17.35 Copyright—Damages—Actual Damages (17 U.S.C. § 504(b))

The plaintiff [name] is entitled to recover the actual damages suffered as a result of the infringement. Actual damages means the amount of money adequate to compensate the copyright owner for the reduction of the fair market value of the copyrighted work caused by the infringement. In determining actual damages, you should consider the following:

(1)        [The amount a willing buyer would have been reasonably required to pay a willing seller at the time of the infringement for the actual use made by the defendant [name] of the plaintiff [name]’s work] [;] [and]

(2)        [The profits the plaintiff [name] should have received for any sales lost because of the infringement. Profits are the gross revenue the plaintiff [name] would have made on sales that did not occur because of the infringement minus additional expenses the plaintiff [name] would have incurred in making those sales] [;] [and]

(3) [Insert any other factors that bear on the plaintiff ’s actual damages].

Comment

In a multi-defendant case, this instruction may need to be tailored according to the defendant to whom it applies. Where there are multiple infringers of a copyright, all infringers are jointly and severally liable for the plaintiff’s actual damages, but each defendant is severally liable for the defendant’s own illegal profits. See Frank Music Corp. v. Metro-Goldwyn-Mayer, Inc., 772 F.2d 505, 519 (9th Cir. 1985) (citations omitted).

In the Ninth Circuit, the calculation of actual damages under the 1909 Copyright Act differed from that under the 1976 Copyright Act. The Ninth Circuit interpreted the 1909 Copyright Act as allowing recovery of only the higher of actual damages or infringer profits. This differed from other circuits, where recovery of both actual damages and the infringer’s profits was allowed. However, under the 1976 Copyright Act, Congress explicitly allowed recovery of both actual damages and the infringer’s profits. See Frank Music Corp., 772 F.2d at 512 & n.5.

This instruction is based upon a jury instruction approved by the Ninth Circuit as “properly stat[ing] the law of damages in a copyright infringement suit” and “in line with our circuit’s caselaw.” Wall Data Inc. v. L.A. Cnty. Sheriff’s Dep’t, 447 F.3d 769, 787 (9th Cir. 2006). The circuit has noted that actual damages may be “awarded in the form of lost profits” or may be awarded based on “hypothetical-license damages,” Oracle Corp. v. SAP AG, 765 F.3d 1081, 1087 (9th Cir. 2014), which are determined by “the amount a willing buyer would have been reasonably required to pay a willing seller at the time of the infringement for the actual use made by [the infringer] of the plaintiff’s work,” id. (alteration in original) (quoting Wall Data, 447 F.3d at 786). See also id. at 1088 (explaining that a rule disallowing “hypothetical-license damages . . . could operate unfairly, given the difficulty the [copyright owner] might face in meeting the burden of proof for lost profits and infringer’s profits” (citing On Davis v. The Gap, Inc., 246 F.3d 152, 166 (2d Cir. 2001)). “[T]he ‘market value approach is an objective, not a subjective, analysis.’” Jarvis v. K2 Inc., 486 F.3d 526, 534 (9th Cir. 2007) (quoting Mackie v. Rieser, 296 F.3d 909, 917 (9th Cir. 2002)). Therefore, “[e]xcessively speculative claims of damages are to be rejected.” Id.

This instruction does not address whether the measures of actual damages (as either the plaintiff’s lost profits or the fair market value of the use illegally appropriated by the infringer) are mutually exclusive or additive, nor the danger of double recovery if both measures are presented to the jury.

For commentary on the plaintiff’s right to elect to recover statutory damages instead actual damages and the defendant’s profits, seeInstruction 17.37 (Copyright—Damages—Statutory Damages).

Revised Dec. 2023