Free Response in Opposition to Motion - District Court of Arizona - Arizona

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MESCHKOW & GRESHAM, P.L.C.

Jordan M. Meschkow (AZ Bar No. 007454) Lowell W. Gresham (AZ Bar No. 009702) 5727 North Seventh Street Suite 409 Phoenix, Arizona 85014-5818 (602) 274-6996 (602) 274-6970 (facsimile) Attorneys for Plaintiff

GILES LEGAL, P.L.C.

Nancy R. Giles (AZ Bar No. 020163) 733 West Willetta Street Phoenix, Arizona 85007 (602) 252-1788 Attorney for Plaintiff

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA DAN COOGAN, doing business as COOGAN PHOTOGRAPHIC, Plaintiff, v. AVNET, INC., et al. Defendants. Because Defendants were unable to find a reliable expert to support their claims and damages calculations in this case, as a last-ditch effort to minimize their damages, they are trying to preclude Plaintiff's expert, with no grounds to do so. Defendants' Motion confuses arguments and misstates testimony: instead of arguing the Daubert standard for disqualification of an expert, based upon the Federal Rules of Evidence, Defendants argue the merits of Plaintiff's claims for damages. Moreover, the Motion is rife with scattered argument snippets (often a paragraph or two), misleading deposition quotes, and miscited case law. The issues raised by Defendants, if they had any merit at all, would be issues for trial,
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Case No.: CV-04-0621 PHX SRB

PLAINTIFF DAN COOGAN'S RESPONSE TO DEFENDANTS' MOTION TO PRECLUDE TESTIMONY OF PLAINTIFF'S EXPERT RICHARD WEISGRAU

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and Defendants have no valid argument that the testimony of Richard Weisgrau should be precluded. Not only is his report reliable, but as the former Executive Director of a national organization for photographers, he is one of the most qualified experts available. This Response is based on the attached Memorandum of Points and Authorities and exhibits thereto, and the entire record in this case. MEMORANDUM OF POINTS AND AUTHORITIES I. BACKGROUND A. Procedural History

This case was filed March 29, 2004, and on October 24, 2005, this Court ruled that Defendants willfully infringed upon Plaintiffs' copyrighted photographs, leaving damages and the liability of the individual defendants as the only remaining major issues in the case. See Opinion and Order of 24 October 2005, Document No. 100, pages 13 and 14. 1. Defendants Have Continually Evaded Plaintiff's Discovery Requests Seeking Identification of All of Defendants' Infringing Uses of Plaintiff's Photographs

