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Apportionment for Copyright Infringement Damages

An accounting of a defendant’s profit is an often-used economic remedy for copyright infringement under the Federal Copyright Act. Last year, the Supreme Court reaffirmed in its Petrella v. Metro-Goldwyn-Mayer, Inc. decision that a defendant “may retain the return on investment shown to be attributable to its own enterprise, as distinct from the value created by the infringed work.” In other words, a copyright owner may not be entitled to all the profits earned by an infringer. This theory is particularly appropriate when the infringer does not actually sell the copyrighted work and merely uses it to sell other products or services.

The High Court’s ruling is consistent with the Copyright Act and with value-of-use case law, in that a defendant accused of copyright infringement is entitled to retain profits attributable to factors other than the copyrighted work. A calculation that takes into account a return on investment of the defendant’s own enterprise is an effective and persuasive way to present an apportionment of the defendant’s accused revenue and profit.

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