extension the modifications thereto.^1415 The court rejected the plaintiffs’ position, noting that
were it to adopt the plaintiffs’ view of what profits are “attributable” to a DMCA violation, it
would ignore the plain language of Section 1203(c)(2) and “impermissibly blur the distinction
between damages recoverable under the DMCA (in this case, those related to circumvention) and
damages recoverable under the copyright statute (those related to use of the underlying protected
works).”^1416
Instead, the magistrate judge concluded that a DMCA plaintiff seeking to recover indirect
profits under Section 1203(c)(2) must establish that the profits have a legally significant causal
relationship to the DMCA violation – in this case, that the profits were attributable to the
“cracking” of the Passport security system.^1417 “This limitation is especially warranted here, in
light of the fact that the statute contains no provision shifting the burden of proof onto the
defendant; under section 1203(c)(2), the burden remains squarely on the plaintiff to establish the
profits attributable to a DMCA violation.”^1418 The court found that the plaintiffs had failed to
show sufficient nexus between the circumvention and the defendants’ profits. The court noted
that it was undisputed that Tri-State was able to utilize the software and run its business without
the crack, and had done so for many years, albeit with some hours of disruption following the
occasional server crash. The crack was simply the means by which Tri-State was able to avoid
having to rely on its consultant to operate the software following a server crash. Accordingly, in
the absence of proof of a link between the circumvention and revenue resulting from sales of Tri-
State’s medical and surgical equipment, the plaintiffs had not shown that all of Tri-State’s profits
were attributable to the crack.^1419
The plaintiffs then offered three alternative theories for apportioning the defendants’
profits. First, the plaintiffs claimed they were entitled to all profits derived from Tri-State
invoices processed with Genesys. Second, they proposed that the court make percentage
apportionments of profits based on the court’s own evaluation of the qualitative contributions to
revenues and profitability of Genesys and UniBasic in relation to the overall business. Third, the
plaintiffs proposed subtracting from Tri-State’s profits an estimate of what Tri-State’s net
income would have been had it processed orders by hand for a six month period and then
switched to a different automated system. The court rejected these proposals on two grounds.
First, each of the alternative theories was tied to profits that were calculated based on the use of
the software, an approach the court found to be more appropriate to a copyright infringement
claim. Second, the theories overlooked the fact that even absent the crack, Tri-State would have
had the use of and access to the software. Accordingly, the court recommended granting Tri-
State’s motion for partial summary judgment as to any profits attributable to the crack, noting
that the recommendation did not foreclose the plaintiffs from pursuing statutory damages, or as
(^1415) Id. at 14-16.
(^1416) Id. at 17.
(^1417) Id. at 26.
(^1418) Id.
(^1419) Id. at 26-29.