Methodologies for assigning damages in copyright litigation involving value-destroying copying
Eric K. Clemons, Stina Teilmann-Lock · Journal of Intellectual Property Law & Practice · 2021
We begin by noting that some forms of copying destroy far more value than they create, and that this complicates determination of harm and the calculation of damages. Some copying causes no harm to the original creator, and some copying may actually add value to the original creator; these are not problematic. Some unauthorized copying results in loss of sales to the original creator due to sales of the infringing products; harm from this form of substitution is well understood. But other forms of unauthorized copying lead to loss due to avoidance caused by reputational damage. Some forms of unauthorized copying may damage or destroy the reputation of the original creator. That is the focus of this article. Some forms of copying may enhance access to creative designs, as when a Paris fashion show inspires new trends in affordable stylish off-the-rack clothing. This enhances the status of the creators as trend-setters, while their elite clientele continues to buy the authentic originals. In contrast, other forms of copying mimic not only the design but the look and feel of the original designers’ marketing, or ‘trade dress’ This makes it appear as if the original design firm itself has endorsed the inexpensive copies as line-extensions, and can destroy the reputation of the firm and eliminate its ability to signal status to its clientele. In this case the value of the firm can be destroyed as well. We explain the nature of value-destroying copying. By clarifying the role of reputational damage and value-destroying copying we may provide guidance to the courts, and potentially to regulators.