Well, none of us have fool-proof crystal balls here, and C/P have been virtually silent on this matter beyond what is stated in the original complaint (which will be obsolete once they file the expected amended complaint.) So I will admit that your guess as to how things will turn out is as good as mine. But that being said, I don’t see a great likelihood of C/P demanding return of donor money for two reasons:
1. As I stated before - relations between Axanar and its donors is not C/P’s concern. I think that C/P’s goal remains, and has always been, just to shut down Axanar as a “Star Trek” product. This is borne out by their initial complaint - which frankly seemed a bit half-hearted as it was most likely filed with the expectation that AP would fold without a fight. Now that Axanar has put up a fight, C/P may dig in and drop a carload of claims on them - but, again, to get the point across of “we’re serious, don’t mess with C/P”, not to decimate everyone involved for the sheer “wrath of God” joy of it.
2. I think we all overvalue what C/P would be able to recover from a jury if it won every copyright claim at trial - and that has a real bearing on what C/P could demand of Axanar in a settlement. The Copyright Act measure of damages is “plaintiff’s profits attributable to the infringement plus damages actually suffered by defendant.” (More on that second part later) Even though it’s clear that most donations and costs of goods (coffee) sold (“revenue”) are attributable to the infringement (everyone donated because of the ST connection, probably the same for the coffee), the “revenue” is not the same as the “profits attributable to the infringement”. The law specifically permits the defendant to deduct from revenue expenses of production/cost of goods (and other GAAP amounts), along with any revenue amounts that are attributable to factors other than the infringing goods themselves. (17 USC Sec. 504(b) - “In establishing the infringer's profits, the copyright owner is required to present proof only of the infringer's gross revenue, and the infringer is required to prove his or her deductible expenses and ... profit attributable to factors other than the copyrighted work.”
(Simple example - I make counterfeit DVDs of ST movies - it costs me $5 per DVD to make the copies and $1 per copy to ship them, and I charge $8 per copy. My revenue is $8/copy - but the law allows me to deduct my $6 in copying and shipping costs to arrive at the $2 profit I made. Plaintiff gets $2 per copy - the profit attributable to the infringement.)
So while we may “see” revenue (donations) of $1.5 million, C/P is probably not entitled to recover $1.5 million. They are basically entitled to recover whatever is left over after Axanar makes all deductions from revenue permitted by law (such as money spend on production to date, costs of the coffee and packaging, creation of models, and other allocable expenses.) And so what leverage does C/P have to force Axanar to pay back 100% of the donations if Axanar knows C/P would only get a fraction of that from the court if Axanar simply refused to settle?
As to the other possible amounts of recovery :
“Actual damages” - I don’t see any other “actual damages” C/P has suffered - they are pissed at Axnar, but haven’t been hurt by Axanar, other than the cost of attorneys. So I think this adds “zero” to money that would give leverage to force Axanar to give money back to donors.
“Attorneys fees” - the Copyright Act says that fees “may” be awarded, not “must” be awarded, so it is within the discretion of the judge. But C/P would keep any attorneys’ fees awarded, not tell Axanar “nah, don’t pay us, give it back to the donors instead. So I also think this adds “zero” to money that would give leverage to force Axanar to give money back to donors.
“Statutory damages” - a real wildcard, as the court can award as little as $100 per infringed work up to $150,000 per infringed work, or anywhere in between. But I don’t see statutory damages being on the high end of the scale here - the max amount is usually reserved for literal copying of a whole work, not “taking one small piece from this work (a character from one episode), and one piece from this other work (a ship design shown onscreen for 2 minutes out of a 48 minute show). Though the copying across multiple works was immense here in the aggregate, a judge could find the amount copied from any individual work was arguably small on a “per infringed work” basis and award correspondingly low statutory damages. So I don’t think statutory damages is going to “raise the pot” so much higher that C/P suddenly has leverage to say “settle and give $1.5 million back to the donors or you will be liable to us for much more”
And even if C/P could get the max statutory damages - why does anyone think they would tell AP to give it back to the donors rather than keep it themselves?
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Hey - please know that everything I say here is meant in a “friendly discussion” tone - I’m not trying to “school ya” or prove you wrong, because my crystal ball is no better or worse than yours and time may prove you 100% right and me wrong. But based on my experience with the law and the claims C/P has raised to date, I just can’t personally get behind the theory that C/P is going to do anything that would put much - if any - of the donor’s money back in their hands. Donors need to be realistic about this and start looking into their own rights to get that money back.
M