On September 27, 2004, Plaintiff served written discovery requests on Defendants that included requests for any documents demonstrating or evidencing any and all of Defendants' uses of Plaintiff's copyrighted photographs, and the following interrogatory: · Interrogatory No. 4: State the date (month, day, and year) and circumstances concerning Defendants' first use and all subsequent uses of Plaintiff's Photographs of Roy Vallee and the manner and extent of such first and all subsequent uses, whether on an Avnet website, a third-party website, or in any report or publication. See Defendants' Responses to Plaintiff's First Set of Interrogatories to Defendant Avnet, Inc. and to Plaintiff's First Request for Production of Documents to Defendants, September 27, 2004, attached as Exhibit B to Document #108, incorporated by reference herein. Since propounding this discovery in September 2004, Plaintiff has made numerous attempts to get Defendants to identify each of its infringing uses of Plaintiff's photographs. Despite numerous letters and
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discussions with Plaintiff, however, Defendants continued, and continue, to refuse to fully answer these discovery requests. When Plaintiff disclosed his expert reports on June 24, 2005, Defendants still had not identified all of their uses of Plaintiff's photographs. In both the Expert Report of Richard Weisgrau, and the Expert Report of Jeff Sedlik, the expert preparing the Report was adamant that a calculation of actual damages was dependent upon knowing each infringing use and that, because Defendants' productions were deficient, the expert reports may require supplementation in the future if and when Defendants were to identify additional infringing uses. See Expert Report of Richard Weisgrau, attached as Exhibit B to Defendants' instant Motion ("Weisgrau Report"), and incorporated by reference herein, at 7-15, and Expert Report of Jeff Sedlik, attached as Exhibit A to Defendants' instant Motion ("Sedlik Report"), and incorporated by reference, at 15-16. After expert reports were disclosed on June 24, 2005, Defendants began planning to take Plaintiff's experts' depositions 1 . Defendants soon let this plan go by the wayside, however, presumably when they realized that, due to their own deficient productions, Plaintiff's experts would have to supplement their reports. Plaintiff made numerous attempts to get Defendants to produce the documents they were hiding. See Plaintiff's Motion to Compel, Document #91, September 27, 2005, incorporated herein by reference. Finally, on October 17, 2005, Defendants made a supplemental production at the instruction of this Court, but the production still did not identify all of Defendants' infringing uses. Recently, on March 14, 2006, a year and a half after Plaintiff issued his first document requests and interrogatories to Defendants, and over eight months after the experts had finished their first reports, Plaintiff received Avnet's Second Supplemental Response to Plaintiff's First Set of Interrogatories, attached as
When dates for such depositions were discussed between counsel via telephone in September 2005, Plaintiff sent Defendants a letter addressing such. See Meschkow & Gresham, P.L.C. September 9, 2005 letter, attached as Exhibit A.
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Exhibit D to Plaintiff's Motion in Limine, incorporated by reference herein, in which Defendants purport to finally identify each of their multiple infringing uses of Plaintiff's photographs. Due to Defendants' deceitfulness throughout this case, as well as the inconsistencies in Defendants' responses, however, Plaintiff remains wary of the completeness of Defendants' answers. Defendants have made it a habit of being evasive and untruthful when it comes to discovery in this case. For example, as part of Plaintiff's September 2004 discovery requests, Plaintiff requested all of Avnet's Annual Reports containing the infringing photographs. See, e.g., Exhibit B to Document #108. After much prodding, Avnet produced certain documents responsive to the request, in bits and pieces. In late September 2005, after almost a year of waiting to obtain full responses to his discovery requests, Plaintiff, in yet another goodfaith attempt to obtain the requested documents, determined that he could order copies of Defendant Avnet's Annual Reports from their website for investors and other interested persons. Plaintiff ordered copies of Avnet's 2002 and 2003

Annual Reports, which he received in the mail on or about October 3, 2005. See Affidavit of Plaintiff Dan Coogan, attached as Exhibit F to Document #108, incorporated herein by reference. Plaintiff was shocked to discover that the hard copy of Avnet's Annual Report that was being mailed to investors and potential investors was not the same as the downloadable PDF version that Defendants were currently making available for purposes of this lawsuit; rather, the version being mailed to the public was the older, infringing version of the Annual Report, with Plaintiff's copyrighted photographs included. Id. On October 14, 2005, Plaintiff immediately disclosed to Defendants Avnet Annual Reports he and some of his witnesses had ordered through the mail, thus disclosing Defendants' own infringing Annual Reports to Defendants. See Plaintiff's Third Rule 26(A)(1) Disclosure Statement, attached hereto as Exhibit B and its attachments of infringing Annual Reports mailed through October 2005, attached to Document
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#108 as Exhibits G1 to G6, and incorporated by reference, herein. Three days later, Defendants' October 17, 2005 letter enclosed the first production of infringing hard-copy versions of Avnet's 2002 and 2003 Annual Reports that Defendants ever made to Plaintiff. See Defendants' letter detailing the production, attached hereto as Exhibit C. Defendants' production, however, contained no other printed versions of the Annual Reports and did not disclose that Defendants were continuing to distribute the infringing Reports or that the previously identified downloadable Annual Reports were different than the hard copies being mailed to the public. Id. Rather, Defendants continued to allow Plaintiff to believe that the infringing Reports were no longer being used by Defendants and did not inform Plaintiff that the infringing Annual Reports were being distributed as late as last month. Presumably Defendants were hopeful that Plaintiff would never discover their scheme 2 . Second, on March 30, 2006, Plaintiff filed a Motion based in part on Defendants' contradictory discovery responses and seeking to preclude certain responses contradicting Defendants' prior admissions. See Motion in Limine, Document No. 180, March 30, 2006. Approximately two weeks later, Defendants, unbelievably, filed a Motion, still pending before this Court, to change their prior admissions! See Motion, Document No. 191, April 17, 2006. Both the prior admissions and the later, contradictory responses, were verified under penalty of perjury by Defendant Allen Maag. See Plaintiff's Motion in Limine, Document No. 180, March 30, 2006, and Defendants' Motion to Withdraw Admissions, Document 191, April 17, 2006. Thus, again, Defendants' misstatements were
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This was months after Defendant Allen Maag swore "Upon learning that Avnet had violated Plaintiff's copyright in the photographs, I immediately ordered that all use and distribution of the photographs be stopped immediately" which was spun as a Fact into "When Avnet learned that it had infringed on Plaintiff's copyright in the photographs, it immediately discontinued its use and distribution of the photographs. See Exh. 1." See Document #66 and its Exhibit 1, incorporated by reference, herein.
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revealed and Defendants responded by attempting to quickly mitigate the damage they have done to their own defense. In short, throughout this case, Defendants have disclosed only what they want to disclose, including information that has turned out to be false. Defendants' tactics have worked to an extent, because Plaintiff typically has no way to know that Defendants are withholding key information until the damage has already been done. 2. Discovery Requests Seeking Defendants' Deductions From Profits

