## Facts

- Contemporary Arts, Inc. created and copyrighted a “Cocker Spaniel” statuette.
- A competitor produced unauthorized copies of the statuette.
- F.W. Woolworth Co. purchased the infringing statuettes from the competitor and sold them in its retail stores.
- Contemporary Arts sued Woolworth (and the copier) for copyright infringement.
- Woolworth conceded it sold infringing goods but argued damages should be limited to its modest net profits from those sales (about $900).
- The district court found infringement and awarded statutory damages under § 101(b) of the Copyright Act of 1909 in an amount substantially exceeding Woolworth’s net profits, considering the scale of sales and deterrence.

## Issues

1. Under § 101(b) of the Copyright Act of 1909, may a court award statutory damages that substantially exceed the infringer’s proven profits and the copyright owner’s provable actual damages?
2. Must a statutory-damages award be tied strictly to the infringer’s net profits or the plaintiff’s demonstrated loss?
3. When set within the statutory range, when does a statutory-damages award become an abuse of discretion or an impermissible penalty?

## Decision

- The Supreme Court affirmed.
- The Court held that § 101(b) permits a discretionary statutory-damages award within the statutory range even when it exceeds proven profits and actual damages.
- The Court rejected Woolworth’s argument that damages must effectively be capped at net profits.
- The Court concluded the award was within statutory limits and not so severe as to be wholly disproportionate to the offense.

## Legal Principles

- Under § 101(b) of the 1909 Act, a copyright plaintiff may elect statutory damages in lieu of proving actual damages and infringer profits, and the court may set an amount “as it deems just” within the statutory range.
- Statutory damages serve not only compensation but also deterrence; Congress intended that infringers not retain a benefit from wrongful conduct.
- In selecting a statutory amount, a court may consider the volume of infringing sales, probable profits, and the practical difficulty of proving full damages or discovering profits.
- Gross receipts are not automatically the measure of damages, but they may be considered as evidence of the magnitude of infringement when setting statutory damages.
- Appellate review is limited; a statutory award within the prescribed range will be upheld absent abuse of discretion, such as an award wholly disproportionate to the offense.

## Conclusion

The Court upheld a statutory-damages award exceeding the retailer’s small proven net profits, ruling that § 101(b) authorizes trial courts to set a just amount within the statutory range to compensate and deter, and that considering sales volume and proof difficulties does not constitute an abuse of discretion.


F.W. Woolworth Co. v. Contemporary Arts, Inc., 344 U.S. 228 (1952)