Re: Copyright and Contract Damages for Inadvertent Software

On Tue, 21 Apr 1998, Michael Sobel <msobel[_at_]gj.com> wrote:
>
> Has anyone come across any law concerning what damages (if any) might
> be due for the inadvertent distribution of another's software, where
> no harm results?
>
> For example: A & B enter into an agreement whereby B is to pay A
> a license fee for every copy of A's programming code that B
> incorporates into its own software and sends to customers. An innocent
> screw-up occurs (essentially, someone presses the wrong button) and B
> inadvertently includes some of A's code (inoperative to the customers)
> in software packages sent to customers. As soon as this is detected,
> all of the inadvertently shipped code is retrieved. In the end, B
> did not benefit from the screw-up (e.g., customers were not charged
> more for the screwed-up version of the software), the customers did
> not benefit from it (indeed, most--if not all--did not know that the
> wrongfully shipped code was even there, and the customers were not
> capable of using the code), and A did not lose any sales.
>
> Is anyone aware of any authority in these circumstances as to whether
> copyright damages or breach of contract damages (such as contract
> license fees) would be due/not due? (Of course, the facts also would
> affect what a jury might award in copyright statutory damages as well.)

On these facts, if there are no lost profits and if B made no profits attributable to the infringement, I think the only recourse may be statutory damages. If my recollection is accurate, however, Deltak, Inc. v. Advanced Systems, Inc., 767 F.2d 357, 363 (7th Cir. 1985), suggests that it might be appropriate to award the plaintiff a hypothetical royalty for the defendant's interim use (which in your hypo would probably be a minimal amount, though probably something); but that Business Trends Analysts, Inc. v. Freedonia Group, Inc., 887 F.2d 399, 404-07 (2d Cir. 1989), goes the other way.

Thomas F. Cotter
Associate Professor of Law
University of Florida College of Law
Gainesville, Florida 32611-7625
(352) 392-2235 (office)
(352) 392-3005 (fax)
cotter[_at_]law.ufl.edu Received on Wed Apr 22 1998 - 12:42:42 GMT