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 Frank.
      • MGM never bothered to get Franks' permission to use their copyrighted material.
  • Frank sued MGM for copyright infringement.
  • 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, but remanded.
    • 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 and remanded.
    • 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.