Architect Fails in Linking Infringer's Profits to Taking of Copyrighted Design

In Bonner v. Dawson (4th Cir., 04/14/05 - No. 04-1440), the United States Court of Appeals for the Fourth Circuit addressed what evidence can be used to establish an infringer's profits as a measure of copyright damages.

In Bonner, an architect was paid to design a building that was constructed by the owner. The owner then used the architect's copyrighted plans to build a second similar building next to the first building. The architect then registered the copyright and sued the owner, alleging copyright infringement in violation of the Architectural Works Protection Act of 1990 ("AWCPA"), 17 U.S.C. § 102(a). The architect requested that he be deemed the rightful copyright owner of the design of the second building and that
the owner be required to pay actual damages and lost "infringer’s profits" under 17 U.S.C. § 504(b).

The trial court granted summary judgment on liability for the architect and held a trial on damages. At trial, the jury awarded the architect actual damages of $10,707 in actual damages but no infringer’s profits. The architect unsuccessfully sought the infringer's profits through a motion for judgment as a matter of law (JMOL). The trial court denied the JMOL, and the architect appealed.

The Fourth Circuit discussed what evidence must be shown of infringer's profits. Section 504(b) of the Copyright Act entitles a successful copyright plaintiff to recover any "actual damages" suffered by him and "any profits of the infringer that are attributable to the infringement." 17 U.S.C. § 504(b). The statute creates a burden-shifting provision, stating: "[i]n establishing the infringer’s profits, the copyright owner is required to present proof only of the infringer’s gross revenue, and the infringer is required to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work."

The Fourth Circuit noted that the plaintiff must do more than show all of plaintiff's revenues. Citing Bouchat v. Balt. Ravens Football Club, Inc., 346 F.3d 514, 520-22 (4th Cir. 2003), the court noted that

"gross revenue" refers only to revenue reasonably related to the infringement. The copyright owner thus has the burden of demonstrating some causal link between the infringement and the particular profit stream before the burden-shifting provisions of § 504(b) apply.

The architect had met this burden of showing revenue "reasonably related" to the infringement, the Bonner court held, by presenting evidence of the lease revenues from the second building. In so ruling, the Fourth Circuit held that the district court had erred in requiring the architect to show evidence that the revenues were causally connected to the infringed design.

However, the architect nonetheless lost his appeal because the owner presented evidence of alternate causes for the revenues that the jury could have relied upon. In particular, the owner presented evidence that the second building would have been built anyway even if the exterior design had been non-infringing, and that the tenants were more interested in the interior space than the building design. The Fourth Circuit held that this was substantial evidence that supported the jury's verdict refusing to award infringer's profits. Thus, denial of the JMOL was affirmed.