309 U.S. 390 (U.S. Supreme Court 1940)
Sheldon v. Metro-Goldwyn Pictures Corp.
In a copyright infringement accounting of the defendant's profits, may a court apportion and award only the profits reasonably attributable to the infringing use of the plaintiff's work, and if so, who bears the burden of proving what portion of profits is due to non-infringing factors?
Under the Copyright Act of 1909's profits remedy (then codified at 17 U.S.C. § 25(b), now reflected in 17 U.S.C. § 504(b)), a copyright owner may recover the infringer's profits attributable to the infringement. The plaintiff must show the infringer's gross revenues from the infringing work; the defendant bears the burden to prove deductible expenses and to demonstrate what portion of its profits is attributable to factors other than the copyrighted material. Courts may apportion profits using reasonable approximations and expert or other competent evidence; mathematical exactness is not required. If the defendant fails to carry its burden, the plaintiff may recover the infringer's entire profits.
Yes. Profits in a copyright accounting should be limited to those attributable to the infringement. The infringer bears the burden to segregate and prove profits due to non-infringing elements. Where the defendant presents a reasonable basis for apportionment, the court should award only the portion of profits fairly attributable to the infringing use, even if the result is only an approximation. The Supreme Court affirmed the apportionment and resulting partial profits award.
Sheldon is the foundational case on apportionment of profits in copyright law. It sets the modern burden-shifting framework embraced in 17 U.S.C. § 504(b): the plaintiff shows gross revenue; the defendant proves deductible costs and the portion of profits attributable to non-infringing contributions. The decision legitimizes reliance on expert and industry evidence to perform inherently inexact allocations and has shaped how courts handle complex, multi-factor works like films, songs, software, and advertising campaigns. For law students, Sheldon illuminates core remedial principles—equity, causation, and evidentiary burdens—that recur throughout intellectual property litigation.