Overton v. Health Communications, Inc. et al

Filing 146

ORDER regarding damages. Signed by District Judge William M. Conley on 3/9/12. (Attachments: # 1 amended proposed jury instructions) (krj)

CLOSING INSTRUCTIONS ON DAMAGES
1. Summaries of Evidence
In this case, you have been presented with financial information about the costs of
printing and distributing A Cup of Chicken Soup for the Soul, and the royalties paid to the
authors.

For the sake of convenience, you were not presented with the defendants’

original records, but rather with summaries of the evidence. To the extend disputed, the
original material used to create those summaries are also in evidence. It is up to you to
decide if the disputed summaries are accurate.
2. Damages Generally
[In awarding damages you must only consider plaintiff’s damages and defendants’
profits that occurred between November 17, 2007 and the present.]1
[In awarding damages, you must consider all damages that occurred from the time
defendant(s) began infringing until the present.]2
At the damages phase, plaintiff continues to have the burden of proof. For certain
damages calculations, however, if plaintiff proves some amount of damages, defendants
may prove that those damages should be less. In these rare instances, I will explain to
you that defendants have the burden of proving something. What is key to remember is
that the party with the burden of proof – whether plaintiff or defendant -- must convince
you by a preponderance of evidence, meaning that something is more likely than not.

1

If jury finds that plaintiff knew or should have known about defendants’ infringement before
November 17, 2007.
2
If jury finds that plaintiff did not know, and need not have known, about defendants’ infringement
before November 17, 2007. (See Court’s Summary Judgment Opinion, dkt. #98, pp. 18-19.)

[In a copyright case, a plaintiff may choose to receive an award based on his actual
losses, or, alternatively, based on an amount called “statutory damages.” I will define
these terms in the following instructions. [7th Cir. 12.8.1] Accordingly, you must decide
on an award for both actual and statutory damages, answering each question without
regard to the other. In other words, you must first decide actual damages. Then, you
must decide statutory damages, putting the amount you awarded for actual damages
completely out of mind. The plaintiff will choose only one. Under either award, there is
no place here for punitive damages (damages designed to punish a defendant), and you
should not award any. [Nimmer §14.02[C][3]]
3. Actual Damages
a. Monetary Harm to Plaintiff
When you are asked to calculate monetary harm, you must add up all money and
potential income that you reasonably believe has been lost by plaintiff because of the
infringement. Examples of monetary harm from copyright infringement include:
-

A decrease in the market value of the copyrighted work caused by
the infringement.

-

Profits that plaintiff proves he would have made without the
infringement. Profits are the revenue plaintiff would have made on
sales he would have made without the infringement, less any
additional expenses he would have incurred in making the sales.

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-

What a willing buyer reasonably would have paid plaintiff to obtain
a license to copy, use or sell plaintiff’s copyrighted work.

[7th

Circuit Jury Instructions 12.8.2]
A plaintiff claiming lost revenues as monetary harm has the burden of establishing
the existence of a causal connection between defendants’ infringement and the plaintiff’s
loss of anticipated revenue. [Nimmer § 14.02[A][1]].
You should determine the total amount of harm as to each of the two acts of
infringement: first, the Chicken Soup book (question 1), and second, the American
Greetings cards (question 3). For each act of infringement, you should also allocate the
harm among the defendants based on their culpability.

b. Defendants’ Profits
In addition to recovering for his monetary harm, plaintiff is entitled to recover the
profits that a defendant made because of the infringement. A defendant’s profits are
recoverable, however, only to the extent that you have not taken them into account in
determining plaintiff’s monetary harm.
A defendant’s profits are the revenues that the defendant made because of the
infringement, minus the defendant’s expenses in creating, producing, distributing,
marketing, and selling the infringing products. Plaintiff need only prove the amount of a
defendant’s total revenues from an infringing product.

Defendant must prove what

portion of that revenue is profit -- in other words, it must prove its own expenses in
creating and selling the product. Defendant may also prove that a portion of its profit
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resulted from factors other than the use of plaintiff’s copyrighted work in the product.
[7th Circuit Jury Instructions 12.8.3]
When calculating the profits earned by a book publisher, royalties paid to the
author are deductible from revenue as expenses. So is the share of the publisher’s costs,
such as electricity and shipping fees, attributable to producing the infringing works.
However, fixed costs, such as rent on buildings or salaries of regular employees, that
would have to be paid anyway whether defendants produced the infringing work or not,
are not deductible. Defendants have the burden of proof.
If a defendant seeks to distinguish between profits that were gained as a result of
using the “Faith” poem in the infringing work, and profits it would have earned without
using that poem, it must provide evidence sufficient to provide a fair basis of division.
Here, defendants have the burden of proof. This evidence need not be mathematically
exact, but it must allow for a reasonable approximation. A defendant’s burden is to
demonstrate the absence of a causal link between the infringement and all or part of the
profits generated by the infringing work. To this end, it may seek to show that customers
would have purchased the infringing work even without the poem, because of other
positive attributes of the work, such as its non-infringing content or the fame of the
authors and the series. Defendants have the burden of proof.

4. Statutory Damages
Statutory damages are an alternative to the award of actual damages. You may
award as statutory damages an amount that you find to be fair under the circumstances.
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The amount must be between [$750 and $30,000] [$750 and $150,000].3 You should
allocate the amount you choose among the defendants based on their culpability.
In determining the appropriate amount to award, you may consider the following
factors:
- the expenses that one or more defendants saved and the profits that they earned
because of the infringement;
- the revenues that plaintiff lost because of the infringement;
- the difficulty of proving plaintiff’s actual damages;
- the circumstances of the infringement;
- whether one or more defendants intentionally infringed plaintiff’s copyright; and
- deterrence of future infringement. [7th Circuit Jury Instructions 12.8.4]

3

Depending on whether the jury finds that defendants willfully infringed.

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