while he is the owner of it." An example of a "beneficial owner" for this purpose would be an author who had assigned legal title to his copyright to a publisher in exchange for an agreement to pay him a percentage of all receipts; if for some reason the publisher would not bring an action against an infringer, the author could do so.

The last two sentences of section 501 (b) are intended not only to protect the interests of other owners of exclusive rights but also to avoid a multiplicity of suits where an infringement action is brought by the owner of less than all of the exclusive rights under a copyright. Their provisions would supplement those of the Federal Rules of Civil Procedure, which already give the courts wide discretion to require or permit joinder of parties. Section 501 (b) provides:

The court may require him [the plaintiff] to serve written notice of the action with a copy of the complaint upon any person shown, by the records of the Copyright Office or otherwise, to have or claim an interest in the copyright, and shall require that such notice be served upon any person whose interest is likely to be affected by a decision in the case. The court may require the joinder, and shall permit the intervention, of any person having or claiming an interest in the copyright.

It has been suggested that the plaintiff should be required in all cases, without exception, to serve notice on "any person shown, by the records of the Copyright Office or otherwise, to have or claim an interest in the copyright." However, it seems to us that an absolute requirement such as this would be burdensome and would serve no purpose in most cases. It should be sufficient to require notice in those cases where the court has some reason to think that another person's "interest is likely to be affected by a decision in the case." Note also that the court has discretion to require joinder as under the Federal Rules, but that it must permit intervention of anyone "having or claiming an interest in the copyright" who wishes to intervene.

B. REMEDIES FOR INFRINGEMENT

1. INJUNCTIONS

Section 502 (a) empowers "[a]ny court having jurisdiction of a civil action arising under this title ***, subject to the provisions of section 404 (b) of this title and of section 1498 of title 28, ***" to "grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain infringement of a copyright." This is simply a reaffirmation of the usual power of courts to grant injunctions and restraining orders, whether "preliminary," "temporary,” “interlocutory," "final," or "permanent." The provisions of section 404 (b), dealing with injunctions in actions against innocent infringers misled

by the omission of a copyright notice, were discussed in chapter 5. The reference to section 1498 of title 28 of the United States Code makes clear that section 502 of the bill would not permit the granting of an injunction against an infringement for which the Federal Government is liable under section 1498.

Subsection (b) of section 502 restates provisions found in sections 112 and 113 of the present statute, making it possible for a copyright owner who has obtained an injunction in one State to enforce it against a defendant located in another State. As recommended in the 1961 Report, these provisions have been "retained in substance."

2. IMPOUNDING AND DISPOSITION OF INFRINGING ARTICLES

The 1961 Report had also recommended retaining the substance of both section 101 (c) of the present law, which deals with the impounding “during the pendency of the action," of articles alleged to be infringing, and of section 101 (d), which concerns the destruction of "copies or devices." Section 503 carries out that recommendation with some changes in details.

Under subsection (a), the court is given discretion to order the impounding of "all copies or phonorecords claimed to have been made or used in violation of the copyright owner's exclusive rights," together with plates, molds, matrices, etc., for their reproduction. Subsection (b) authorizes the court, "[a]s part of a final judgment or decree,” to "*** order the destruction or other reasonable disposition" of copies, phonorecords, plates, molds, matrices, etc. Both provisions can apply to copies or phonorecords "made or used" in violation of the plaintiff's rights, thus allowing the court to deal as it sees fit with articles which, though reproduced and acquired lawfully, have been used for infringing performances, exhibitions, rentals, etc.

Impounding under section 503 (a) may be done "[a]t any time while an action under this title is pending." This would permit the court to order the seizure of allegedly infringing articles as soon as suit has been filed, and without waiting for the issuance of an injunction.

We have been urged by representatives of the motion picture industry to delete from subsection (a) the phrase "on such terms as it may deem reasonable" in referring to the discretion of the court in impounding cases, and to substitute a clause reading: "under such special rules as may be promulgated by the Supreme Court of the United States in the Federal Rules of Civil Procedure or otherwise, for copyright seizure and impounding." It may well be that the problems of seizure and impounding in copyright cases are so special that separate, detailed rules governing the practices of all Federal courts are justified. However, the present statute contains no specific pro

vision referring to the Supreme Court rules, and we see no need to include one in the bill.

In connection with the disposition of infringing articles under section 503(b), it was pointed out that there may be cases where an order for destruction, as provided in the present law, could be wasteful or actually adverse to the plaintiff's best interests. We agree that the discretion of the court should be wide enough to permit, as part of the final judgment or decree, the sale of the infringing articles, their delivery to the plaintiff, or any other disposition it believes justified under the circumstances. Thus, under the subsection, the court may order destruction of the articles or any "other reasonable disposition" of them.

