Bruce v. Weekly World News, Inc.

United States Court of Appeals
For the First Circuit

No. 01-2345

DOUGLAS M. BRUCE,

Plaintiff, Appellant,

v.

WEEKLY WORLD NEWS, INC., et al.,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Richard G. Stearns, U.S. District Judge]

Before

Torruella, Circuit Judge,

Campbell and Cyr, Senior Circuit Judges.

Andrew D. Epstein, with whom Barker, Epstein & Loscocco was on
brief for appellant.
Andrew Baum, with whom Darby & Darby, P.C. was on brief for
appellees.

October 30, 2002
 CYR, Senior Circuit Judge. Douglas M. Bruce appeals from

a district court judgment which directed the tabloid Weekly World

News ("World News") to pay him $20,142.45 in damages and

nonduplicative profits due to its acknowledged copyright

infringement. Bruce insists that he is entitled to additional

damages amounting to between $359,000 and $406,000. With but one

exception, the district court judgment is affirmed.

I

BACKGROUND

In March 1992, Bruce, a freelance photographer,

photographed then-presidential-candidate William S. Clinton as he

was shaking hands with an unidentified Secret Service agent.

Later, Bruce consigned the photograph to The Picture Group, a photo

stock agency. Thereafter, a World News photo editor contacted The

Picture Group to obtain a photograph of Clinton while shaking

hands. World News intended to alter any such photograph by

superimposing, over the image of the person shaking Clinton's hand,

its own image of the "Space Alien." The "Space Alien" is a

fictional extra-terrestrial creature which World News had been

featuring prominently in its political campaign coverage ever since

1990. World News then proceeded to manipulate the Clinton

photograph without first obtaining authorization from Bruce. The

Picture Group and World News were unable to reach agreement on an

appropriate licensing fee.

2
 On the cover of its August 11, 1992 issue, World News

published the retouched photograph, together with the banner "Alien

Backs Clinton!" The Picture Group billed World News for $500,

which it shared equally with Bruce pursuant to contract.

Thereafter, on each occasion that the retouched photograph appeared

in World News, The Picture Group sent World News a bill.

Ultimately, Bruce realized a total of $1,775 in licensing fees.

The Picture Group ceased its business operations in 1993.

Thereafter, in 1994, Bruce came upon a World News T-shirt

advertisement utilizing the August 11, 1992 cover containing his

retouched photograph. In due course, Bruce's counsel transmitted

a cease-and-desist letter to World News, claiming copyright

infringement. World News responded with an offer to pay $500 for

a general release of the Bruce copyright. The same retouched

photograph later appeared on a different T-shirt featuring World

News' June 7, 1994 cover, containing photographs of twelve United

States Senators, under the banner "12 U.S. Senators Are Space

Aliens!" These T-shirt advertisements subsequently were repeated

188 times in World News, as well as numerous times on the World

News Internet site. During this period, World News ordered 5,710

(and sold 1,817) of the "Alien Backs Clinton" T-shirts and ordered

4,767 (and sold 2,207) of the "Senators Are Aliens" T-shirts.

In an article entitled “Alien Endorses Dole,” appearing

in the May 1996 issue, the World News cover included (1) another

3
photograph of Clinton (not taken by Bruce) holding a copy of the

August 11, 1992 issue of World News, together with Bruce’s

retouched photograph; as well as (2) the cover of the August 11,

1992 issue, among a collage of earlier World News covers. In the

May 2000 issue, the retouched photograph appeared both as a small

inset on the cover, which prominently featured a photograph of

George Bush shaking hands with the Space Alien, and adjacent to the

related news story inside. In addition, beginning in July 1995,

the August 11, 1992 World News cover, containing Bruce’s retouched

photograph, appeared 48 times as part of a subscription

advertisement placed inside the tabloid.

In June 1998, Bruce commenced the present action against

World News for copyright infringement. See 17 U.S.C. § 101 et seq.

