Sammons v. Colonial Press

• Decision Date: 12 March 1942
• Docket Number: 3736.,No. 3735,3735
• Citation: 126 F.2d 341
• Parties: SAMMONS et al. v. COLONIAL PRESS, Inc., et al. COLONIAL PRESS, Inc., v. SAMMONS et al.
• Court: U.S. Court of Appeals — First Circuit

126 F.2d 341 (1942)

SAMMONS et al. v. COLONIAL PRESS, Inc., et al. COLONIAL PRESS, Inc., v. SAMMONS et al.

Nos. 3735, 3736.

Circuit Court of Appeals, First Circuit.

February 20, 1942.

Rehearing Denied March 12, 1942.

COPYRIGHT MATERIAL OMITTED

Robert V. Jones, of Chicago, Ill. (Arthur Thad Smith, of Boston, Mass., on the brief), for Sammons and others.

Stanley G. Barker, of Worcester, Mass. (Thayer, Smith & Gaskill, of Worcester, Mass., on the brief), for Colonial Press, Inc.

No appearance or argument for other appellee.

Before MAGRUDER, MAHONEY, and WOODBURY, Circuit Judges.

MAGRUDER, Circuit Judge.

These are cross-appeals in a suit for copyright infringement.

The main question is whether under § 25(b) of the Copyright Act of 1909, 35 Stat. 1081, 17 U.S.C.A. § 25(b), a contract printer is jointly liable with the infringing publisher for the profits which the latter made from sales of the infringing book, the plaintiffs having offered no evidence of actual damages from the infringement. We think the district court correctly answered this question in the negative.

One Larkin got up a book called "Who's Who in Massachusetts." Through reference and introduction by the University Press, Larkin got in touch with the Colonial Press, Inc., and on May 8, 1939, a contract was made between them whereby Colonial Press agreed to print 3,000 copies of the book, of which 1,000 copies were to be bound, for a total price of $7,500. Colonial Press obligated itself to pay to University Press a commission of $994 for forwarding the job.

Colonial Press is a book manufacturer. It does the actual mechanical work involved in producing books — the printing, electrotyping, stitching and binding — after receiving manuscripts from publishers. It is not engaged in the publication of books.

Larkin began furnishing manuscript in May, 1939. Colonial Press made its first delivery of books to Larkin on December 6 of that year. On February 8, 1940, the plaintiffs (a partnership doing business as the A. N. Marquis Co.) gave written notice to Colonial Press that the book "Who's Who in Massachusetts" constituted an infringement of the plaintiffs' copyrighted book "Who's Who in New England." Printing was stopped by Colonial Press on February 26. In the period between February 26 and April 12, 1940, when deliveries ceased, Colonial Press delivered to Larkin between 1,500 and 2,000 books. In all, 2,812 books were delivered. Larkin sold 2,280 volumes of his work for $18,795.

The plaintiffs' complaint, filed in the court below, joined Larkin and the Colonial Press, Inc., as co-defendants, and after setting forth the ownership by plaintiffs of the copyright of the book "Who's Who in New England," charged that "the defendants infringed said copyright by printing, publishing, selling and placing upon the market a book entitled `Who's Who in Massachusetts.'" A second count for trademark infringement and unfair competition by the defendants acting jointly and for their mutual profit was dismissed by the court with prejudice, upon motion by the plaintiffs.

The district court made findings that the accused book infringed the plaintiffs' copyright; that Larkin made a net profit of $7,236.50 from sales of the book; that Colonial Press realized no net profit out of its printing contract. It ruled that Colonial Press, though it acted in good faith and was not a conscious and deliberate infringer, was nevertheless liable for infringement, along with the publisher Larkin, because it was "the combined effort of Colonial and Larkin that placed the infringing book upon the market." However, the district court ruled that the Press was not jointly accountable with Larkin for the profits Larkin made.

On the basis of the foregoing, the court permanently enjoined the two defendants from further infringement, gave judgment against Larkin for his profits of $7,236.50, together with costs, including $1,500 for attorney's fee, and gave judgment against Colonial Press for $250 and costs. The sum assessed against the Press was "in lieu of actual damages and profits" and was the minimum amount permissible under § 25(b).

The plaintiffs and the defendant Colonial Press each took an appeal from this judgment. Larkin did not appeal. The correctness of the finding of infringement is not now challenged, nor is any issue raised as to the amount of Larkin's profits.

The chief contention of the plaintiffs in their appeal is that the court below should have held Colonial Press jointly liable for the profits made by Larkin.

