Chicago Business Litigation Lawyer Blog
A recent decision in the case of Huffman v. Activision, a case we previously covered here, has created a split among federal courts on the issue of who gets to decide the issue of disgorgement of profits in copyright infringement cases. The court in Huffman ruled that a jury is entitled to decide the issue. Other courts to recently consider the issue have come to the opposite conclusion finding that the court should decide the issue, not a jury. These differing answers to the same question may be teeing up the issue for the Supreme Court to settle the question once and for all.
As we have previously detailed, Huffman involves claims by retired professional Booker T that video game developer, Activision, infringed on his copyrights. Specifically, Huffman has alleged that Activision’s video game character, David “Prophet” Wilkes, in Call of Duty: Black Ops 4 infringed his own “G.I. Bro” character. Huffman requested that the issue of disgorgement of Activision’s profits be decided by a jury. Activision moved to strike Huffman’s jury demand.
In its motion, Activision argued that Section 504(b), the section of the Copyright Act dealing with disgorgement of an infringer’s profits, does not provide a statutory or constitutional right to a jury trial. Activision’s motion was filed on the heels of a decision on essentially the same issue in the case Navarro v. Procter & Gamble in which the court in that case found no right to a jury on the issue of disgorgement of an infringer’s profits under Section 504(b). Despite concerning the same issue, the district court disagreed with the reasoning and conclusion of the Navarro court and denied Activision’s motion.
The plaintiff in Navarro is Anette Navarro, a world-renowned photographer, from Cincinnati, Ohio. She filed a copyright infringement suit against Procter & Gamble (P&G) and Walmart alleging that the companies willfully infringed on her copyrights in certain photos that she provided to P&G for use pursuant to licensing arrangements between the parties. Navarro claims that P&G violated the terms of the license by using them on products and in geographic areas beyond those permitted in the license agreements and also continued to use her photographs after the licenses expired.
She sought both actual damages and disgorgement of the defendants’ profits under Section 504(b) of the Copyright Act. P&G and Walmart sought to strike her jury demand with regard to disgorgement of profits, arguing that nowhere does Section 504(b) mention juries. They also argued that there was no constitutional right to a jury under the Seventh Amendment because it only provides a right to a jury for “legal” remedies, not “equitable” remedies which the companies argued disgorgement was.
The Navarro court agreed with the defendants on both arguments. It found that, although Congress knew how to include an express right to a jury, Section 504(b) lacked any mention of a right to a jury. Additionally, the Court found that the history of the disgorgement remedy weighed in favor of considering the right equitable and thus outside the purview of the Seventh Amendment.
Although Activision repeated these same arguments, the Huffman court found them unpersuasive. The Huffman court, relying on canons of statutory interpretation, considered Section 504(b) in context of the surrounding sections of the Copyright Act. As the Court noted, Congress expressly stated that “the court” was tasked with deciding certain issues in Sections 502, 503, 504(c), and 505 but omitted the phrase from Section 504(b). This omission, the Court found was intentional and weighed in favor of finding that the issue of disgorgement should be decided by the jury.
Having found a statutory right to a jury on the issue of disgorgement of profits, the Court explained that it was not necessary to decide the issue of whether there was a constitutional right to a jury. Both the Huffman and the Navarro courts discussed the 2019 case of Fair Isaac Corporation v. Federal Insurance Company which considered the same issue and came to the same conclusion as the Navarro court. The ruling on Activision’s motion likely came as a shock to the company as its arguments had carried the day in both the Fair Isaac and Navarro cases. It remains to be seen whether the Supreme Court will ultimately step in and resolve the issue.
Super Lawyers named Illinois business trial attorney Peter Lubin a Super Lawyer in the Categories of Class Action, Business Litigation, and Consumer Rights Litigation. Lubin Austermuehle’s Illinois intellectual property litigation lawyers have over three decades of experience litigating complex copyright, trademark, trade secret, class action, non-compete agreement, consumer rights and many different types of business and commercial litigation disputes. Our Chicago and Wheaton business dispute lawyers handle emergency business lawsuits involving injunctions, and TROS, non-compete agreements, franchise, distributor and dealer wrongful termination lawsuits and many different kinds of business disputes involving shareholders, partnerships, closely held businesses and employee breaches of fiduciary duty. We also assist businesses and business owners who are victims of fraud. You can contact us by calling at 630-333-0333. You can also contact us online here.