(1996 & Supp. 2002). Following a bench trial, during which World

News acknowledged its infringements, the district court awarded

Bruce $20,142.45 in damages, plus interest. Bruce v. Weekly World

News, Inc., 150 F. Supp. 2d 313 (D. Mass. 2001).1 The damages

award included nine components:

Actual Damages

Editorial use of retouched photo
on 5/28/96 $ 300
Additional editorial uses on
5/28/96 and 5/9/00 $ 0

1
The copyright statute itself delimits the recoverable damages
in the instant case to those sustained since June 1, 1995. See 17
U.S.C. § 507(b).

4
 Uses on two promotional T-shirts $ 800
Uses in T-shirt ads $ 0
Uses in subscription ads $ 0
Uses on Internet site $ 1,200
___________________________________________
Subtotal $ 2,300
Multiplier for unauthorized use x 5
___________________________________________________
Subtotal of actual damages $ 11,500.00

Nonduplicative Profits

Sales of T-shirts $ 8,642.45
Advertising revenues $ 0
Newstand/subscription sales $ 0
------------------------------------------------
Subtotal of nonduplicative profits $ 8,642.45

Total damages award $20,142.45

On appeal, Bruce challenges the amount of the damages

award, contending that he is entitled to at least an additional

$359,000.

II

DISCUSSION

We review de novo the legal determination as to the

appropriate standard for calculating damages awarded as a

consequence of copyright infringements, but will upset the

underlying factual findings only upon a showing of clear error.

See Tamko Roofing Prods., Inc. v. Ideal Roofing Co., 282 F.3d 23,

34 (1st Cir. 2002). A plaintiff who establishes copyright

infringement is entitled to recover (1) actual damages, which

consist of all income and profits lost as a consequence of the

infringement; and (2) any nonduplicative profits earned by the

5
defendant as a consequence of the copyright infringement, see 17

U.S.C. § 504(b) (noting that plaintiff may recover “any profits .

. . attributable to the infringement [that] are not taken into

account in computing the actual damages"). See Data Gen. Corp. v.

Grumman Systs. Support Corp., 36 F.3d 1147, 1170-77 (1st Cir.

1994).

Actual Damages

A. Applicable Legal Standard

At the outset, Bruce asserts that it was reversible error

for the district court to announce that the correct legal standard

for calculating actual damages is “the profits lost . . .

result[ing] . . . [from] the infringement,” Bruce, 150 F. Supp. 2d

at 316 (emphasis added), rather than the “reasonable fair market

licensing fees,” since the term “profits lost” more aptly applies

to a distinct species of actual copyright damages, not pertinent

here, and refers not to the extent to which plaintiff was deprived

of defendant’s fee, but rather the extent (if any) to which

defendant’s infringement prevented plaintiff from licensing his

work to clients or customers other than the defendant. See Data

Gen. Corp., 36 F.3d at 1170-71; Hamil Am., Inc. v. GFI, 193 F.3d

92, 107-08 (2d Cir. 1999); 3 Melville B. Nimmer & David Nimmer,

Nimmer on Copyright § 14.02[A] (2001). Yet, assuming arguendo that

the district court’s prefatory reference to “profits lost” was ill-

founded, the error is plainly harmless, see, e.g., Southex

6
Exhibitions, Inc. v. R.I. Builders Ass’n, 279 F.3d 94, 103 (1st

Cir. 2002) (“‘[S]uch error [is] harmless if it is highly probable

that [it] did not affect the outcome of the case.'”) (citation

omitted), since the body of its opinion makes it unmistakably clear

that the court was assessing Bruce’s actual damages through

reference to the “[licensing] fees” which World News would have had

to pay Bruce were it not for the unauthorized use of the

photograph.2

B. Apportionment of Actual Damages

Next, Bruce contends that the district court erred by

awarding only one half of the $2,200 licensing fees, see supra

Section I (chart), in order to reflect Bruce’s 1992 contractual

agreement to share all fees equally with The Picture Group, the

photo stock agency to which Bruce consigned the photograph. Since

The Picture Group went out of business in 1993, Bruce posits that

he was entitled to 100% of the fees thereafter, and, accordingly,

that World News was unjustly enriched by virtue of the district

court’s fifty-percent reduction in the $2,200 licensing fees.

