Attorney Steve® - Copyright Law Essentials. A look at factors to consider/argue when settling a photo or copyright image case.
What is the Fair Market Value?
Like anything else in life (buying a banana in the marketplace or a baseball card), Fair Market Value (FMV) can seem to be a bit arbitrary. However there is some case law in the realm of Copyright Law that seeks to provide some guidance on what a photo infringement case should or might settle for. I do not see this as an exact science, but by applying the case law and reviewing the factors courts may look at (if the case cannot be settled out of court and moves to litigation)
In one case, Davis v. Gap, Inc., 246 F.3d 152, 167 (2d Cir. 2001) the Court discussed that the issue is not so much what another photographer would be willing to sell a different license for a different image but what THIS seller is willing to accept for THE USE at issue. The Court noted:
Once the copyright owner shows a connection between infringement and damage, uncertainty about the amount of damages will not bar an award."); Szekely, 242 F.2d at 269 (where "legal injury is certain... [w]e should not allow difficulty in ascertaining precisely the value of the right destroyed, which difficulty arises largely from the destruction, to enable the infringer to escape without compensating the owner of the right"
However, the FMV for a license is also only one factor among several in determining the Statutory Damages in copyright. There are other things which should be examined. This case also gave a number of other examples which may be worth reviewing as legal precedent and is wroth a read.
For example Courts looked to other cases including architectural infringement:
- In Encyclopedia Brown, a cable television company and various cable operators infringed on the plaintiff's television program. The district court rejected the defendants' argument that the plaintiff's claim for a reasonable license fee was not cognizable as a matter of law. The court reasoned that if the lost sale of a product to a third party customer constitutes "actual damages," then the lost sale of a license to a defendant who, absent the infringement would have paid for a license, may constitute "actual damages" as well. See Encyclopedia Brown, 25 F. Supp. 2d at 399-402. The court found authorization for such an award in Koons. See Encyclopedia Brown, 25 F. Supp. 2d at 401 (quoting Koons, 960 F.2d at 313).
- In Kleier Adver., Inc. v. Premier Pontiac, Inc., 1039 (10th Cir. 1990), the defendant automobile dealership infringed for twenty-two months upon an advertising agency's syndicated advertising program. The Tenth Circuit upheld the jury's award of damages, concluding that the jury had intended an award of actual damages that represented the plaintiff's lost license fees over the twenty-two month period. See id. at 1040.
- In Sid & Marty Krofft Television Prods. Inc. v. McDonald's Corp., 562 F.2d 1157, 1174 (9th Cir. 1977), where the defendant had produced commercials infringing on the plaintiff's television show, the Ninth Circuit approved a jury instruction that allowed the jury to award an amount approximating "what a willing buyer would have been reasonably required to pay to a willing seller for plaintiffs' work."
- Szekely, Abeshouse, and Koons are supported by the decisions of other Circuits, as well as district courts. In Nucor Corp. v. Tennessee Forging Steel Serv., Inc., 152 (8th Cir. 1975), a 1909 Act case, the defendant infringed on the plaintiff's architectural plans. After a trial on damages, the jury returned with a verdict of no damages. See id. On appeal, the Eighth Circuit held that the district court had erred by failing to instruct the jury that the defendants were liable for the "fair value," or market value, of the infringed plans. See id. at 153 & n.3.
- In Aitken, Hazen, Hoffman, Miller, P.C. v. Empire Constr. Co., 542 F. Supp. 252 (D. Neb. 1982) the defendant construction company, after first engaging the plaintiff architectural firm to design an apartment complex, subsequently copied and used the plaintiff's plans in construction of an apartment complex on a neighboring parcel of land. The court determined that the fair market value of the modified architectural plans was the relevant measure for actual damages, and calculated that amount by determining "the amount [defendant] would reasonably have paid to the plaintiff and the plaintiff would reasonably have expected to receive for the revision and use of the [first set of] plans." Id. at 263. In Kleier Adver. Co. v. James Miller Chevrolet, Inc., 722 F. Supp. 1544, 1546 (N.D. Ill. 1989), where the facts were similar to the Tenth Circuit's Kleier case cited above, the court awarded lost license fees, which it characterized as "actual damages," as well as the infringer's profits. See also Curtis v. General Dynamics Corp., No. C89-566S, 1990 WL 302725, at *11 (W.D. Wash. Sept. 26, 1990) (awarding plaintiff photographer the fee he would have been paid had defendant hired him instead of infringing his copyright); Bishop v. Wick, No. 88 C 6369, 1988 WL 166652, at *5 (N.D. Ill. Dec. 29, 1988) ("Plaintiffs shall recover the fair market value of the [infringed computer program] in an amount equal to the ordinary licensing fees charged to licensees of plaintiffs, multiplied by each time that defendants illegally copied or utilized the [program]." (emphasis omitted)); Sherry Mfg. Co. v. Towel King, 220 U.S.P.Q. 855, 859 (S.D. Fla. 1983) (awarding actual damages based on reasonable royalty which should have been paid for license to use infringed design), rev'd on other grounds,(11th Cir. 1985).
Bryant v. Media Right Productions, Inc., 603 F.3d 135, 144 (2d Cir. 2010)
This is another case that can shed some light on the proper measure of damages in a photo infringement case. In this case, the Court noted several important factors:
"When determining the amount of statutory damages to award for copyright infringement, courts consider:
(1) the infringer's state of mind;
(2) the expenses saved, and profits earned, by the infringer;
(3) the revenue lost by the copyright holder;
(4) the deterrent effect on the infringer and third parties;
(5) the infringer's cooperation in providing evidence concerning the value of the infringing material;
(6) the conduct and attitude of the parties.”),
This type of approach can allow many opportunities for argument and analysis.
1202 violations can lead to additional damages
Another charge or allegation that may often be made in the context of a copyright infringement claim is "Removing Copyright Management Information" from the Work so that the artist rights holder does not get the credit (called "CMI" or "Copyright Mark"). This is against federal law under 17 USC 1202(b) which states:
17 U.S. Code § 1202. Integrity of copyright management information
(c) Definition.—As used in this section, the term “copyright management information” means any of the following information conveyed in connection with copies or phonorecords of a work or performances or displays of a work, including in digital form, except that such term does not include any personally identifying information about a user of a work or of a copy, phonorecord, performance, or display of a work:
(1) The title and other information identifying the work, including the information set forth on a notice of copyright.
(2) The name of, and other identifying information about, the author of a work.
(3) The name of, and other identifying information about, the copyright owner of the work, including the information set forth in a notice of copyright.
The minimum award of damages for a claim such as this could be $2,500. See 17 USC 1203. Adding all this up, and analyzing and applying the factors is not an easy task, but with some work, a sensible figure should arise. Bear in mind, an attorney fee may be appropriate where the work was registered prior to infringement or within three months of publication of the work.
Contact a Photo Infringement Law Firm
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