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

            The copyright owner is entitled to recover the actual damages suffered as a result of the infringement.  Actual damages mean 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.  The reduction of the fair market value of the copyrighted work is 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 of the plaintiff’s work.  That amount also could be represented by the lost license fees the plaintiff would have received for the defendant’s unauthorized use of the plaintiff’s work. 

Comment 

            Add applicable paragraphs from Instruction 17.34 (Copyright—Damages—Defendant’s Profits). 

            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 v. L.A. Cnty. Sheriff’s Dep’t, 447 F.3d 769, 787 (9th Cir. 2006).  The circuit has noted that “[a]ctual damages are usually determined by the loss in the fair market value of the copyright, measured by the profits lost due to the infringement or by the value of the use of the copyrighted work to the infringer.”  Polar Bear Prods., Inc. v. Timex Corp., 384 F.3d 700, 708 (9th Cir. 2004) (internal quotation marks omitted); see also id. at 709 (“[I]t is not improper for a jury to consider either a hypothetical lost license fee or the value of the infringing use to the infringer to determine actual damages, provided the amount is not based on ‘undue speculation.’” (emphasis added) (quoting McRoberts Software, Inc. v. Media 100, Inc., 329 F.3d 557, 566 (7th Cir.2003)).  “[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 as the diminution in value of the copyright) are mutually exclusive or additive, nor the danger of double recovery if both measures are presented to the jury.