778 F.2d 89 (2nd Cir. 1985), 27, Sygma Photo News, Inc. v. High Soc. Magazine, Inc.

Docket Nº:27, 174, Dockets 85-7128, 85-7196.
Citation:778 F.2d 89
Party Name:3 Fed.R.Serv.3d 1023 SYGMA PHOTO NEWS, INC., Plaintiff-Appellee-Cross-Appellant, v. HIGH SOCIETY MAGAZINE, INC., Drake Publishers, Inc. and Dorjam Publications, Inc., Defendants, Drake Publishers, Inc. and Dorjam Publications, Inc., Defendants-Appellants-Cross-Appellees.
Case Date:November 25, 1985
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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778 F.2d 89 (2nd Cir. 1985)

3 Fed.R.Serv.3d 1023

SYGMA PHOTO NEWS, INC., Plaintiff-Appellee-Cross-Appellant,

v.

HIGH SOCIETY MAGAZINE, INC., Drake Publishers, Inc. and

Dorjam Publications, Inc., Defendants,

Drake Publishers, Inc. and Dorjam Publications, Inc.,

Defendants-Appellants-Cross-Appellees.

Nos. 27, 174, Dockets 85-7128, 85-7196.

United States Court of Appeals, Second Circuit

November 25, 1985

Argued Sept. 19, 1985.

Page 90

Norman S. Beier, New York City (Abelman Frayne Rezac & Schwab, Lawrence E. Abelman, Marianne F. Murray, New York City, of counsel), for defendants-appellants-cross-appellees.

Ben C. Friedman, P.C., New York City, for plaintiff-appellee-cross-appellant.

Before LUMBARD, OAKES, and NEWMAN, Circuit Judges.

OAKES, Circuit Judge:

One of the challenging socio-legal questions raised by this copyright infringement case involves the extent to which the buyers of men's "sophisticate" magazines are motivated to purchase a particular magazine by the cover photo. The question is no less difficult when the photo is, as it is here, one of Raquel Welch in the buff (modestly covering herself in the nature of September Morn). The United States District Court for the Southern District of New York, Robert W. Sweet, Judge, in assessing damages against the publishers of "Superstars of Celebrity Skin, Special No. 6" ("Celebrity Skin"), thought, and hence found, that the photo--retouched from its original appearance in "Paris Match"--produced 75% of the magazine's sales. Judge Sweet declared the figure of 75% appropriate "based on the nature of the Photograph, the reputation and fame of Ms. Welch, the absence of any established readership for the publication and its intermittent publication schedule." Restrained as we are now by amended Rule 52(a), Fed.R.Civ.P., we nevertheless believe the finding of 75% must be modified because it

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is clearly erroneous. We also make some other modifications on the basis of the evidence and the record so as to reduce the judgment in amount while affirming the responsibility of all the named defendants for the judgment.

The Raquel Welch photo in question was taken in 1978 by one Tony Kent, who assigned the copyright to Playboy Enterprises. Playboy Enterprises, in accordance with a contract which it had earlier entered into with Ms. Welch and Raquel Welch Productions, Inc., then assigned her corporation the copyright. The photo subsequently appeared on the cover of the September 4, 1981, issue of "Paris Match" magazine with the title " 'Je veux etre la plus belle grand-mere du monde,' Les secrets d'un corps parfait, a 42 ans." On May 31, 1983, Raquel Welch Productions, Inc., assigned the copyright on the photo to Sygma Photo News, Inc., appellee here. All the assignments were duly registered with the copyright office.

A retouched version of the photograph--one that understandably omitted references to "Paris Match" and to Ms. Welch's professed desire to be the world's most beautiful grandmother--was subsequently used as the cover of the magazine "Celebrity Skin" without authorization. The cover logo refers to the "Superstars of Celebrity Skin in the Nude" and mentions the names not only of Raquel Welch but of other famous women such as Farrah Fawcett, Morgan Fairchild, Jodie Foster, Linda Evans, inevitably Marilyn Monroe, Sophia Loren, Nastassja Kinski, Angie Dickinson, Ursula Andress, Valerie Perrine, "And All Your All-Time Favorites!" The cover also contained a subhead "The Definitive Collector's Edition from High Society, Special No. 6."

"Celebrity Skin" was published in the name of Dorjam Publications, Inc., which has no paid employees and is a shell corporation of Drake Publishers. Drake, the successor in interest to High Society Magazine, Inc., which terminated its business in 1979, publishes "High Society," a monthly men's sophisticate magazine. According to the deposition testimony of Ira Kirschenbaum, who is Dorjam's nominal vice president as well as the vice president and CEO of Drake Publishers, Drake administered the publication of "Celebrity Skin" on behalf of Dorjam and Celebrity Skin. Drake's employees gathered the photographs used in the magazine, kept the books, wrote all the checks, prepared the print order for "Celebrity Skin, Special No. 6," filed Dorjam's tax returns, and performed other administrative tasks.

The district court, 596 F.Supp. 28, awarded summary judgment against Dorjam and Drake as infringers of the copyright of the photograph. The parties then avoided a damages trial by stipulating to the facts necessary for the court to determine damages. Noting that once gross revenues from the infringing work were established the burden rested upon the infringer to prove those expenses that should be deducted to establish profit, see Lottie Joplin Thomas Trust v. Crown Publishers, Inc., 592 F.2d 651, 657 (2d Cir.1978), Judge Sweet made an award of $59,283 under section 504(b) of the Copyright Act of 1976, 17 U.S.C. Sec. 504(b) (1982), for actual damages. In calculating expenses, the court decided that all printing, laminating, wrapping and binding costs, a total of $165,070, should be deducted. On a cross-appeal Sygma claims that only 52% of that amount is properly deductible because only that percentage of copies printed were sold. Sygma also urges that the infringer should not be permitted to deduct any expenses related to the photograph and that the district court should not have deducted $42,882, the entire cost of separations, a procedure whereby color is broken down for printing purposes into separate films, each in a basic color. Drake...

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