les Nouvelles August 2018 Article of the Month
“More Blurred Lines: On Downstream Infringement And The Disgorgement Of Profits” by Peter Rybolt, Analysis Group Inc., Los Angeles (USA)
In copyright, as well as trademark litigation, litigants and finders of fact face the often bewildering task of determining the extent to which downstream infringers—those companies one or more steps removed from the creative work at issue—may have benefited when someone upstream has usurped another’s work. Often, the results at trial are contradictory. We first review the history and purpose of the disgorgement remedy, identifying tension in the case law and statutes when the subject turns from competitors to downstream infringers. We look at three well-known cases from the world of recorded music—including the recent Blurred Lines decision—highlighting unexplained differences in the treatment of record companies when songwriters are accused of infringement. We then review our understanding of how firms capture value, and illustrate how that understanding can lend guidance to juries in assessing the profits to be disgorged. Our intent is to help reconcile observed differences in the treatment of downstream infringers.