Defendants have never disclosed overhead, expenses, manufacturing costs or any other deductions from their gross revenue. See Avnet's Responses to Plaintiff's Fourth Request for Production of Documents, attached hereto as Exhibit D. Indeed, since early in this case, Defendants knew this was their burden. See Letter from Fennemore Craig, November 29, 2004, attached hereto as Exhibit E (stating that Defendants understand they must produce such information and are prepared to do so). Nonetheless, when Plaintiff issued a formal request seeking this information, Defendants repeatedly objected and evaded the production of any information, stating that the information was not relevant. See Exhibit D. B. Weisgrau's Report

The "Background" section of Defendants' Motion attempts to restate Weisgrau's Report for purposes of supporting their Motion. Weisgrau's Report, however, is well-written and explains its methodology step-by-step. Therefore, rather than refute each misstatement by Defendants, Plaintiff refers the Court to the source, Weisgrau's Report. Moreover, Defendants' admit that their arguments attempting to preclude Weisgrau completely ignore his January 25, 2006 supplemental report (Motion at 2, n.3), which contains more detailed calculations of actual damages in light of documents then-recently produced by Defendants.

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See Supplemental Weisgrau Report, (Exhibit C to Defendants' instant Motion, sans its original Exhibits). II. LAW A. Damages Determination

In copyright infringement cases, at any time before final judgment is rendered, the plaintiff may elect either statutory damages or calculated damages. 17 U.S.C. 501(c)(1). In this case, Plaintiff has not yet made his damages election, as the amount of calculated damages, which is the subject of Weisgrau's Report and testimony, has not yet been determined. Thus, Weisgrau's expertise, and this Response, focuses on the calculated damages. In calculating such damages,

"Congress explicitly provides for two distinct monetary remedies--actual damages and recovery of wrongful profits. These remedies are two sides of the damages coin--the copyright holder's losses and the infringer's gains." Polar Bear Prods. v. Timex Corp., 384 F.3d 700, 707-08 (9th Cir. 2004). 1. Actual Damages

"Actual damages are usually determined by the loss in the fair market value of the copyright, measured by the profits lost due to the infringement or by the value of the use of the copyrighted work to the infringer." Polar Bear, 384 F.3d at 707-08 (quoting McRoberts Software, Inc. v. Media 100, Inc., 329 F.3d 557, 566 (7th Cir. 2003)); see also Mackie v. Rieser, 296 F.3d 909, 914 (9th Cir.2002). 2. Infringers' Profits

. . . a prevailing plaintiff in an infringement action is entitled to recover the infringer's profits to the extent they are attributable to the infringement. 17 U.S.C. § 101(b); Krofft, 562 F.2d at 1172. In establishing the infringer's profits, the plaintiff is required to prove only the defendant's sales; the burden then shifts to the defendant to prove the elements of costs to be deducted from sales in arriving at profit. 17 U.S.C. § 101(b). Any doubt as to the computation of costs or profits is to be resolved in favor of the plaintiff. Shapiro, Bernstein & Co. v. Remington Records, Inc., 265 F.2d 263 (2d Cir. 1959). If the infringing defendant does not meet its burden of proving costs, the gross figure stands as the defendant's profits. Russell v. Price, 612 F.2d 1123, 1130-31 (9th Cir. 1979), cert. denied, 446 U.S. 952, 100 S. Ct. 2919, 64 L. Ed. 2d 809 (1980).
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Frank Music Corp. v. Metro-Goldwyn-Mayer, Inc., 772 F.2d 505, 514 (9th Cir. 1985). As previously discussed, Defendants refused to produce documents

showing any of their costs to be deducted from their sales; thus, for purposes of this case, all of Defendants' sales represent their profits. Id. B. Expert Testimony

