936 F.2d 692
SYNOPSIS: Plaintiff sought review of the amount of damages awarded in its favor by the United States District Court for the Southern District of New York in a breach of contract and copyright infringement actions, and defendants sought review of judgment and award to plaintiff.
-U.S. Naval Institute (Plaintiff), as the assignee for the book The Hunt for Red October, sued Charter Communications and Berkley Publishing Group for breach of a licensing contract.
-The contract was an exclusive license to publish a paperback edition of the book, not sooner than October 1985.
-The publishers breached this contract by initiating retail sales on September 15, 1985. Early sales were substantial enough to put the book near the top of paperback best seller lists before the end of September.
-Plaintiff sought review of the amount of money damages it was awarded in a breach of contract and copyright infringement action.
-The court reviewed the copyright infringement claim and determined that according to the agreement between the parties, defendants became the owner of the right to publish the paperback book, therefore, its publication could not constitute copyright infringement.
-However, defendants were in breach of contract, and the court determined that plaintiff was entitled to money damages.
-The court held that as to the quantification of that loss, it was within the prerogative of the court as finder of fact to look to plaintiff's sales.
-The court determined it was not error to lay the normal uncertainty in such hypotheses at the door of the wrongdoer who altered the proper course of events, instead at the door of the injured party.
-The court held that the prejudgment interest award was appropriate.
-Since the purpose of damages for breach of contract is to compensate the injured party for the loss caused by the breach, those damages are generally measured by the plaintiff's actual loss.
-While on occasion the defendant's profits are used as the measure of damages, this generally occurs when those profits tend to define the plaintiff's loss, for an award of the defendant's profits where they greatly exceed the plaintiff's loss and there has been no tortious conduct on the part of the defendant would tend to be punitive, and punitive awards are not part of the law of contract damages
The court reversed the copyright infringement award holding defendants were the owner of the copyright and publication of the paperback could not constitute copyright infringement, and affirmed the award for breach of contract in favor of plaintiff because the calculations used were not erroneous.
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