The determination of copyright damages is uniform more throughout the United States than the determination of trade-secret damages because substantive copyright law is federal law exclusively. However, copyright appeals from federal courts are not handled by a single circuit court. Consequently, the determination of copyright damages is not as uniform as in patent cases.
The types of damages that are available for copyright infringement are, not surprisingly, similar to the types of compensatory damages that are available for design patent infringement. Such damages can take three forms, actual damages, the infringer’s profits and statutory damages.
Actual damages for copyright infringement can fall into three categories. The first category is lost profits. Lost profits can be determined by various methods and can include both direct profits and indirect profits.
The second category is a reasonable royalty. Within the context of copyright infringement, the phrase “reasonable royalty” is closer to an established royalty because it is based upon the established royalties and royalty rates for comparable types of copyrighted works.
The third category is a “fair market test.” The “fair market test” is similar to the willing licensor/willing licensee hypothetical negotiation method that is commonly used in patent law to determine a reasonable royalty.