RIPPLE, Circuit Judge.
The defendants challenge the district court's finding of willful violations of federal copyright law. They also contest the court's damages calculations and attorney's fee award. For the following reasons, we affirm the judgment of the district court.
The plaintiffs are copyright owners and members of the American Society of Composers,
Charlie Club first entered into a licensing agreement with ASCAP in 1979; the agreement covered music played in connection with the bar, restaurant, and nightclub operations. These licenses periodically were renewed and adjusted to reflect changes in the operations of the various Charlie Club locations, as well as in the licensing policies of ASCAP. In 1983, however, ASCAP brought a copyright infringement action against Charlie Club for activities allegedly occurring at unlicensed locations. This action was settled when Charlie Club agreed to obtain appropriate licensing contracts to cover the activities at each of its locations. From 1984 to 1987, Charlie Club paid appropriate fees to ASCAP in accordance with these agreements.
Charlie Club operations underwent a significant transformation during 1986 and 1987. At this time, Charlie Club began to cut back on the scope of its restaurant/nightclub activities, and eventually eliminated them in the summer of 1988. Concurrently, the parties became embroiled in a dispute over the amount of licensing fees due. As a result, Charlie Club paid no fees to ASCAP after 1987, and in August 1987, ASCAP terminated all Charlie Club licenses.
This case involves two separate forms of copyright infringement, the occurrence of which Charlie Club does not dispute. First, Charlie Club played radio music over loudspeakers at three of its locations. Second, taped music was played during organized group aerobic workouts at some of these same facilities. These alleged infringements occurred after the termination of Charlie Club's licenses in 1987. Charlie Club maintains that, after the cessation of the restaurant/nightclub operations, it was unaware of the need to secure a new license to cover any other activities. Moreover, it also asserts that a letter mailed by ASCAP on March 22, 1988, detailing Charlie Club's obligations, was never received. Apparently, this letter mistakenly was sent to one of the Charlie Club facilities instead of to the corporate headquarters.
B. District Court Proceedings
The plaintiffs instituted two separate actions, which were consolidated for trial, involving a total of thirteen alleged instances of copyright infringement.
The court enjoined Charlie Club from further unauthorized use of the plaintiffs' copyrighted music. Furthermore, the plaintiffs received statutory damages in the amount of $40,000, approximately three times the amount of the expectable license fees that Charlie Club would have owed had it secured licenses. Finally, the court granted costs and attorney's fees totaling $48,633.37. Charlie Club filed a timely notice of appeal challenging various elements of the district court's decision.
A. Willful Infringement
Charlie Club does not dispute the occurrence of the alleged infringements. It does assert, however, that the district court erroneously characterized these infringements as willful. Charlie Club maintains that its conduct was not willful because it was unaware that a license was necessary to cover the challenged activities. Therefore, Charlie Club argues, the copyright violations were merely innocent infringements.
The district court's finding of willfulness is a factual determination that we shall not disturb unless the finding is clearly erroneous. See International Korwin Corp. v. Kowalczyk, 855 F.2d 375, 380 (7th Cir.1988). In applying this standard of review, "we must remember that a trial judge, in making such factual determinations, has every right to choose between two permissible views of the evidence." Id.
Charlie Club raises several aspects of the district court's decision, which it contends constitute clear error. First, Charlie Club attacks the court's conclusion that ASCAP provided notice concerning the alleged infringements. While not necessarily an essential element, "evidence that notice had been accorded to the alleged infringer before the specific acts found to have constituted infringement occurred is perhaps the most persuasive evidence of willfulness...." Video Views, Inc. v. Studio 21, 925 F.2d 1010, 1021 (7th Cir.1991). Here, the court relied on the March 22, 1988 letter as proof of Charlie Club's notice concerning the need for licensing. Although the letter was sent to a Charlie Club facility, we see no reason to disturb the court's conclusion that the letter reached corporate headquarters. The letter clearly provided Charlie Club with notice. The letter specifically informed Charlie Club that it could not broadcast radio music over the loudspeakers in its clubs without first obtaining an appropriate license. Moreover, schedules attached to the letter explicitly indicated that Charlie Club was required to secure a dance school license if it intended to play music at its aerobic exercise classes. On the basis of such information, the court concluded that Charlie Club chose to ignore the letter.
In addition to the convincing evidence contained in the letter, other evidence supports the court's conclusion that Charlie Club knew of the need to obtain a license to
The court did not rely solely on ASCAP's notice and Charlie Club's awareness of that notice. The court based its decision in large part on the testimony of Mr. Vavrus himself. As we noted in Kowalczyk, "when the trial judge's findings are based primarily on oral testimony, the appellant's burden is especially great because the trial judge had the opportunity to evaluate the demeanor and credibility of the witnesses." Id. at 380. Here, the court did not credit Mr. Vavrus' testimony. It simply did not believe that an experienced businessman like Mr. Vavrus would not suspect that he might have to pay for a new license to cover the challenged uses after the cancellation of his original restaurant/nightclub license. Instead, the court concluded that, at best, Mr. Vavrus had ignored deliberately the obvious facts before him. Perhaps anticipating a recent decision of this court, the district court drew an appropriate analogy to the ostrich instruction given in criminal cases. See Video Views, 925 F.2d at 1021 ("one who undertakes a course of infringing conduct may neither sneer in the face of the copyright owner nor hide its head in the sand like an ostrich").
