Monetary damages are available for copyright infringement, but it is often difficult to calculate what those damages are. For example, in the case of On Davis v. The Gap, Inc. (246 F.3d 152 (2d Cir. 2001)) On Davis made sunglasses and had a copyright on them. The Gap ran an ad with a model who was wearing On Davis' sunglasses. On Davis sued for copyright infringement. On Davis won, but the question was how to calculate damages under 17 U.S.C. 504. The Court found that a copyright plaintiff must establish "with reasonable probability the existence of a causal connection between the infringement and a loss of revenue." The Court considered:

  • Actual Damages:
    • Lost licensing revenue (assume that the Gap had licensed the use at a reasonable royalty). On Davis suggested:
      • $2 per image x 250,000 copies of the ad, or
      • $1 per image x 2,000,000 customers
    • The Gap argued that On Davis had once licensed a similar sunglasses for a similar ad for only $50, so that was a good number.
    • Lost sales
      • On Davis probably didn't lose any sunglasses sales because of The Gaps' infringement.
  • Infringers' Profits:
    • The Gap made $1.668 billion that quarter, which was about 10% more than they made the previous quarter.
      • But how much was because of On Davis' sunglasses? Probably very little. You have to show a reasonable relationship between the sales and the infringement. It was way too speculative to guess at how many more clothing sales were attributed to On Davis' sunglasses in the ad.
  • Statutory Damages:
    • Under 17 U.S.C. 412 (and 504(c)), they are only available if the copyright holder has registered the copyright prior to the infringement! On Davis had not registered the copyright until after the ad ran, so no statutory damages were available.
      • Technically they only have to have filed before the infringement (or within 3 months of publication)
In the end, the Appellate Court found that a reasonable royalty that The Gap would likely have paid for use of the glasses was somewhere close to the $50 that on Davis had previously licensed their sunglasses for.