Although considerable deference normally must be accorded

the findings of fact made by the district court, as well as its

balancing of the relevant equitable factors, see Invest Almaz v.

2
For instance, the district court stated: “I conclude that an
inflation adjusted fee of $300 . . . is a fair award . . . [and]
that a fee of $500 for the Clinton use and $300 for the Senators
use is appropriate.” Bruce, 150 F. Supp. 2d at 321 (emphasis
added).

7
Temple-Inland Forest Prods., 243 F.3d 57, 66 (1st Cir. 2001)

(noting that unjust-enrichment rulings normally are reviewed for an

abuse of discretion only), in the instant case we conclude that

Bruce is entitled to the fifty-percent share of the licensing fee

which World News should have paid to The Picture Group in 1992 for

its use of the Bruce photo.

Bruce freely contracted away his right to the fifty-

percent share, and thus would be “made whole” upon receipt of the

fifty-percent discount. The unjust enrichment doctrine, however,

requires that the factfinder also consider whether World News, if

permitted to retain The Picture Group’s share of the licensing fee,

would realize an unfair windfall such that justice and equity

mandate be disgorged. See id. at 64. As The Picture Group is

presently defunct, its $1,100 share would either be retained by

World News or remitted to Bruce. As World News is the copyright

infringer, Bruce unquestionably is the more deserving recipient.

Accordingly, we vacate the district court judgment insofar as it

discounted the Bruce share of the licensing fee by fifty percent,

and remand with directions to enter judgment for an additional

$5,500 in damages in favor of Bruce (viz., $1,100 times multiplier

of 5). See Nowaczyk v. Warden, N.H. State Prison, 299 F.3d 69, 83

(1st Cir. 2002) (noting that an “‘[a]buse [of discretion may

result] . . . when a material factor deserving significant weight

is ignored”) (citation omitted).

8
 C. The Limitation of the Licensing Fees to the
Original Unauthorized Use by World News

Bruce next contends that the district court incorrectly

ruled that he was entitled to licensing fees solely for World News'

first unauthorized editorial uses of his photograph in August 1992,

but not for each ensuing unauthorized use, such as its reprinting

of prior World News covers and its uses in T-shirt and subscription

advertisements. Bruce conjectures instead that he may have been

able to negotiate a more lucrative per-use licensing contract with

World News. See Iowa State Univ. Res. Found., Inc. v. Am. Broad.

Cos., 475 F. Supp. 78, 83 (S.D.N.Y. 1979) (“[The infringer] cannot

expect to pay the same price in damages as it might have paid after

freely negotiated bargaining, or there would be no reason

scrupulously to obey the copyright law.”), aff’d, 621 F.2d 57 (2d

Cir. 1980).

The present contention fails for several reasons. First,

under the copyright statute Bruce may recover actual damages only.

See Data Gen. Corp., 36 F.3d at 1170-77. Accordingly, the sole

issue before the district court was the amount of the reasonable

licensing fee Bruce likely would have received from World News for

each of the above-listed uses had the parties reached a fee

agreement, which presented what is first and foremost a question of

fact, rather than law. Thus, under the applicable standard of

review, the challenged determination constituted "clear error only

if, after reviewing the entire trial record, ‘we are firmly

9
convinced that a mistake has been made.’" Southex Exhibitions, 279

F.3d at 98-99 (citation omitted; emphasis added). We perceive no

such serious error.

First and foremost, in the present case, proof of

industry practice inarguably is crucial to the estimation of actual

damages.3 The record on appeal is replete with expert testimony

that, given the prevailing industry practice, there was no

realistic prospect whatsoever that Bruce could negotiate a per-use

licensing fee with World News. Rather, the record discloses ample

evidence that such a practice is rarely, if ever, indulged.

