Short Circuit: Payday for Infringers
In 1996, an amateur artist named Frederick Bouchat designed a logo for the Baltimore Ravens that the club later adopted as a team symbol without his awareness. The infringing symbol then appeared on Ravens merchandise sold at home football games. After winning on copyright liability in the District Court of Maryland, Bouchat pressed for disgorgement of defendant profits, which is an allowable financial remedy under the Copyright Act.
Bouchat got nothing. The District Court ruled in 2002 that the transacted merchandise payments were based on contracts signed before the actual logo was chosen.[1] In the District Court’s view, there was no demonstrable causal connection between the later infringement and the profit enrichments related to these contracts. The Fourth Circuit upheld in 2004.[2]
Judge James Whittemore of the Middle District of Florida reviewed in 2008 the Bouchat decisions and other related decisions in an independent copyright matter of Thornton v. J Jargon, Co.[3] Here the infringing work before Judge Whittemore was an offbeat quiz that appeared in a playbill that was distributed every night at a live theater production of Menopause: The Musical. As no audience member conceivably could have bought tickets to the show with an awareness of the contents of the playbill, the defense claimed that there was no causal connection between the theater’s infringement and the dollars earned and thus sought summary judgment.
With no precedent in the Eleventh Circuit, Judge Whittemore considered equity and Congressional intent behind the Copyright Act to favor an alternative view – reasonable relationship – that avoided the questionable decision in Bouchat. In Judge Whittemore’s view, the producers of the musical were obliged under Actors’ Equity rules to distribute a playbill; no bill, no show. In meeting a contract requirement for the theater production, the producers were then responsible for all components of its execution. Citing On Davis v. The Gap, Inc., 246 F.3d 152 (2d Cir. 2001), Judge Whittemore saw then a reasonable relationship between contents of the playbill (i.e., the infringing work) and – subject to apportionment over infringing and non-infringing elements — subsequent profits of the theater production. But apportionment is the defendant’s burden to prove, and cannot be dodged in the summary judgment that defendant sought.
Bouchat came back to haunt in the cases of Fahmy v. Jay-Z, et. al[4] and Marino v. Usher, et. al.[5] When confronted with the possibility that one of their concert songs was infringing, both Jay-Z and Usher separately invoked Bouchat to argue that they were paid largely through guarantees in negotiated contracts that did not specify any specific playlist or song as a condition for signature. Moreover, fans did not know the playlists before the concert – hence no causal connection between the purported infringement and concert revenues.
So now we can imagine the scene. Using the causal connection, how would you prove without speculation that totemic film songs like Over the Rainbow, Gonna Fly Now, and My Heart Will Go On actually increased ticket sales for movies like The Wizard of Oz, Rocky, and Titanic.
Forget the causal connection. To my mind, each song yet qualifies for remedy under Judge Whittemore’s reasonable relationship. Music is synchronized into a film in post-production after contracts have been signed. Nonetheless, parties to a movie contract must put forth best effort in the performance of their efforts, and the choice of any component of a soundtrack is certainly part of the expected effort. The song is then commingled in the final product that earned attracted audiences for the defendant. The defendant bears the statutory responsibility of apportioning the respective value of the infringing and non-infringing elements that are components of profits.
And what would the Supreme Court say? A stated concern in Sony Corp. of Am. v. Universal City Studios, Inc., et. al.[6] concerned possible market harm arising from overly generous allowances for fair use – the Court invoked the consequences of behavior writ large. “Isolated instances of minor infringements, when multiplied many times, become in the aggregate a major inroad on copyright that must be prevented.”[7] I would suggest that Judge Whittemore’s decision is consistent with this critical point made by the nation’s High Court and deserving of national recognition.
Michael A. Einhorn, Ph.D. is an economic consultant and expert witness in the areas of intellectual property, media, entertainment, technology, cyberspace, , and product design. Dr. Einhorn is the author of Media, Technology, and Copyright: Integrating Law and Economics (Edward Elgar Publishers, 2004). He is also a former professor of economics at Rutgers University a Senior Research Fellow at the Columbia Institute for Tele-Information, and the author of seventy professional and academic articles related to intellectual property and economic analysis. More detail on this topic can be found at his recently published article Copyright, Causality, and the Courts and “Copyright Settlement Strategies from a Damages Expert”.
Dr. Einhorn may be reached at mae@mediatechcopy.com, 973-618-1212.
[1] Bouchat v. Baltimore Ravens, Inc. et. al., 215 F. Supp. 2d 611 (D. Maryland 2002).
[2] Bouchat v. Baltimore Ravens Football Club, Inc. et. al., 346 F.3d 514 (4th Cir. 2003).
[3] 580 F. Supp. 2d 1261 (M.D. Fla. 2008).
[4] 835 F. Supp. 2d 783 (C.D. Cal. 2011).
[5] 22 F. Supp. 3d 437 (E.D. Pa. 2014).
[6] 464 U.S. 417, 451 (1984).
[7] Id. at 482 (internal citations omitted).