As set forth in Defendants' Motion, expert testimony is admissible if (1) it assists the fact finder in understanding the evidence or a fact in issue; (2) the expert is qualified by knowledge, skill, experience, training, or education; (3) it is based upon sufficient facts or data; (4) it is the product of reliable principles and methods; and (5) it is the result of reliable application of the principles and methods to the facts of the case. Motion at 4-5 (citing Rule 702, FED. R. EVID.). Plaintiff's expert Richard

Weisgrau ("Weisgrau") easily meets these requirements, which are the only requirements applicable to the issue of Weisgrau's admissibility. III. PLAINTIFF'S EXPERT RICHARD WEISGRAU EASILY MEETS THE REQUIREMENTS OF RULE 702, WHICH IS THE ONLY APPLICABLE STANDARD. A. Richard Weisgrau's Opinion Will Assist the Trier of Fact in Understanding the Evidence and Determining the Factual Issue of Damages.

With the exception of one conclusory sentence, Defendants do not dispute that Weisgrau's opinion will assist the trier of fact in understanding the evidence in this case. The only remaining issues in this case are individual liability and damages for Defendants' multiple willful infringement of Plaintiff's photographs. Weisgrau's opinion provides the trier of fact with expertise on the photography business, professional photography pricing, photography copyrights, and damages for infringing photograph copyrights. See generally, Weisgrau Report. Such

expertise is necessary for the trier of fact to make a fair, informed, educated determination as to damages. See, e.g., Van Haren v. Breshears, 2005 ML 4150, 7 (Mont. Dist. 2004) (recognizing that "Both Plaintiff and Defendant agree that
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Plaintiff will not testify as to projected lost income or damages. This is because only an expert can testify to projected lost income or damages."). B. Richard Weisgrau Has the Knowledge, Skill, Experience, Training, and Education to Opine as to Damages in This Case.

Defendants' challenging of Weisgrau's qualifications is difficult to take seriously. Weisgrau's 5-page Curriculum Vitae, attached to his Report, speaks for itself. See Exhibit B attached to Defendants' instant Motion. To highlight some of his qualifications, however, he has been a photographer in the photography business for forty years. Id. In addition to a college degree, Weisgrau earned two post-graduate certifications in photography, an honorary masters degree from the Brooks Institute of Photography, and a Certificate of Honor for Photojournalistic Achievement from the Germain School of Photography. Id. Weisgrau has

addressed no less than seven congressional hearings regarding copyright laws relating to photography, and has given more than 80 seminars, lectures, and workshops on photography, photograph copyrights, and photography pricing. Id. He has served on numerous relevant Boards of Directors, and, perhaps most importantly, served as the Executive Director for the American Society of Media Photography ("ASMP") for fifteen years. Id; see also Deposition of Richard Weisgrau (hereafter Weisgrau Deposition), at 10:24-12:3, attached as Exhibit E to Defendants' instant Motion, and incorporated by reference herein. He has also written well over 100 books, book chapters, monographs, and bulletins for the ASMP. Id. A more qualified expert on photography, photography copyrights, photography pricing, and damages for the infringement of a photography copyright would be difficult, if not impossible, to find. Defendants persist in their argument, however, that Weisgrau is unqualified as an expert in this case solely based on one quote from his deposition that it was beyond his expertise to render an opinion on the dollar amount of "Avnet's profits attributable to the infringement of [Plaintiff's] photos[.]" See Weisgrau Deposition
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at 115:16-115:22. What Defendants do not tell the Court is that Weisgrau repeatedly explained to Defendants in his Reports and his deposition what his Report covered and what it did not cover. See, e.g., Weisgrau Deposition at 21:2122:4 ("I consider myself expert enough to render an opinion as to whether there were profits and to render an opinion as to whether or not an infringed photograph contributed to those profits. I do not consider myself expert enough [at this point] to determine the amount of profits that are attributable to a photograph."); see also Weisgrau Report at 6 ("While determining the infringer's profits is beyond the expertise of this expert, determining actual damages is not."). It is axiomatic that Defendants cannot preclude Weisgrau's testimony for his failure to opine on a matter on which he specifically stated he was not qualified to testify. C. Richard Weisgrau's Opinion is Based Upon Sufficient Data, Lacking Only Data That Defendants Refused to Provide.