All Bruce managed to muster in reply was the testimony of

his own expert, Sheri Blaney, which included the conclusory and

unsupported assertion that the licensing fee award “could be

whatever we feel is fair.” On the other hand, Darryl Jacobson, the

expert witness presented by World News, repeatedly and consistently

testified that, under the prevailing industry practice, Bruce

almost surely would not have been able to negotiate with World News

for anything other than a single, lump-sum, up-front licensing fee,

3
See, e.g., De Graffenried v. United States, 25 Cl. Ct. 209,
220-21 (1992) (relying, in patent-infringement case, on evidence
that industry practice was to negotiate a single up-front royalty,
rather than a per-use royalty); see also BellSouth Adver. & Publ’g
Corp. v. Donnelley Info. Publ’g, Inc., 999 F.2d 1436, 1444 (11th
Cir. 1993); Endress & Hauser, Inc. v. Hawk Measurement Systs. Pty.
Ltd., 892 F. Supp. 1123, 1131 (S.D. Ind. 1995), aff’d, 122 F.3d
1040 (Fed. Cir. 1997); Playboy Enters., Inc. v. Dumas, 831 F. Supp.
295, 305 (S.D.N.Y. 1993); cf. Mills Music, Inc. v. Snyder, 469 U.S.
153, 170-71 (1985) (assuming that Congress intended to incorporate
prevailing industry practices when it enacted the copyright act).

10
as distinguished from a per-use fee. As but one glaring example of

the weaknesses in the Bruce proffer, Ms. Blaney was forced to

concede that, in her experience, Bruce could not have recovered a

separate fee each time the retouched photograph appeared in a T-

shirt advertisement. Accordingly, the district court, qua

factfinder, was entitled to make the crucial credibility

determination as between the competing expert witnesses. See,

e.g., Den Norske Bank AS v. First Nat’l Bank of Boston, 75 F.3d 49,

57 (1st Cir. 1996).4

D. Fees for T-Shirts Produced for World News But Not Sold

Further, Bruce argues that, in addition to the $800 in

licensing fees awarded to him for World News' use of his retouched

photograph on the two T-shirts, and the $8,642 in World News'

revenues realized from these T-shirt sales, he and his expert, Ms.

Blaney, testified that Bruce likely would have been able to

negotiate for a royalty of somewhere between $1 and $3 on each T-

shirt produced for World News, rather than merely those which World

News actually sold. He contends that some T-shirts were produced,

but never sold; for example, that World News allegedly gave some T-

4
Appellant tries to rely on Iowa State which is wholly
inapposite. That decision involved a different question under the
Copyright Act of 1909: even where plaintiff had failed to prove
actual damages, the court nonetheless was required by statute to
award “in lieu” minimum damages for each infringement. Thus,
unlike the instant case, there the court needed to determine how
many discrete infringements were committed by the defendants. See
Iowa State Univ. Res. Found., 475 F. Supp. at 81.

11
shirts away to customers purely for promotional purposes.

The present contention fails due to the fact that (i)

Bruce provided no conclusive evidence that there has ever been any

such continuing-royalty contract in the industry, and (ii) Ms.

Blaney, his own expert witness, conceded that, in twenty-five years

of experience, she had yet to encounter such a contractual

arrangement. Similarly, the expert witness presented by World News

testified that there was no prevailing industry practice for

recovering per-use royalties for promotional items, such as the two

T-shirts here involved, which have a relatively short lifespan and

little enduring commercial viability. Accordingly, the district

court decision declining the Bruce request for royalties did not

constitute clear error. See Den Norske Bank AS, 75 F.3d at 57.

Nonduplicative Damages

A. World News' Advertising Profits and Sales Revenues

Bruce next contends that the district court erred in

refusing to award him a share of the net profits which World News

realized from its advertising revenues and newstand or subscription

sales attributable to its uses of the retouched photograph. Bruce

asserts that due to World News' failure to produce evidence of its

gross revenues during discovery, he was forced to estimate those

revenues, based on his own ad hoc formula. See Blackman v. Hustler

Magazine, Inc., 800 F.2d 1160, 1164 (D.C. Cir. 1986) (fashioning

similar remedy where copyright defendant frustrated plaintiff’s

12
access to evidence relating to profits). This contention is

baseless.

