## Facts

- Stevens Linen Associates, Inc. created an upholstery fabric design, “Chestertown,” in 1976, publicly displayed it, began sales, and obtained a federal copyright registration.
- Stevens displayed Chestertown at a national furniture market; a designer for competitor Mastercraft Corporation attended the market.
- After the market, Mastercraft produced and sold two fabrics, “Rio Grande” and “Grand Canyon,” that were found substantially similar to Chestertown.
- Stevens sued for copyright infringement in 1979.
- The district court entered a preliminary injunction barring sales of the Mastercraft fabrics; the injunction was summarily affirmed on appeal.
- After a bench trial, the district court found infringement, entered a permanent injunction, and awarded attorney’s fees, but denied compensatory damages as too speculative.
- Stevens appealed only the denial of compensatory damages; infringement and validity were not contested on appeal.

## Issues

1. Whether a court may deny all compensatory damages for copyright infringement as “too speculative” after infringement and some injury are established.
2. Whether the evidence was sufficient to require a monetary award under 17 U.S.C. § 504(b) (actual damages and infringer’s profits), even if the precise amount required estimation.

## Decision

- The Second Circuit modified the judgment and remanded for computation of compensatory damages.
- The court held the district court erred by refusing any damages solely because the amount was difficult to calculate.
- The court directed the district court to determine a reasonable damages award on the existing record consistent with § 504(b)’s allocation of proof.

## Legal Principles

- Once infringement and the existence of some injury are shown, uncertainty as to the amount of damages does not bar recovery; the law permits a just and reasonable estimate.
- A court should prefer fair approximation of damages over denying monetary relief where the wrong is established and the record supports an estimated range.
- Under 17 U.S.C. § 504(b), the copyright owner must show the infringer’s gross revenues from the infringing work; the infringer bears the burden to prove deductible expenses and apportion profits to non-infringing factors.
- Any remaining uncertainty in measuring damages attributable to infringement may be resolved against the infringer rather than used to defeat recovery.

## Conclusion

The Second Circuit ruled that established infringement with reasonably inferable economic harm requires some compensatory award under § 504(b), even when damages cannot be calculated with precision, and remanded for the district court to compute damages using reasonable estimation and the statute’s burden-shifting framework.


Stevens Linen Assocs., Inc. v. Mastercraft Corp., 656 F.2d 11 (2d Cir. 1981)