Addressing the requirement to prove a causal link between copyright infringement and an infringer’s profits, the U.S. Court of Appeals for the Fourth Circuit disagreed with the lower court’s contention that proof of rental income from a building based on infringed architectural plans was insufficient to causally link the income to infringement. Nevertheless, the Court upheld denial of a motion for judgment as a matter of law (JMOL) on the plaintiff’s claim for the infringer’s profits. Bonner v. Dawson, 404 F. 3d 290 (Fourth Cir. 2005) (Duncan, J.).
Plaintiff Kenneth Bonner designed a building that was built by Dawson Investments and builder Terry Bishop and leased to Woodmark Corporation. At Woodmark’s request, Dawson and Bishop built another, similar building without paying Bonner for the second use of his building design. Bonner sued for copyright infringement of his plans.
The district court granted summary judgment to Bonner on liability. The issue of damages was tried to a jury, which awarded Bonner lost profits but no infringer’s profits. Bonner moved for a new trial and for JMOL on his claim for infringer’s profits. The judge denied both motions. As to JMOL, the judge held that viewing the evidence in the light most favorable to defendants, a reasonable jury could have found that Bonner had shown no causal connection between infringement and the defendants’ income from the building. Even if the jury found Bonner had made that showing, it could nonetheless have found the defendants proved their revenues did not result from infringement. For example, the defendants offered evidence that Woodmark would have wanted the building regardless of whether it had the features retained from Bonner’s plans.
Bonner appealed only the refusal to grant JMOL. The Fourth Circuit noted that under 17 U.S.C. § 504(b), a successful copyright plaintiff is entitled to an infringer’s profits attributable to infringement. Once a plaintiff establishes the infringer’s gross profits, the burden shifts to the defendant to prove that the profits are from non-infringing sources. The Court acknowledged that under its decision in Bouchat, a plaintiff can’t simply show defendant’s total gross profits from all sources. The plaintiff must show some causal connection between the profits he claims and infringement—only then does the burden shift. However, the Court found that by proving a flow of income from the lease of the building based on his infringed plans, Bonner met this burden.
It was a hollow victory. The Court agreed that a reasonable jury could have found the defendants proved their profits did not flow from infringement. The Court added that had Bonner appealed the denial of his motion for a new trial, it may have found for him based on the lower court’s use of an incorrect standard of proof.
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