Page 127 - Intellectual Property Disputes

and declined to do so in Bryant. The court’s decision was based on the "intent expressed in the
Conference Report" that accompanied the Copyright Act of 1976, which allows for a 1-award restriction
on statutory damages for any 1 "work" and defines a compilation as pre-existing materials regardless of
individual copyrights (that is, may be considered independent works for other purposes). fn 79

The district court in Sony BMG Music Entertainment v. Tenenbaum fn 80 also addressed the issue of
statutory damages, albeit from a cumulative perspective. This case is related to the Recording Industry
Association of America’s suits against 35,000 people in 2003 in an attempt to stop the illegal
downloading of music. At trial, a jury awarded statutory damages of $22,500 per song, for a total of
$675,000. The court reduced the award to $2,250 per song, for a total of $67,500. In doing so, the judge
reduced the damages amount, stating it was "far greater than necessary to serve the government’s
legitimate interests in compensating copyright owners and deterring infringement," and that the jury’s
award bore "no meaningful relationship to those objectives." fn 81 The judge’s decision reduced the
award by 90% and called into play the practical application of the Copyright Act of 1976 in this
electronic age as well as between individuals and corporations.

Corrective Advertising

In fixing damages, courts may take into consideration the cost of a corrective advertising campaign the
trademark owner conducts in order to repair the effect of the defendant’s misleading advertising. The
purpose of such a campaign is to correct any misimpressions that were formed in the marketplace due to
the infringers’ actions and thereby return the plaintiff to a pre-infringement state.

For example, in U-Haul International, Inc. v. Jartran, Inc., the trial court awarded damages twice the
amount of the original false ad campaign. fn 82 In Big O Tire Dealers, Inc. v. The Goodyear Tire &
Rubber Co., the court held that corrective advertising damages were equal to 25% of the defendant’s
relevant advertising expenditures. In reaching its conclusion, the court based its analysis on the Federal
Trade Commission guideline that requires businesses engaging in misleading advertising to spend 25%
of their advertising budget on corrective advertising. fn 83

It is often advantageous to seek the opinion of practitioners seasoned in the art of developing advertising
campaigns, such as public relations or advertising professionals, to opine on the amount of corrective
advertising required to reverse customer confusion or the adverse impact of infringement. Analysis of
the advertising levels expended by the parties to the suit may also be probative.

When determining trademark damages, there are a few important cases of which the damages expert
should be aware. As with any matter, it is recommended that the forensic practitioner work with counsel
to understand the relevant case law in the federal district, state, or other court to locate any specific
precedents that may be relevant to the facts and circumstances at hand.

fn 79 Bryant., 603 F.3d at 135.
fn 80 Sony BMG Music Entm’t v. Tenenbaum, 2010 U.S. Dist. LEXIS 68642 (D. Mass.). This copyrights at issue relate to 30 recordings
that were downloaded by the defendant.

fn 81 Id.

fn 82 U-Haul International, Inc. v. Jartran, Inc., 793 F.2d 1034 (9th Cir. 1986).

fn 83 Big O Tire Dealers, Inc. v. The Goodyear Tire & Rubber Co., 561 F.2d 1365, 1375 (10th Cir. 1977).

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