Sheldon v. Metro-Goldwyn Pictures Corp

Brief Fact Summary. Playwright and copyright-infringing movie studio disputed the amount of movie profits that the playwright should be awarded. Playwright and copyright-infringing movie studio disputed the amount of movie profits that the playwright should be awarded.

Synopsis of Rule of Law. There is no basis to award someone who has had his copyright infringed upon any amount of profits made by the infringer above that which cannot be attributed to the infringement itself.

Facts. Sheldon (Plaintiff) wrote and copyrighted “Dishonored Lady,†the play based on a true story of Madeleine Smith, who was tried for the murder of her lover in Scotland in 1857. Metro-Goldwyn Pictures Corp. (M-G Pictures) (Defendant) had entered into negotiations to buy the rights to the play in order to produce a movie, but the negotiations fell through , and Defendant produced a movie entitled “Letty Lynton†which was based on a novel about the same subject. Sheldon (Plaintiff) charged infringement of his play and sought an injunction and an accounting of profit. The court of appeals ruled against Defendant, concluding that it had infringed upon the copyright of Plaintiff’s play. They had a further dispute over how much of the movie’s profits should be awarded to Sheldon (Plaintiff).

Issue. In the apportionment of an award of profits for copyright infringement, may the apportionment be prorated to give the author only the part of the profits attributable to the use of the infringed material?

Held. (Hughes, C.J.) Yes. In the apportionment of an award of profits for copyright infringement, may the apportionment be prorated to give the author only the part of the profits attributable to the use of the infringed material. The purpose of awarding profits to Sheldon (Plaintiff), whose work has been infringed upon, is just compensation for the violation by Metro-Goldwyn Pictures Corp. (Defendant). An award such as this is not intended to impose a penalty on Defendant by giving Plaintiff profits “which are not attributable to the infringement,†but to prevent Defendant from unjust enrichment. There is nothing in either the Copyright Act of 1909 or in subsequent case law that would allow a court to award profits for which there has been no showing of being due to the infringement itself.

Discussion. It would be unfair to let Metro-Goldwyn Pictures Corp. (Defendant) profit at the expense of Sheldon’s (Plaintiff) work. However, it would be just as unfair to let Plaintiff reap a profit from certain parts of the “Letty Lynton†movie, since those parts were not based on Plaintiff’s play. The Court, therefore, sought to protect each of the two entities’ “original†portions of their respective work.