United States Court of Appeals for the Fifth Circuit

“ A copyright owner may also seek “any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages.” 17 U.S.C. § 504 (b) . If the copyright owner chooses to claim infringer’s profits, “the copyright owner is required to present proof only of the infringer’s gross revenue, and the infringer is required to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work.” ”

“ There is little precedent under Texas law to guide us in determining whether MGE has sustained the burden of proof required of a plaintiff seeking to recover a defendant’s net profits. In the only reported Texas case involving the recovery of defendant’s profits for a misappropriation of trade secrets claim, the Dallas Court of Appeals held that although defendant’s profits are a “proper element [ ] of damages in a case involving the wrongful use of a trade secret,” a plaintiff cannot recover damages without offering evidence “to show the actual profit made by [defendant] .” ”

“ Here, MGE has not shown that bypassing its dongle infringes a right protected by the Copyright Act. MGE’s dongle merely prevents initial access to the software. If no dongle is detected, the software program will not complete the start-up process. However, even if a dongle is present, it does not prevent the literal code or text of MGE’s copyrighted computer software from being freely read and copied once that access is obtained; there is no encryption or other form of protection on the software itself to prevent copyright violations. ”