## Facts

- Ocean Atlantic Woodland Corporation acquired the copyright to two site-specific land-development plans for the “Liberty Grove” parcel in Plainfield, Illinois.
- The plans were tied to the parcel’s contours and an annexation agreement governing development of that land.
- Ocean Atlantic no longer had the entitlement or ability to develop the Liberty Grove parcel by the time of the alleged infringement.
- DRH Cambridge Homes, Inc., along with engineering and land-planning firms, proceeded with development of the Liberty Grove parcel.
- Ocean Atlantic sued for copyright infringement, alleging defendants copied and used the Liberty Grove plans without authorization.
- Discovery disputes arose over the scope of damages-related discovery, including requests for project finances and profits, and whether discovery should be staged.

## Issues

1. How “actual damages” should be measured for alleged infringement of a site-specific land-development plan when the copyright owner cannot exploit the underlying property.
2. Whether 17 U.S.C. § 504(b) permits recovery of both defendants’ development profits and defendants’ saved acquisition or license costs for the plans.
3. Whether the court should bifurcate discovery under Federal Rule of Civil Procedure 42(b) to address liability before damages and profits discovery.

## Decision

- The court held that alleged infringement did not affect the plan’s market value to Ocean Atlantic because Ocean Atlantic could not develop the site for which the plans were created.
- The court limited damages to a value-of-use measure (e.g., a reasonable license fee or saved acquisition cost) rather than defendants’ full development profits.
- The court ruled that seeking both saved acquisition costs and development profits would constitute impermissible double counting under § 504(b).
- In later case-management rulings, the court bifurcated discovery, permitting liability discovery first and deferring damages/profits discovery until after liability was established.
- The court restricted broad requests for defendants’ financial and business records as premature and disproportionate given the narrowed damages theory and uncertainty about liability.

## Legal Principles

- Under 17 U.S.C. § 504(b), actual damages may be measured by the value of the infringing use to the infringer (often reflected in a reasonable license fee or saved acquisition cost), particularly where the copyright owner could not have realized the claimed downstream profits.
- Section 504(b) bars double recovery: infringer’s profits may be awarded only to the extent not already accounted for in computing actual damages.
- Profits from a complex real-estate development are not automatically “attributable to the infringement” where profits largely derive from non-copyright inputs and awarding them would duplicate a value-of-use recovery.
- Under Rule 42(b), a court may bifurcate discovery to resolve liability before allowing burdensome damages discovery, especially where liability is uncertain and requested financial discovery is extensive.

## Conclusion

The court treated the site-specific development plans as having limited compensable value to a copyright owner who could not develop the underlying land, confined damages to a value-of-use measure, rejected development-profit theories as duplicative under § 504(b), and managed the case by staging discovery so that damages and profits discovery proceeded only if liability were shown.


Ocean Atlantic Woodland Corp. v. DRH Cambridge Homes, Inc., 262 F. Supp. 2d 923 (N.D. Ill. 2003)