Page 125 - Intellectual Property Disputes

Applying the market value test, a number of courts have determined the value to the infringer for the use
of the copyrighted work, rather than the value a willing buyer and willing seller would have negotiated.
Although this difference may at first seem semantic, it can make a substantial difference in the
determination of value.

Two instances in which the market value measure of the copyright owner’s damages is generally
employed are, namely, (1) if the defendant infringer or defendant’s infringement has harmed the
reputation or the value of the copyrighted work for a particular market or (2) if (a) the defendant has
made no profits from the infringement, (b) the copyright owner has no proven lost sales, and (c) the
circumstances of the market make the probability of a negotiated license unlikely. fn 68

The copyright owner’s actual damages may consider the "extent to which the market value of the
copyrighted work at the time of infringement has been injured or destroyed by the infringement." fn 69
This concept was applied in Montgomery v. Noga. In that case, actual damages for infringement of a
copyrighted computer program were awarded based on the impact of the infringement on the value of an
unregistered version of the program that had been derived from the copyrighted program. The court
ruled that in determining the magnitude of the injury to the value of the registered copyright at the time
of infringement, the value of the protected program would not be determined solely by reference to the
market value of the copyrighted program as a stand-alone product. fn 70

The decline in market value in trademark cases can take the form of a loss in plaintiff’s goodwill. Such
damage may not be limited to specific actual damages on infringed products but may extend to the
plaintiff’s entire business through actions of the defendant, such as disparaging advertising or the selling
of inferior infringing goods that become associated with plaintiff’s quality and reputation. The
quantification of lost goodwill often involves an examination of the value of plaintiff’s goodwill but for
the accused acts compared to the current value. The burden for proving lost goodwill is typically high
because such claims amount to the economic equivalent of lost future profits attributable to the
infringement. In DC Comics, the court found lost goodwill too speculative because the evidence showed
that plaintiff's television and licensing programs were successful after the infringement, thus, negating
the inference of harm to goodwill. fn 71

Statutory Damages

Statutory Damages for Counterfeit Trademarks

In cases involving the use of a counterfeit trademark, the plaintiff may elect, prior to the court rendering
final judgment, to recover not less than $500 nor more than $100,000 per counterfeit mark per type of
goods or services sold, offered for sale, or distributed, as the court considers just. fn 72 Alternatively, if

fn 68 S.A. Edelman and Terence P. Ross, Intellectual Property Law Damages and Remedies: Updated through Release 4 (New York:
Law Journal Press, 2003), 2-25.
fn 69 D.V. Radack, "Remedies for Copyright Infringement," JOM, 50 (5) (1998), 51, www.tms.org/pubs/journals/JOM/matters/matters-
9805.html.

fn 70 Montgomery v. Noga, 168 F.3d 1282 (11th Cir. 1999).

fn 71 DC Comics, Inc. v. Filmation Associates, 486 F. Supp. 1273 (SDNY 1980).

fn 72 15 USC 1117(c).

© 2020, Association of International Certified Professional Accountants 121