## Facts

- Polar Bear Productions, Inc., owned the copyright to a white-water kayaking film and related footage used for promotional purposes.
- Timex Corporation hired Polar Bear to create kayaking footage featuring kayakers and equipment displaying the Timex logo.
- Timex obtained a limited license to use the footage for specified promotional purposes and a defined time period.
- After the license expired, Timex continued using the footage in promotional contexts, including trade shows and internal uses.
- Polar Bear alleged Timex also benefited from the footage through association with an advertisement involving Mountain Dew and through claimed brand-image gains.
- A jury found Timex liable for copyright infringement and awarded $2,415,000: $315,000 in actual damages and $2.1 million in Timex’s profits allegedly attributable to the infringement.
- Timex sought judgment as a matter of law challenging liability and damages; Polar Bear cross-appealed adverse pretrial rulings that had eliminated non-copyright claims.

## Issues

1. Whether Timex infringed by using the copyrighted footage beyond the time and scope of its license.
2. Whether the evidence supported the jury’s award of actual damages under 17 U.S.C. § 504(b), including claimed additional license fees and a “lost capacity” theory tied to foregone film sales.
3. Whether the evidence established Timex’s indirect profits “attributable to the infringement” under 17 U.S.C. § 504(b), including alleged profits linked to trade show sales, an advertisement, and general brand/image enhancement.
4. How § 507(b)’s three-year statute of limitations limited the temporal scope of recoverable damages.

## Decision

- The Ninth Circuit affirmed the finding of copyright infringement based on Timex’s post-license use exceeding the license scope.
- The court held the jury’s actual-damages award was not fully supported; speculative components (including the “lost capacity” theory) could not stand, and recovery was limited to non-speculative proof such as a reasonable license fee supported by the record.
- The court vacated the entire $2.1 million indirect-profits award because Polar Bear failed to prove a non-speculative causal nexus between the infringement and Timex’s revenues.
- The court affirmed in part, vacated in part, and remanded for further proceedings consistent with its opinion, with damages constrained by § 504(b) proof requirements and the § 507(b) limitations period.

## Legal Principles

- Use of a copyrighted work beyond the scope or duration of a license constitutes copyright infringement.
- Under 17 U.S.C. § 504(b), a plaintiff may recover (1) actual damages caused by infringement and (2) the infringer’s profits attributable to the infringement.
- Actual damages must be supported by concrete, non-speculative evidence; a reasonable license fee may be an appropriate measure when grounded in reliable proof.
- For indirect profits, the plaintiff must first show a causal nexus between infringement and the defendant’s gross revenues; only then does the burden shift to the defendant to apportion profits to non-infringing factors.
- Generalized theories tying infringement to broad corporate profits (e.g., brand prestige) are insufficient without specific, non-speculative evidence connecting the infringement to identifiable revenue streams.
- The three-year statute of limitations in 17 U.S.C. § 507(b) limits recovery to damages incurred within the permissible time window.

## Conclusion

The Ninth Circuit treated Timex’s continued use of licensed footage after expiration as infringement, but it sharply limited monetary recovery under § 504(b), rejecting speculative models of both actual damages and indirect profits and requiring a specific, non-speculative causal link between the infringement and any profits sought.


Polar Bear Prods., Inc. v. Timex Corp., 384 F.3d 700 (9th Cir. 2004)