area. We need not reach
this precise issue today, however, since it is clear that neither the
H.R. Pufnstuf series nor McDonaldland commercials are newsworthy.
{n18} Later, while discussing a proposed jury instruction, counsel for
defendants commented:
"To say that the jury could consider the profits of McDonald's
corporation as an element of damages here I think would be totally
improper, and the same with Needham, Harper & Steers."
We do not believe that defendants should now be permitted to ignore the
difference between damages and profits when they clearly recognized this
difference during trial.
{n19} While discussing proposed jury instruction No. 26, the following
colloquy took place:
"THE COURT: 'It is agreed, insofar as instruction No. 26, that the
profits -- '
"MR. BERMAN (Counsel for plaintiffs): 'I beg your pardon, sir?'
"THE COURT: 'Let's return to 26.'
"MR. BERMAN: 'Yes.'
"THE COURT: 'It is agreed that the profits of the defendants are
not to be considered by the jury in determining the plaintiffs'
money-damages claim?'
"MR. BERMAN: 'It's our position that's a question for the Court if
a favorable verdict on the infringement claim is returned.'
"THE COURT: 'Mr. Liebig.'
"MR. LIEBIG [counsel for defendants]:
'Well, the problem, of course, in that thing, I want to discuss it
with the Court. In the ordinary context of the copyright case, of
course, the defendant, infringer, publishes a book, and either he
makes money or he doesn't make money selling that book. Now, in that
sort of a situation profits are allowable. Now, I would suppose that
the rule would be translated into this case if somehow you could
identify a profit with an infringement, but to say that the jury could
consider the profits of McDonald's corporation as an element of
damages here I think would be totally improper, and the same with
Needham, Harper & Steers. You get into the area of corporate profits,
the -- let's see, that's --'
"THE COURT: 'Let's proceed. 27.'"
{n20} This same distinction is recognized in patent cases. For example,
in Atlas-Pacific Engineering Co. v. Ashlock, 339 F.2d 288, 290 (9th Cir.
1964), cert. denied, 382 U.S. 842 (1965), this court recognized:
"There is a variety of possible elements of damages for patent
infringement, such as the profits made by the infringer, the actual
damage to the patentee . . . . or a reasonable royalty . . . ."
{n21} Defendants contend, for example, that an Exhibit No. 52 was submitted
listing all of Needham's commissions derived from production of the
McDonaldland commercials from 1971 to 1973. No such exhibit appears in
the record. A document numbered 112 contains this information but was
not offered or received in evidence. What attention plaintiffs brought
to the commissions of Needham arose from the claim for breach of contract,
not copyright infringement. And certainly nothing was ever said or
submitted regarding the amount of McDonald's profits.
{n22} The Court in Dairy Queen did make an exception to its right to jury
rule, where "the 'accounts between the parties' are of such a 'complicated
nature' that only a court of equity can satisfactorily unravel them."
369 U.S. at 478. Plaintiffs claim that the complex nature of the accounting
process in this case bars jury consideration under this reasoning. We
disagree. The mere fact that corporate profits are so indirectly related
to the infringement as to make an accounting impossible does not make the
case complicated. As the Supreme Court noted, it will be a "rare case"
where a jury could not adequately handle the issue. Id. This is not such
a case.
{nn1} Compare Universal Pictures Co. v. Harold Lloyd Corp., 162 F.2d 354
(9th Cir. 1947) and Gordon v. Weir, 111 F. Supp. 117 (E.D.Mich. 1953)
aff'd 216 F.2d 508 (6th Cir. 1954) with Thomas Wilson & Co. v. Irving J.
Dorfman Co., 433 F.2d 409 (2d Cir. 1970), cert. denied, 401 U.S. 977 (1971)
and Gelles-Widmer Co. v. Milton Bradley Co., 132 U.S.P.Q. 30 (N.D.Ill. 1961),
aff'd, 313 F.2d 143 (7th Cir.), cert. denied, 373 U.S. 913 (1963).
{nn2} The Act provides that an infringer shall be liable for "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 . . . ." 17 U.S.C. 101(b).
{nn3} H.R.Rep.No.2222, 60th Cong., 2d Sess. 15 (1909) states:
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.
{nn4} In addition, subsequent to Shapiro, this circuit affirmed an award
of only the larger of damages and profits. Runge v. Lee, 441 F.2d 579
(9th Cir.), cert. denied, 404 U.S. 887 (1971). In Runge, the trial court
elected to award compensatory damages in the amount of $80,000.00 instead
of the profits of the infringer which amounted to $64,253.00. This court
held that such an election was within the trial court's discretion, citing
Universal Pictures, with no mention of Shapiro.
{nn5} Section 101(b) of 17 U.S.C. states in part:
Or in lieu of actual damages and profits, such damages as to the court
shall appear to be just, and in assessing such damages the court may,
in its discretion, allow the amounts hereinafter stated . . . . and
such damages shall in no other case exceed the sum of $5,000 nor be
less than the sum of $250, and shall not be regarded as a penalty . .
. . But the foregoing exceptions shall not deprive the copyright
proprietor of any other remedy given him under the law, nor shall
the limitation as to the amount of recovery apply to infringements
occurring after the actual notice to a defendant, either by service of
process in a suit or other written notice served upon him . . . ."
{nn6} The Court in Woolworth also noted that the district court has the
discretion to award "in lieu" damages when both profits and actual damages
have been proved.
The statute has been interpreted to vest in the trial court broad
discretion to determine whether it is more just to allow a recovery
based on calculation of actual damages and profits, as found from
evidence, or one based on a necessarily somewhat arbitrary estimate
within the limits permitted by the Act.
344 U.S. at 231-32.
{nn7} We assume that any such award of "in lieu" damages would exceed
the amount of any ascertained damages or profits. Under no circumstances
can an award of "in lieu" damages less than the amount of the ascertained
damages or profits deprive the aggrieved party of his right to the greater
of damages or profits, when both are ascertained, or the greater damages
or profits, when only one is ascertained. In brief, an award of "in lieu"
damages can only benefit, but not hurt, the aggrieved party.
{nnn1}
"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 (9th 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.
{nnn2} 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).