Defendants' entire argument regarding whether Weisgrau's data was sufficient is based upon the deceptive citation of two nonbinding cases. Defendants cite, and base their entire argument upon, the Davis and Baker cases for the proposition that "[w]hen a Plaintiff has previously licensed the same or similar work, the amount of those license fees should be considered in determining the market value." Motion at 13. This statement is highly misleading. In truth, while both cases applied the plaintiff's previous license fees to determine actual damages, both courts took great pains to point out that each case is extremely factspecific and, therefore, actual damages can be calculated in a variety of ways. Thus, Defendants' citation of these cases is incorrect: consideration of a plaintiff's previous licensing fees, while not irrelevant, is not required in determining the fair market value of the infringed work. Indeed, in the Davis case, On Davis v. The Gap, Inc., 246 F.3d 161 (2nd Cir. 2000), the court discussed actual damages at length: The decisions of this and other courts support the view that the owner's actual damages may include in appropriate cases the reasonable license fee on which a willing buyer and a willing seller
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would have agreed for the use taken by the infringer. Although the Supreme Court has never directly addressed this question, it has suggested in the somewhat different context of a fair use analysis that a critical question is "whether the user stands to profit from exploitation of the copyrighted material without paying the customary price." Davis, 246 F.3d at 167 (quoting Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 562 (1985)). The Davis court goes on to give numerous examples of different cases in which different methods have been employed to determine actual damages. Id. at 167-72. Weisgrau's Report is clear that he does not utilize Plaintiff's past licensing fees in determining actual damages because, in this particular case, such fees "were not fees charged for illegitimate uses agreed after the fact of infringement. . . . I know of no case where a photographer would extend his customary fees to an infringer." Weisgrau Report at 6. Additionally, Weisgrau never could consider Avnet, Inc. a reasonable buyer. See Weisgrau Deposition at 135:17-136:8. As verified by Davis, Weisgrau's approach makes perfect sense: . . . Assume that the copyright owner proves that the defendant has infringed his work. He proves also that a license to make such use of the work has a fair market value, but does not show that the infringement caused him lost sales, lost opportunities to license, or diminution in the value of the copyright. The only proven loss lies in the owner's failure to receive payment by the infringer of the fair market value of the use illegally appropriated. Should the owner's claim for "actual damages" under § 504(b) be dismissed? Or should the court award damages corresponding to the fair market value of the use appropriated by the infringer? Neither answer is entirely satisfactory. If the court dismisses the claim by reason of the owner's failure to prove that the act of infringement cause economic harm, the infringer will get his illegal taking for free, and the owner will be left uncompensated for the illegal taking of something of value. On the other hand, an award of damages might be seen as a windfall for an owner who received no less than he would have if the infringer had refrained from the illegal taking. In our view, the more reasonable approach is to allow such an award in appropriate circumstances. Section 504(a) and (b) employ the broad term "actual damages." Courts and commentators agree it should be broadly construed to favor victims of infringement. See William F. Patry, Copyright Law and Practice 1167 (1994) ("Within reason, any ambiguities should be resolved in favor of the copyright owner."); 4 Nimmer § 14.02 A, at 14-12 ("Uncertainty will not preclude a recovery of actual damages if the uncertainty is as to amount, but not as to the fact that
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actual damages are attributable to the infringement."); Fitzgerald Publ'g Co., 807 F.2d at 1118 ("Actual damages are not... narrowly focused."); Sygma Photo News, Inc. v. High Society Magazine, 778 F.2d 89, 95 (2d Cir. 1985) (stating that when courts are confronted with imprecision in calculating damages, they "should err on the side of guaranteeing the plaintiff a full recovery"). Cf. In Design v. KMart Apparel Corp., 13 F.3d 559, 564 (2d Cir. 1994) (noting that any doubts in calculating profits which result from the infringer's failure to present adequate proof of its costs are to be resolved in favor of the copyright holder), abrogated on other grounds by Fogerty v. Fantasy, Inc., 510 U.S. 517 . . .. Davis, 246 F.3d at 164-65. In short, Defendants' isolation of one discrete and unnecessary factor that Weisgrau chose not to include demonstrates nothing. D. Richard Weisgrau Utilized Reliable Principles and Methods, and Reliably Applied Those Principles and Methods to the Facts of This Case. 1. First Prong of Actual Damages--Loss of Fair Market Value