Under § 25(b) any person infringing a copyright is liable "to pay to the copyright proprietor such damages as the copyright proprietor may have suffered due to the infringement, as well as all the profits which the infringer shall have made from such infringement * * *." In lieu of actual damages and profits such damages shall be assessed "as to the court shall appear to be just," within prescribed maximum and minimum limits.

Damages and profits are distinct items of recovery, and are awarded upon quite different legal principles.

In a case like the present, the measure of damages is the profits which the plaintiffs would have made upon additional sales of its copyrighted book, had not the infringing book been competing in the market. Gross v. Van Dyk Gravure Co., 2 Cir., 1916, 230 F. 412, 414. It is often difficult, for obvious reasons, to make satisfactory proof of such damages, and the plaintiffs did not attempt to do so in the case at bar. Where the copyright owner can show as damages his probable losses resulting from an infringement, it is clear, on familiar principles of tort liability, that all persons who unite in the infringement are jointly and severally liable for the damages resulting therefrom. Gross v. Van Dyk Gravure Co., 2 Cir., 1916, 230 F. 412.

On the other hand, accountability of an infringer for the profits he has made had its origin in equity. Stevens v. Gladding, 1854, 17 How. 447, 455, 15 L.Ed. 155. "Prior to the Copyright Act of 1909 * * * there had been no statutory provision for the recovery of profits, but that recovery had been allowed in equity both in copyright and patent cases as appropriate equitable relief incident to a decree for an injunction." Sheldon v. Metro-Goldwyn Pictures Corp., 1940, 309 U.S. 390, 399, 60 S.Ct. 681, 684, 84 L.Ed. 825. The theory was that it was unconscionable for an infringer to retain a benefit which he had received by the appropriation and use of the plaintiff's property right; and to prevent unjust enrichment the infringer was treated as a trustee ex maleficio of his ill gotten gains. As the court pointed out in L. P. Larson, Jr., Co. v. Wm. Wrigley, Jr., Co., 1928, 277 U.S. 97, 99, 100, 48 S.Ct. 449, 72 L.Ed. 800: "To call the infringer an agent or trustee is not to state a fact but merely to indicate a mode of approach and an imperfect analogy by which the wrongdoer will be made to hand over the proceeds of his wrong." Accountability for profits is therefore peculiarly personal, as equity acts on the conscience of the infringer. The presupposition is that the infringer has gotten something which it is unconscionable for him to keep; and hence it logically follows that the infringer is accountable only for the profits he received, not for the profits which may have been received by a co-infringer. Of course, when the infringement is by a partnership, the partners are jointly accountable for the whole profit made by the partnership on ordinary principles of partnership law. Callaghan v. Myers, 1888, 128 U.S. 617, 9 S.Ct. 177, 32 L.Ed. 547.

Liability of an infringer for profits is thus not by way of rough and ready reparation to the plaintiff for the damages which he is presumed to have suffered from the infringement. The profits which were made by the infringer may bear no relation to the damages suffered by the copyright proprietor. Thus the latter may have made no effort to exploit his copyright, in which case it would be apparent that he had not been deprived of a gain he otherwise would have made but for the infringement. Dam v. Kirk La Shelle Co., 2 Cir., 1910, 175 F. 902, 908, 41 L.R.A., N.S., 1002, 20 Ann.Cas. 1173. Again, if the copyrighted book is in an expensive de luxe edition and the infringing work a cheap edition, the profits from infringement might well come from sales in a market which the plaintiff would not have tapped anyway. Huebsch v. Arthur H. Crist Co., D.C.N.D.N.Y.1914, 209 F. 885, 894. And even where the two books are competing at the same market level, there may be substantial differences in the respective costs of the copyright proprietor and the infringer, in the effectiveness of their respective sales organizations and advertising, and in many other factors, all of which would render the profits made by the infringer wholly unreliable as an indication of the proprietor's damages, that is, the profits which he would have made but for the infringement. See Weil, Copyright Law (1917) pp. 471-73.

The basic fallacy in the plaintiffs' argument lies in their confusion of profits with damages. This is apparent from their brief: "The infringer or infringers, having preempted the position of the copyright owner and having sold or exploited the copyrighted material, should restore to the copyright owner the profits he was so prevented from making for himself. For this purpose of reparation it makes no difference how the infringers (if there be more than one) may have divided the profits among themselves; the crux of the matter is not that they, the infringers, have received profits but that they have wrongfully deprived someone else of profits which rightfully should have been his. The test of liability, that is, is not the extent of benefit received, but the extent of wrong done. The total profits resulting from the wrongful appropriation is a measure of the wrong done; admittedly it is not an entirely accurate measure, but an entirely accurate measure is...