Frank Music Corp. v. Metro-Goldwyn-Mayer Inc.
772 F.2d 505 (9th Cir. 1985)
886 F.2d 1545 (9th Cir. 1989)
MGM owned a hotel and casino.
They ran a musical revue where singers and dancers would recreate scenes
from famous Hollywood musicals.
The show had 10 numbers from
10 different musicals, including one number from a musical owned by
MGM never bothered to get
Franks' permission to use their copyrighted material.
Frank sued MGM for copyright
The Trial Court found for
Frank. MGM appealed.
The Trial Court found that the
damages were only $22k for all 1700 times MGM put on their show.
The Appellate Court affirmed,
The Appellate Court found
that the damages awarded by the Trial Court were insufficient.
The Trial Court calculated
damages. Frank appealed.
The Trial Court figured that
the show had 10 acts, and so Frank's scene was worth 1/10th the total
profit MGM made.
The Court found that because
of the set design, and costumes, and choreography etc, Frank was entitled
to only 25% of the profit from his one scene.
So between the two factors,
Frank was entitled to 4% of MGM's profits.
The Court also found that
indirect profits needed to be calculated, so if people were spending
money at the bars, or staying at the hotel longer because they wanted to
see the show, some of those profits should go to Frank also. The Court
figured that was about 2% of the hotel's entire profits.
The Appellate Court vacated
The Appellate Court noted
that under 17 U.S.C. §504, the
goal was to award damages proportionate to the contribution of the
copyright owner and no more.
The Court found that the
Trial Court should have enquired as to the relative value of the Frank
scene in the revue. Were patrons coming to see the show because they
wanted to see that one scene? Although Franks' portion was only 1/10th
of the running time, that didn't mean it was only worth 1/10th of the
value of the entire revue.
The Court found that while
the choreography and set design was worth something, Frank was due a much
higher percentage than 25%.
The Court found the
calculation of indirect profits was about right.
The Court awarded Frank prejudgment
interest on the money MGM owed him.