"Actual damages are usually determined by the loss in the fair market value of the copyright, measured by the profits lost due to the infringement or by the value of the use of the copyrighted work to the infringer." Polar Bear, 384 F.3d at 707-08 (quoting McRoberts Software, Inc. v. Media 100, Inc., 329 F.3d 557, 566 (7th Cir. 2003)); see also Mackie v. Rieser, 296 F.3d 909, 914 (9th Cir.2002). Weisgrau expressly states that his methodology for determining Plaintiff's actual damages is to rely upon industry standards, or, put another way, "reasonable license fees as established in the marketplace[,]" to determine the loss in fair market value to Plaintiff's copyrighted photographs as caused by Defendants' willful infringement. Weisgrau Report at 7. In another inexplicable argument, Defendants cite Weisgrau's own Report to point out that, while his analysis is based upon generic images, Plaintiff's images in this case were not generic and are, therefore, worth even more than the opinion rendered by Weisgrau. See Weisgrau Report at 8. In other words,

Weisgrau's opinion, in the interest of neutrality and reliability, errs on the side of caution in valuing the photographs, by arriving at a valuation that is based on generic photographs and is, therefore, less than the true value of Plaintiff's
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photographs. To accurately remedy as much of the gap as possible, Weisgrau uses a multiplier of three to arrive at his final calculation. See Weisgrau Report at 8-9. Defendants incorrectly argue that this multiplier of three is "arbitrary." In truth, however, Weisgrau explains in detail how and why he determined the multiplier: Q: . . . Where did the multiplier of three come from? A: Because my experience of 40 years in the business is that photographers employ multipliers of between two and five when they have proprietary photographs, and most of the photographers I know and I, myself, when I did that type of work employed a multiple of three Weisgrau Deposition at 79:17-80:1. Indeed, Coogan himself typically utilizes a multiplier of three for proprietary photographs, substantiating Weisgrau's knowledge that most photographers utilize a multiplier of 3. See Coogan Invoice #2002-1212, page 2, Paragraph B, attached as Exhibit 2 to the Complaint and Amended Complaint, and incorporated by reference herein. This type of opinion is exactly the way in which Weisgrau's expertise assists the trier of fact in understanding the industry practices. Defendants next argue that Weisgrau's opinion on "what a reasonable buyer would have agreed to pay for Avnet's use of Plaintiff's photograph[]" is speculative because it addresses only what a willing buyer "might" have agreed to pay, not what a willing buyer "would" have agreed to pay. Motion at 6-7. This argument is illusory. Defendants freely admit that the test is what "reasonable buyer" "would have" been willing to pay, and yet Defendants turn around and criticize Weisgrau's methodology because he cannot say with 100% certainty what a buyer "would have" done. The very nature of the "reasonable person" test is somewhat speculative in that it is not based on an actual situation, but a hypothetical one. The "reasonable person" test is not overly speculative, however, and is preferable to having no method of calculating damages. Of course

Weisgrau cannot opine with 100% certainty as to a hypothetical situation!
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In short, utilization of a "reasonable buyer" standard in no way provides a basis for exclusion of expert testimony. While Defendants are free to rebut

Weisgrau's conclusions at trial, they have no grounds for precluding Weisgrau's testimony. Polar Bear Prods. v. Timex Corp., 384 F.3d 700, 709 (9th Cir. 2004) (quoting McRoberts Software, Inc., 329 F.3d at 566)

