Re: Re: Responsibility for an insert...

At 11:20 AM -0400 5/3/06, Jim Donohue wrote:
>You confuse what business we are in. The normal rule of thumb is
>that an advertisement should produce 15 to 20 times its cost in
>revenue. So say the maps he lifted are worth $1.00 each. That is
>$7700.

Then that's your damages before you "filter" the unprotectible elements of the map, e.g. the streets and the golf course. Now what is the map worth? You are only entitled to the value of your copyright, and your copyright only covers your original and creative contribution. Assuming the maps are worth $1, nearly all of that value is in the unprotectible elements of the work. As they say in your business -- location, location, location -- that's the value of a map, and it's not protected by copyright.

>The revenue produced is $115,000. Now we are talking interesting money.

There is precedent for measuring damages by the infringer's profits, rather than the copyright owner's loss, but the theory is premised on the assumption that they are the same -- that the profit on an infringing distribution would have gone to the copyright holder, "but for" the infringement. It works, more or less, when the profits are in the revenues directly produced by the infringing work. If he sold 7700 copies for $1, because that's what they are "worth," he would have gross revenues of $7700. Assuming a negligible cost of production and distribution, that might be a $7500 profit. But in this case you would still have to allocate that profit between the protectible and unprotectible elements of the work. The "worth" of a map without streets, i.e. the "worth" of your original contribution is next to nothing. (Don't get me wrong. It's a good idea -- a valuable idea for an advertisement for a real estate agency -- but the idea isn't protected by the copyright.)

However, I cannot imagine a court using the infringer's indirect profits as a measure of damages for infringement. Even setting aside the problem of allocating the profits between protectible (5%?) and unprotectible (95%?) elements of the work, you are converting consequential profits into consequential damages, i.e., you are assuming that his profits would have been yours "but for" the infringement. I'm sure you see the problem. He was making $1,000,000 million per year before he used your map. Even if you can attribute the increase in next year's profit of $1,115,000 to the infringement, in order to call that $115,000 YOUR damages, we would have to assume that you would have gotten the listings, and made the sales (if the $115,000 represents the income on a 6% commission, we're talking about $2 million in sales). If you take the infringement factor out, that business gets spread between the agents who usually divide up the market, presumably in the same shares as usual. If there are only two of you, and you're running even, you split it $57,500 apiece. If he outsells you 10 to 1, even without the infringement, he's probably going to get $103,500 to your $11,500. If there are half a dozen agents working that community, you're going to split it up half a dozen ways. Following me? Measuring plaintiff's damages by the defendant's profits is always problematic because there are other inputs, like marketing and distribution and reputation. If you stole my unpublished novel and submitted to a publisher, it would probably get rejected (again). If Elmore Leonard submitted it, he'd get a $100,000 advance, another $250,000 for the movie rights, a first printing of 50,000 copies, an expensive marketing campaign, and a place on the bestseller list (in my imagination).

> Note also that I need only prove how much money he made. He has
>to defend that the money did not come from use of the map.

The hell he does. You're the plaintiff. You have to prove damages. A prima facie claim of infringement doesn't shift the burden of proof on damages.

So what do we have? Let's set everything else aside, and give you the benefit of every inference, and qualify you as an industry expert who offers unchallenged testimony: "The normal rule of thumb is that an advertisement should produce 15 to 20 times its cost in revenue." Unfortunately, we need another expert to do the math. "So say the maps he lifted are worth $1.00 each." No, you just testified that they're worth 15 to 20 times cost. The cost is in the creation and placement of the ad. We have an $800 cost for placement in the community newsletter, and we're going pretend we agreed to pay you (the Elmore Leonard of the advertising world) $800 to add original and creative elements to the map. That's a $1,600 cost, and at the high end (X 20), a $32,000 profit. Taking it back to copyright, we can argue about how much of that is attributable to the protectible elements copyrighted work, and how much is attributable to the unprotectible elements; but we know that half of it is attributable to the placement.

You indicated off-list that your original post had two specific questions. I answered the first -- no, you can't make the home owners association retrieve the unauthorized copies.

The other question was whether you have a claim against the design shop. The answer is theoretically yes. However, their infringement is unauthorized copying, not the distribution. Their profit was probably something less than the $800 we decided to pay you, and it's not YOUR damage in any event. They are not responsible for the unauthorized distribution that generated the imaginary home sales of either $2 million or $533,000 that generated your damages of either $115,000 or $32,000 in lost commissions. The value of whatever protectible elements they may have copied from your map is, as I said above, probably next to nothing.

Like I said before, it's my opinion, not my advice. My advice is to talk to your own lawyer.

John Noble Received on Thu May 04 2006 - 21:55:01 GMT