3. DAMAGES AND PROFITS

a. In General

Constant reminders of the trouble that careless legislative drafting can cause for future generations arise under the provisions dealing with damages and profits of section 101 of the present statute. In a detailed section having a direct and pervasive impact on the entire operation of the copyright law, it is remarkable how many of the most practical questions the statute leaves equivocal or unanswered. And, while one cannot blame the courts for going off in different directions, it is equally remarkable how many of these questions remain unsettled after 56 years. If for no other reason a revision of the copyright statute is badly needed to replace the ambiguity and uncertainty of section 101 with as clear and explicit a provision on damages and profits as possible.

At the outset two general questions, neither of which has been finally settled under existing law, need answers:

(1) Can actual damages and profits be recovered "cumulatively" or only "alternatively"?

(2) Is the plaintiff in an infringement suit free to elect whether he wishes to recover either actual damages and profits or, at his option, statutory damages with a fixed minimum?

On the first question the 1961 Report recommended that an infringer should be "liable for the actual damages suffered by the copyright owner, or the profits of the infringer attributable to the infringement, whichever is greater." As explained more fully below, this recommendation for "alternative" recovery has been modified in section 504 of the bill to allow for "cumulative" recovery of damages and profits under certain circumstances. On the second question the bill would make clear that it is the plaintiff's right to elect recovery of

statutory damages if he chooses. The groundwork for these general principles is laid in section 504 (a) as follows:

Except as otherwise provided by this title, an infringer of copyright is liable for either:

(1) the copyright owner's actual damages and any additional profits of the infringer, as provided by subsection (b); or

(2) statutory damages, as provided by subsection (c).

b. Actual Damages and Profits

An award of damages basically serves a different purpose from an award of profits. Damages are awarded to compensate the copyright owner for all of the losses caused him by the infringement, while an award of profits is intended to prevent the infringer from unjustly benefiting from his wrongful act. Profits are often used as a measure of the copyright owner's damages and, where they coincide in this way, it would be appropriate to award either damages or profits, whichever is greater. In that situation it would be unfair to award damages and profits "cumulatively," since in effect it would mean that the plaintiff would be recovering the same amount twice. On the other hand, there are cases in which the plaintiff has suffered losses not reflected in the defendant's profits, and the defendant has enjoyed profits that are attributable to his use of the plaintiff's work but are not considered in assessing damages. In these cases, as section 504 of the bill provides, it would be appropriate for damages and profits to be awarded "cumulatively":

The copyright owner is entitled to recover the actual damages suffered by him as a result of the infringement, and any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages.

Note that, under this language, only those profits of the infringer that are "attributable to the infringement" can be recovered. Where the court finds that some of the defendant's profits resulted from his infringing use of the copyrighted work and that his additional profits were the result of other factors, it should make its award on the basis of an apportionment.

In line with another recommendation of the 1961 Report, subsection (b) of section 504 also provides:

In establishing the infringer's profits, the copyright owner is required to present proof only of the infringer's gross revenue, and the infringer is required to prove his deductible expenses and the elements of profit attributable to factors other than the copyrighted work.

c. Statutory Damages

A unique, valuable, and controversial feature of American copyright law under the present statute is the right of the plaintiff in

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an infringement suit to recover, "in lieu of actual damages and profits," an award of statutory damages which, with some exceptions, “shall in no * * * case exceed the sum of $5,000 nor be less than the sum of $250." The 1961 Report dealt at length with this problem and, with some changes as noted below, its basic recommendations have been followed in the bill.

Clause (1) of section 504 (c) provides generally that :

*** the copyright owner may elect to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in the action, with respect to any one work, for which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally, in a sum of not less than $250 or more than $10,000 as the court considers just.

This clause represents an attempt to come to grips with the whole complex of problems that arise when awards of minimum statutory damages are to be applied to "multiple infringement” situations. For example, should the minimum award of $250 be multiplied when more than one work is infringed? When there has been a series of infringements of the same work? When a single enterprise has infringed several different exclusive rights? When more than one infringer is involved? These problems are intricate enough by themselves, and they usually arise in a variety of combinations. They can be crucial in a case where the court is not disposed to award more than the minimum recovery required under the statute.

In an action under the bill involving more than one infringementwhether the infringements are separate, isolated, or occur in a related series-a single award of statutory damages in the $250-$10,000 range could be made under the following circumstances:

(1) Where the infringements are all of "any one work." This marks a change from the 1961 Report's recommendations, which would have provided a single recovery of statutory damages for all infringements for which the infringer is liable. Under the bill, where separate works are involved, separate awards of statutory damages could be made. However, the bill makes clear that, although they may constitute separate works for other purposes, "[f]or the purposes of this subsection, all the parts of a compilation or derivative work constitute one work." Note that the criterion here is the number of distinct "works" infringed, and not the number of copyrights, exclusive rights, owners, or registrations involved.

***

(2) Where, with respect to the infringements in question, "any one infringer is liable individually, or any two or more infringers are liable jointly and severally." Where the infringements in suit were committed by joint tort-feasors, the bill specifies a single award of statutory damages for which they would be jointly and severally liable. Where, however, separate infringements, for which two or