("Common sense dictates that an expert may confer with the copyright holder and that the background data may be factored into calculations of actual damages. As the Seventh Circuit noted, `it is not improper for a jury to consider either a hypothetical lost license fee or the value of the infringing use to the infringer to determine actual damages, provided the amount is not based on `undue speculation.'); see also Universal Pictures Co. v. Harold Lloyd Corp., 162 F.2d 354, 369-70 (9th Cir. 1947) (" ... courts have generally permitted the use of expert testimony to ascertain the extent of damages when documentary evidence fails. The second circuit in Sheldon v. Metro-Goldwyn Pictures Corporation, 106 F.2d 45, upheld the use of expert testimony even if it only amounted to estimates, the case being affirmed by the Supreme Court in 309 U.S. 390, at page 408 ... in which that court states: `...what is required is not mathematical exactness but only a reasonable approximation. That after all, is a matter of judgment and the testimony of those who are informed by observation and experience may be not only helpful but, as we have said, may be indispensable.... We see no greater difficulty in the admission and use of expert testimony in such a case than in the countless cases involving values of property rights in which suit testimony often forms the sole basis for decision.'"). Defendants also argue that Weisgrau's opinion should be precluded because his calculations were, obviously, done in 2005. Weisgrau used the Getty website at www.gettyimages.com, a self-proclaimed "world's leading provider of imagery, film and digital services, i.e., a stock photography provider. As shown in a chart attached hereto as Exhibit F, the pricing on Getty fluctuates periodically,
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both up and down. Yet, the 2005 prices utilized by Weisgrau are not significantly different from the prices in 2002. Because Weisgrau specified the year on which he based his calculations, it is simple to use the information in Exhibit F to adjust Weisgrau's calculations for 2002. Again, Defendants are free to argue this, and any other, substantive rebuttal points; but whether Weisgrau's calculations were based on the most appropriate or optimal calendar year is an issue for trial. 3 Finally, Defendants attempt to discredit Weisgrau's calculations by criticizing his use of the Getty web site, including the image size and usage duration he used in his calculations. First, Defendants' Motion suggests that Weisgrau utilized a larger photograph size (such as a half-page) in calculating the value of a smaller photograph (such as a quarter-page) and, therefore, because Weisgrau did not utilize the "quarter-page" option, his calculations are groundlessly inflated. In truth, however, the option Weisgrau utilized for image size was "up to one-half page," which likely was the smallest unit available for calculating value on the Getty web site and calculates values for all photos that are one-half page or less. See, e.g., Weisgrau Deposition at 95:12-98:20. Therefore, Weisgrau used the appropriate category. Defendants conveniently fail to quote the portion of Weisgrau's deposition explaining this methodology.
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Defendants attempt to use Weisgrau's deposition testimony to "prove" that his calculations cannot be applied to the year 2002. Weisgrau's testimony, however is taken out of context. In his deposition, Weisgrau testified that he could not, with any precision, opine as to the "value of these photographs or licenses ... would have been in 2002 ..." at that moment, without the benefit of research materials before him. He was not testifying that he could not ever opine as to the photographs' value in 2002. This citation is yet another misleading red herring from Defendants. As further discussed infra, Defendants' misleading citations to Weisgrau's depositions are made worse because they ignored Weisgrau's corrections to his deposition, attached hereto as Exhibit G. Moreover, Defendants' purposely failed to ask Weisgrau to bring any materials with him to the deposition. See Documents ## 168 and 171. Thus, Weisgrau did not have his reference materials before him and could not answer many questions with precision, thus leading to miscites by Defendants falsely implying that Weisgrau had no idea how to calculate the damages in this case.
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Similarly, Defendants boldly state that Weisgrau admitted Plaintiff's photographs were used editorially, yet utilized the higher pricing guidelines for photographs used in advertising. In truth, however, although Defendants' repeatedly tried to get Weisgrau to make such statements in his deposition, his actual testimony is that most of Defendants' uses of Plaintiffs' photographs were, in fact, advertising uses. See Weisgrau Deposition at 56:6-61:7. Thus, Defendants' argument is yet again comprised of miscites and misstatements signifying nothing. Finally, Defendants quickly mention that Weisgrau's calculations were based upon the "up to one month" duration, rather than a longer duration, such as a months or years. Defendants, however, give no basis for the use of shorter or longer time period, and no legal authority supporting their argument that Weisgrau should be disqualified. As with all of their grievances, Defendants are free to rebut Weisgrau's report as much as they choose to at trial, and if they can show that, for example, a different duration produces a more accurate calculation, then they are free to do so. However, Weisgrau's methodology is reliable: he explains exactly how he computed his figures, and he would continue to reach the same conclusion were he to do the analysis 100 times. This is the essence of reliability. 2. Second Prong of Actual Damages--Infringers' Profits

