Measuring the Unjust Benefit Flashcards
Generally the rule is very broadly stated in restitution:
Under the Restatement of Restitution, party compelled to make restitution must surrender the benefit which he or she has received from the other party.
In other words:
The measure of recovery is the FMV of D’s gain.
Failed attempt to K—> GOODS
Market value of the thing produced
(but if quasi-K (for ex) ==> go by disgorging the ∆ of only the profits associated w/ wrong) What if FMV- thing is old and now worthless but ∆ still benefitted from it)
Failed attempt to K—> SERVICES
Services: FMV of the services
Car restoration case (Anderson v. Schwegel).
Do NOT award reliance damages as restitution in failed K cases!!!!
(Even though Farash v. Sykes case gave reliance damages, this case was an anomaly.)
Measure of Restit—> PROPERTY
Common law rule from Olwell court: Measure depends on level of tortiousness of D’s conduct:
1) If D is consciously tortious, D must forego profit from using P’s property.
2) If D is merely tortious, D must pay greater of P’s loss or D’s direct gain.
3) If parties are equally at fault, D only pays D’s direct gain.
**Note certain statutes might differ.
Restitution + EQUITY====>
Common requirements for restitution in Equity=
√ Unjust enrichment
√ Inadequacy
√ Tracing (to the property or debt against which the constructive trust, equitable lien or subrogation will attach)
Sheldon v. MGM rule
(affirmed in Hamil)
A Two Step rule for deducting and infringer’s overhead expenses from his profits
1) What overhead expense categories were actually used by the production of the infringing product? (ex, rent, personnel, entert., public relations..)
* the infringer has the burden of showing a sufficient nexus between expenses he claims to deduct
2) Arrive at a FAIR, ACCURATE & PRACTICAL method of allocating the implicated overhead to the infringement.
(*** will always be a ? of fact)
*infringer also bears burden of coming up w/fair & accurate formula for allocating this.
**willful & deliberate infringers can be scrutinized closer.
Double dipping for lost profits in Hamil
disgorging ∆ gain/profit, so can’t also recover for lost profit also.
Hamil could not recover both for its hypothetical sales to the shared customers (who bought pattern from GFI instead) (lost profits) and for GFI’s actual sales to those same customers.
