The opinion of the court was delivered by: Mukasey, District Judge.
The parties are before this court for what should be the last
time in order to resolve two matters: (i) the relief to which
plaintiff is entitled as a result of defendants' copyright
infringement, and (ii) whether the record before Judge Owen,
and later before me, justifies the conclusion that defendants
and their counsel violated Fed.R.Civ.P. 11. This case has been
the subject of three prior opinions in this court, one by Judge
Owen dismissing the libel claim, Love v. Kwitny, 1987 WL 5799
(S.D.N.Y. 1987), and two by me — the first determining the
copyright infringement claim, Love v. Kwitny, 706 F. Supp. 1123
(S.D.N.Y. 1989), and the second dismissing plaintiff's claim
for statutory damages and attorney's fees. Love v. Kwitny, 1989
WL 140578 (S.D.N.Y. 1989). Familiarity with those prior
opinions is assumed for current purposes.
For the reasons set forth below, plaintiff will recover of
the following defendants either the amounts specified, which
are the fair proportion of each of their profits from the sale
of "Endless Enemies" that may be attributed to the
infringement, or, as to Kwitny, costs, which shall include the
cost of serving him with the summons and complaint when he
failed to acknowledge service by mail:
Book of the Month Club — $422.18
St. Martin's Press — $607.72
BDB Corporation — $152.39
Jonathan Kwitny — costs to be taxed
No injunction will be entered restraining further sale of the
book or requiring destruction of remaining copies or plates.
Plaintiff's motion for Rule 11 sanctions is as meritless as it
is tendentious — which is to say, utterly — and is denied in
all respects. Plaintiff is found to have violated Rule 11 by
filing a meritless Rule 11 motion, but will suffer no sanction
beyond the sting of that finding.
The parties have stipulated that Love has waived any claim
for his own lost profits pursuant to 17 U.S.C. § 504(b). In
view of the earlier dismissal of his claim for statutory
damages pursuant to 17 U.S.C. § 504(c) and 505, that leaves
only a claim for profits of defendants attributable to their
infringement of the copyrighted work. 17 U.S.C. § 504(b). The
parties differ over the percentage of profits from "Endless
Enemies" attributable to the infringement.
The parties have stipulated also the gross revenues of each
of the defendants, and certain expenses which plaintiff
concedes may be deducted from gross revenues to determine
profits; they have stipulated as well the amounts of the
expenses in the categories of deductibility they dispute. Those
disputed categories are overhead expenses, royalty payments and
income taxes. The parties disagree also as to whether an award
of prejudgment interest or costs is appropriate in this case.
A. Percentage of Profits Attributable to Infringement
The parties have stipulated that the infringed portion of
plaintiff's manuscript accounted for 11 pages of Kwitny's
Plaintiff does not so much argue an appropriate percentage of
profit to be attributed to the infringement here as throw out
hints based on what courts have done in other cases and suggest
that any substantial percentage up to 100% of defendants'
profits would be appropriate. Thus, he cites dictum in a
footnote in ABKCO Music, Inc. v. Harrisongs Music, Ltd.,
508 F. Supp. 798, 801 n. 10 (S.D.N.Y. 1981), modified, 722 F.2d 988
(2d Cir. 1983), to the effect that no apportionment is
necessary in cases involving willful plagiarism. He points out
that plaintiff in Smith v. Little, Brown & Co., 273 F. Supp. 870,
874 (S.D.N.Y. 1967), aff'd, 396 F.2d 150 (2d Cir. 1968),
was awarded all of defendant's profits even though the material
plagiarized in that case was "comparatively small" in relation
to the size of the full work. He notes that plaintiff in
Blackman v. Hustler Magazine, Inc., 620 F. Supp. 792 (D.D.C.
1985), aff'd in part and rev'd in part, 800 F.2d 1160 (D.C.
Cir. 1986) was awarded 60% of defendant's profits for one
infringement when the infringing material constituted at most
4.4% of the publication, and was awarded 35% of the profits for
a second infringement when the material in question constituted
4.7% of the publication.
We may be dealing here with guile by Kwitny, as the opinion
on the liability phase of the case pointed out, 706 F. Supp. at
1133, but we are not dealing with willful plagiarism — the
passing off of someone else's work as one's own. Nor is this
case analogous to Smith, where the plagiarized material was the
outline for a novel then expanded and sold by defendant, such
that the small amount taken infected the entire resulting work.
Nor can this case be analogized to Blackman, where the
infringed material — copyrighted nude photographs of
plaintiff's former model Elizabeth Ray, who was "catapulted . .
. into the public eye" by the disclosure of her relationship
with a United States Congressman, 620 F. Supp. at 794 — was
used as a "lure to attract readers." Id. at 801. Despite
plaintiff's extravagant claims that his work was a "central
feature" of "Endless Enemies" (Plaintiff's Brief on Damages, p.
10), there was but one oblique reference to plaintiff in the
numerous reviews submitted as exhibits to the stipulation
between the parties (Stipulation, Exh. L), and his manuscript
and its treatment were not used at all in promotional material
about the book. (Stipulation Exhs. F-K) That is not surprising.
The treatment Love's manuscript received in Kwitny's book, as
opposed to the non-copyrightable facts it contained, was beside
the point of the book; "Endless Enemies," after all, was about
what the author felt were the follies of this country's foreign
policy, not the alleged foibles of its journalists. By no
stretch of even the most salaciously elastic imagination do
excerpts from Love's manuscript stand in relation to Kwitny's
book as Blackman's photographs of Ms. Ray stand in relation to
Defendants argue that because the infringing material
amounted at most to about 2.6% of the book, plaintiff should be
limited to 2.6% of the profit. The book dealt with U.S. foreign
policy throughout the world; by no means did it focus solely or
even substantially on events in Iran in 1953. Certainly, the
infringed material cannot be said to amount to more than 2.6%
of the book, and I believe that figure is generous to plaintiff
because it necessarily
includes the impact that results from use of non-copyrightable
Defendants urge that overhead expenses be calculated by
allocating to proceeds from sales of "Endless Enemies" both
direct and indirect overhead expenses in the same proportion
that those expenses bear to each defendant's net sales for the
relevant year. That is known as the "full absorption" approach,
and the authority in this jurisdiction supports its use, as
reflected in Judge Knapp's comprehensive opinion in Warner
Brothers, Inc. v. Gay Toys, Inc., 598 F. Supp. 424, 428-29
(S.D.N.Y. 1984), and cases cited therein.
Plaintiff urges that no infringing defendant should be
allowed to deduct income taxes for purposes of computing
profits. His position finds strong support in Schnadig Corp. v.
Gaines Mfg. Co., 620 F.2d 1166, 1169-71 (6th Cir. 1980), where
the Court in a patent case analyzed what happens when an
infringer is allowed to subtract taxes before calculating
profits payable to the plaintiff ...