Finally, the trial court based its willfulness determination upon the course of dealing between the parties. Charlie Club argues that this constitutes punishment for past legitimate disputes with ASCAP. It suggests that accepting such a basis would require, in effect, all licensees to accept meekly and unquestioningly the dictates of ASCAP. The court's ruling, however, does not support such a sweeping concern. Contrary to Charlie Club's assertions, the court considered the evidence of past disputes as only one small part of the overall picture presented by the entire case. Evidence of past reluctance by an infringer to pay copyright fees certainly is relevant in assessing his present infringements. Here, the court pointed to the past conduct between the parties simply to illustrate Mr. Vavrus' attitude of "resistance to paying unless there was an aggressive attempt to go after him." Tr. at 387. The record as a whole provides ample evidence to support this characterization. In sum, nothing in Charlie Club's arguments convinces us that the district court's finding of willful infringement was clearly erroneous. Indeed, the record fully supports such a finding.
Charlie Club maintains that even if its violations could be construed as willful, ASCAP should now be estopped from recovery. It asserts that ASCAP's silence on the challenged uses, despite its alleged awareness of those uses, led Charlie Club reasonably to conclude that no licenses were required. The plaintiffs counter that they in no way misled Charlie Club.
For estoppel to apply in a copyright action, the copyright owner must be aware of the infringing conduct and yet act in a way that induces the infringer reasonably to rely upon such action to his detriment. See United States v. King Features Entertainment, Inc., 843 F.2d 394, 399 (9th Cir.1988). In this case, the district court found that ASCAP had done nothing to mislead Charlie Club. The record fully supports this conclusion. For a substantial period of time, the challenged uses would have been included under Charlie Club's existing licenses.
Charlie Club next contends that the district court abused its discretion in awarding an excessive amount of damages. Specifically, it challenges the court's reliance upon the allegedly past due license fees in calculating the damages amount and insists that these fees were based upon vague, confusing, and unreliable evidence. To support its contention, Charlie Club proffers ASCAP's constant revision of the amount supposedly owed and argues that those figures included a double charge for the use of music during aerobics. The plaintiffs counter that the court acted well within the bounds of statutory discretion in calculating damages.
A copyright owner may choose to recover one of two different forms of relief against an infringer. First, he may recover actual damages and lost profits that are attributable to the infringement. See 17 U.S.C. § 504(b). However, because these damages are often virtually impossible to prove, a copyright owner may elect instead to recover statutory damages. See id. § 504(c). Under section 504(c), the court, in its discretion, may award from $500 to $20,000 per infringement. Moreover, if the court concludes that willful infringement occurred, it may increase the amount awarded up to a sum of $100,000 per infringement. See id. § 504(c)(1)-(2).
The damages awarded here fall comfortably within the statutory scheme established by Congress. In awarding damages, the district court attempted to construct a figure equal to approximately three times the amount due under past license agreements. We specifically upheld this approach in Kowalczyk. See 855 F.2d at 382-83. The fact that the figure was not exactly three times the license amount is not troubling. The court was not required to follow any rigid formula. Indeed, district courts enjoy wide discretion in awarding fees and may consider various factors such as "the difficulty or impossibility of proving actual damages, the circumstances of the infringement, and the efficacy of the damages as a deterrent to future copyright infringement." See F.E.L. Publications v. Catholic Bishop of Chicago, 754 F.2d 216, 219 (7th Cir.) (citations omitted), cert. denied, 474 U.S. 824, 106 S.Ct. 79, 88 L.Ed.2d 64 (1985); see also Harris v. Emus Records Corp., 734 F.2d 1329, 1335 (9th Cir.1984) (court has wide discretion to award any amount within the statutory guidelines). Moreover, when the
D. Attorney's Fees
Finally, Charlie Club challenges the court's award of attorney's fees. It asserts that such an award would be improper in light of the innocent nature of the infringements and disproportionate in light of its meritorious defense. The plaintiffs respond that the district court could properly award attorney's fees after it found willful infringements.
The Copyright Act provides that the award of attorney's fees is within the sound discretion of the court.
Additionally, Charlie Club maintains that an award of fees would be punitive because the plaintiffs already have been made more than whole by the court's award of damages. We find no merit in this argument. Attorney's fees may be awarded for reasons other than simply making the plaintiff whole, such as encouraging the assertion of colorable copyright claims and deterring infringement. See Roulo, 886 F.2d at 942; McCulloch v. Albert E. Price, Inc., 823 F.2d 316, 323 (9th Cir.1987). Moreover, this case presents a particularly appropriate occasion on which to award attorney's fees. The district court found that Charlie Club treated the copyright laws with disdain. Indeed, it noted that Mr. Vavrus' attitude was "[i]f they went after him, he could deal with it then. But in the meantime, having to pay a bunch of money for doing nothing else than listening to a radio and playing some tapes in some classes was not something that he felt he should go out of his way to check out with either a lawyer or with ASCAP." Tr. at 388. Because of this attitude, the plaintiffs went out of their way and exerted considerable time and effort in pursuing this matter.
Our examination of the record convinces us that the district court thoroughly and thoughtfully reviewed the matter of attorney's fees. The record affirmatively evidences the sound exercise of discretion — not an abuse of discretion. We therefore conclude that the district court's award of attorney's fees was appropriate.
For the foregoing reasons, the judgment of the district court is affirmed.