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LOVE v. KWITNY

August 26, 1991

KENNETT LOVE, PLAINTIFF,
v.
JONATHAN KWITNY; CONGDON & WEED, INC.; ST. MARTIN'S PRESS, INC.; BOOK-OF-THE-MONTH CLUB, INC.; BARNES & NOBLE BOOKSTORES, INC.; B. DALTON COMPANY, COLISEUM BOOKS; DOUBLEDAY DORAN BOOK SHOPS, INC.; AND JOHN KELLY, DEFENDANTS. KENNETT LOVE, PLAINTIFF, V. CITY OF NEW YORK, EDWARD I. KOCH, MAYOR; DEPARTMENT OF GENERAL SERVICES (OF THE CITY OF NEW YORK), HADLEY W. GOLD, COMMISSIONER; WNYC COMMUNICATIONS GROUP, MARY PEROT NICHOLS, PRESIDENT, MADISON D. LACY, VICE PRESIDENT AND GENERAL MANAGER, TELEVISION; AND JONATHAN KWITNY, DEFENDANTS.



The opinion of the court was delivered by: Mukasey, District Judge.

  OPINION AND ORDER

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.

I.

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 421-page book.

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 Hustler Magazine.

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 facts.

B. Deductible Expenses

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 ...


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