Defendants use their Motion to Preclude as a vehicle to argue that Plaintiff is not entitled to Defendants' indirect profits from their infringing uses of Plaintiff's photographs. Defendants' argument, however, is misplaced. Whether Plaintiff is allowed to recover indirect profits as part of his damages is an issue for trial. Thus, Plaintiff is allowed to put on his case, including expert testimony, supporting his entitlement to Defendants' indirect profits arising from the infringement. Weisgrau opined as to (1) Defendants' profits and (2) the existence of a causal nexus between Defendants' profits and their infringing uses of Plaintiffs' photographs. See Weisgrau Report; see also Weisgrau Deposition at 21:21-22:4.
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Weisgrau admittedly did not opine as the specific amount of Defendants' profits attributable to the infringement. Id. Defendants argue that Weisgrau's choice not to opine as to this particular matter somehow disqualifies him as an expert on the other matters, on which he does opine. Defendants' argument makes no sense and, again, they offer no legal support for this line of reasoning. Even if Defendants' argument made sense, the reason Weisgrau was unable to give the requested dollar amount because Defendants still had not fully responded to discovery requests from over a year ago requesting all of their infringing uses of Plaintiff's photographs. Indeed, in keeping with their attempts to misstate reality, Defendants cite to Weisgrau's deposition wherein he answered that he "ha[d] no idea" as to how much of Avnet's income was directly attributable to the infringement of Plaintiff's photographs. Motion at 2. Defendants completely omitted Weisgrau's clarification to his testimony. Rather than Weisgrau having simply answered, "I have no idea[,]" as Defendants suggest, Weisgrau's full answer is as follows: I have no idea or opinion about what income is directly attributable to the infringement because I have not been provided with the information that would be required to make such a determination. Still all of Avnet's profits for the years it used Coogan's photographs on its Website home page, CEO Vallee's page, and in its Annual Reports are subject to being attributable to the infringements." See Exhibit G. As Weisgrau and Plaintiff have explained repeatedly, it is

axiomatic that, without knowing each of the infringing uses, Weisgrau could not fully calculate what profits were attributable to each of those uses. Id; see also Weisgrau Report at 14. Defendants cannot withhold documents and then benefit by claiming Plaintiff failed to rely upon those documents. As with the rest of Defendants' arguments, Defendants again focus on their perceived quality of Weisgrau's opinion, raising issues that they are free to rebut at trial, but that are not appropriate for preclusion of an expert's testimony. And,

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again, as with the rest of Defendants' Motion, Defendants have failed to offer any legal authority to support their position. IV. DEFENDANTS' HEARSAY ARGUMENT IS APPALLING. In addition to the issues raised, supra, Defendants' hearsay argument is sufficiently unsound as to warrant specific debunking. Defendants freely admit that an expert "is permitted to rely on materials, including hearsay, in forming the basis of his opinion . . ." Motion at 8 (citing Fed. R. Evid. 703). Defendants go on to devote and entire section of their Motion to contradicting Rule 703 by arguing that Weisgrau's testimony should be precluded because he relied upon hearsay in completing his Report! Defendants are free to object to any hearsay evidence being improperly introduced at trial in this case; however, by Defendants' own admissions, reliance upon hearsay does not constitute grounds for exclusion of expert testimony and, indeed, is specifically permitted under the Federal Rules of Evidence. See Rule 703, Fed. R. Evid. Thus, the inaccuracy and circularity of Defendants' argument regarding the Getty website is nothing short of appalling. V. CONCLUSION For the foregoing reasons, Plaintiff respectfully requests that Defendants' Motion be denied in full.

Respectfully submitted this 24th day of April, 2006,

s/Jordan M. Meschkow Jordan M. Meschkow MESCHKOW & GRESHAM, P.L.C. 5727 North Seventh Street Suite 409 Phoenix, Arizona 85014 Telephone: (602) 274-6996 Facsimile (602) 274-6970 ATTORNEYS FOR PLAINTIFF
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Nancy R. Giles GILES LEGAL, P.L.C. 733 West Willetta Street Phoenix, Arizona 85007 Telephone: (602) 252-1788 ATTORNEY FOR PLAINTIFF

Filed 04/24/2006

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Case 2:04-cv-00621-SRB 8050-0131-190-1

CERTIFICATE OF SERVICE I hereby certify that on 24 April 2006 I electronically transmitted the attached document and its Exhibits to the Clerk's Office using the ECF System for filing and transmittal of a Notice of Electronic Filing to the following ECF registrants: Jordan Greene FENNEMORE CRAIG 3003 North Central Avenue, Suite 2600 Phoenix, Arizona 85012-2913 Attorneys for Defendants

s/ Jordan M. Meschkow

Document 192 19 Filed 04/24/2006

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