Maximizing Infringement Damages

Frequently, infringement claims are brought under both the Copyright Act and the Lanham Act based on the same allegedly infringing activity. For example, sales of unauthorized concert T-shirts featuring a copy of the Rolling Stones’ famous tongue logo could constitute both copyright infringement (because the T-shirts contained copies of the copyright-protected logo) and trademark infringement (because use of the logo may cause consumers to believe the T-shirts were authorized by the Rolling Stones). Likewise, “knockoff” bags featuring designs modeled after Louis Vuitton’s famous monogram pattern could infringe both the company’s registered copyright and registered trade dress in the pattern. Subtle distinctions between the Copyright Act and Lanham Act damages statutes and Ninth Circuit case law will largely dictate the litigation strategy a plaintiff should implement in order to maximize potential recovery, particularly when seeking statutory damages under the Copyright Act, and attorney fees. An introduction to several of these considerations follows:

Actual Damages and Defendant’s Profits

Statutes authorizing damages under both the Copyright Act (17 U.S.C. §504) and Lanham Act (15 U.S.C. §1117) each allow recovery of any actual damages suffered by the plaintiff and any profits of the defendant attributable to the infringement. However, under either act, plaintiff’s actual damages suffered and defendant’s profits are not both recoverable, to the extent these remedies overlap. An example would be if the plaintiff alleges $10 in lost profits because a consumer bought the defendant’s product instead of the plaintiff’s (commonly referred to as “switching” behavior), while the defendant earned $5 in profits on that infringing sale, a maximum of $10 would be recoverable, not $15, as the defendant’s $5 profit is subsumed in the calculation of plaintiff’s lost profits. As an alternative to seeking actual damages and defendant’s profits, both acts also authorize a plaintiff to elect statutory damages — in cases involving registered copyrights under the Copyright Act, and in cases involving counterfeiting of a registered mark under the Lanham Act.

Statutory Damages