Page:Sid & Marty Krofft Television Productions v. McDonald's Corporation.pdf/18

1174 Defendants argue that this instruction was designed only to prevent the jury from considering the corporate profits of McDonald’s, which are derived from the purveying of food. They point instead to Jury Instruction No. 49, which reads: "“If you find that defendants infringed plaintiffs’ copyright, plaintiffs are entitled to all of the damages, if any, suffered as a result of such infringement. In arriving at any such damages, you may take into consideration the reasonable value, if any, of plaintiffs’ work including the publication and republication rights therein, and the value, if any, to defendants of the use of plaintiffs’ works.”"

Defendants claim that the value of use provided in this instruction is equivalent to defendant’s profits from the infringement.

The value of use reference in Instruction No. 49 is defined as a part of the reasonable value of plaintiffs’ work. It amounts to a determination of what a willing buyer would have been reasonably required to pay to a willing seller for plaintiffs’ work. That is a different measure than the determination of defendants’ actual profits from the infringement. An author might license the use of his copyright either for a lump sum based on the reasonable value of the work or for a royalty derived from the licensee’s profits, or for a combination of both.

The district court recognized the potential for confusion between these two instructions. It agreed upon an explanation offered by counsel for plaintiffs: “I think that the difference would be that a person may pay to use ‘Living Island’ and the characters, and then, even though they have paid for them, they may have suffered a loss and suffered no profit.” It was only because the district court concluded that there was a difference between profits and value of use that both Instructions 26 and 49 were delivered to the jury. We agree with this distinction.

Defendants argue further that profits in fact were considered by the jury. The record does not support this conclusion. No exhibits regarding either defendants’defendant’s [sic] profits were submitted to the jury in the infringement action. We therefore find that the issue of profits was neither submitted to nor considered by the jury.

In denying plaintiffs’ motion for an accounting of profits, the district court relied upon Dairy Queen v. Wood, 369 U.S. 469, 82 S.Ct. 894, 8 L.Ed.2d 44 (1962). That