In order to recover profits, Bruce need only have

established World News' gross revenues, at which point the burden

would have shifted to World News to establish that all or part of

the gross revenues were attributable to factors other than the

copyrighted work. See 17 U.S.C. § 504(b); Data Gen. Corp., 36 F.3d

at 1173. Although a copyright plaintiff need not prove

nonduplicative profits with mathematical certainty, neither can his

proffer be “unduly speculative.” Id. at 1171 (citing Bus. Trends

Analysts, Inc. v. Freedonia Group, Inc., 887 F.2d 399, 404 (2d Cir.

1989) and Stevens Linen Assocs., Inc. v. Mastercraft Corp., 656

F.2d 11, 14 (2d Cir. 1981)).

Bruce made no earnest attempt during discovery to obtain

all the available evidence relating to World News' gross revenues.

Instead, he merely requested that World News produce documents

relating to the profits “derived in any way or realized from the

use of Plaintiff’s Photograph.” Although the request was arguably

ambiguous, World News unambiguously responded that it had earned no

revenues from its use of the Bruce photograph, except from the T-

shirt sales. Bruce neither objected to the World News response to

his interrogatories, nor moved to compel discovery of all World

News documents relating to gross revenues realized during the

infringement period. Thus, rather than diligently pursuing the

13
most dependable and nonspeculative evidence as to World News' gross

revenues, Bruce deliberately elected to concoct a more lucrative

calculation, based upon questionable estimates and samplings,5

rather than internal documents in the possession of World News.

See, e.g., Worster v. U.S. Postal Serv., No. 99-00726, 2002 WL

242348, at *1 (4th Cir. Feb. 20, 2002) (holding that party’s

failure to file motion to compel production of documents waives

argument on appeal); cf. Blackman, 800 F.2d at 1164 n.8 (noting

that plaintiff had made specific discovery request for all revenue

data).6

B. Apportionment of Profits

Finally, Bruce maintains that the district court erred in

apportioning (on a 50-50 basis) between himself and World News, the

profits generated from the T-shirt sales, on the ground that

Bruce’s original photograph was responsible, at most, for one half

the effectiveness of the retouched photograph. He contends that

the repetitive use of the retouched photograph by World News turned

it into a sort of icon, which resulted in a valuation which

exceeded the sum of its two components, see Bus. Trends Analysts,

5
Nor did Bruce adduce expert evidence that his calculus was
reasonable or fairly representative. Instead, for example, in
estimating the World News newstand sales, Bruce simply assumed that
World News took in the full cover charge on each sale, even though
it is obvious that others in the distribution chain would have
received a share.
6
Not surprisingly, Bruce submitted no reply brief on appeal in
response to the waiver argument made by World News.

14
Inc. v. Freedonia Group. Inc., 887 F.2d 399, 407 (2d Cir. 1989)

(noting that apportionment may be “impossible” where two concepts

have become too intertwined), or made apportionment so speculative

that the benefit of any doubt should redound to plaintiff’s favor,

see Walker v. Forbes, Inc., 28 F.3d 409, 414 (4th Cir. 1994).

We review the issue of apportionment under the copyright

statute for abuse of discretion only. See Data Gen. Corp., 36 F.3d

at 1176 (noting that apportionment of profits requires courts to

balance various equitable factors, in a “delicate exercise informed

by considerations of fairness and public policy”). The district

court was well within its discretion in its conclusion that Bruce’s

original photograph (of Clinton and the Secret Service agent) was

so routine and generic that it had very little market appeal,

whereas the bizarre nature of the retouched photograph gave it

exponentially greater appeal. The district court aptly cited case

law where generic copyrighted material was later enhanced by so-

called “star power,” such as Sheldon v. Metro-Goldwyn Pictures

Corp., 309 U.S. 390, 398 (1940), and where plaintiff was awarded

far less than a 50% share. Bruce, 150 F. Supp. 2d at 318. In

light of these precedents, the district court not only did not

abuse its discretion, it arguably was generous in apportioning as

much as 50% of the profits to Bruce.

The judgment is hereby vacated in part, and the case

remanded to the district court, with directions to modify the final

15
order and judgment so as to increase appellant’s damages award by

$5,500, for a total award of $25,642.45. In all other respects,

the district court judgment is affirmed. Each party shall bear its

own costs. SO ORDERED.

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