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Portion of Expert's Lost Development Deals Damages Ruled Too Speculative

By Stan Soocher
May 27, 2010

A magistrate for the U.S. District Court for the Southern District of Texas has excluded a significant portion of an expert's damages testimony in a suit by book author Michael Baisden alleging that the defendants exceeded the scope of a license to produce stageplays of Baisden's novels The Maintenance Man and Men Cry in the Dark. Baisden v. I'm Ready Productions Inc., 4:08-CV-00451. Baisden's suit included claims of copyright infringement and failure to pay royalties from DVD releases of the stage productions.

U.S. Magistrate Judge Nancy K. Johnson first decided that Baisden's damages expert Scott A. Barnes, a certified public accountant, qualified as an expert under Rule 702 of the Federal Rules of Evidence, by noting: “Although Barnes lacks any specific training and has limited experience in the valuation of feature films, he possesses a significant amount of experience generally in the valuation of businesses and other commercial ventures and specifically in damage assessment related to intellectual property infringement.”

Magistrate Johnson then found that the existence of an option contract that a production outfit had entered into with Baisden's company for motion picture rights to two Maintenance Man novels provided a sufficient factual basis for Barnes to opine on monetary damages from lost film developments due to the defendants' infringement. Barnes further determined the impact of the defendants' infringement on Baisden's film development opportunities from two of his other novels, for a total from all five novels of $13,408,659. In addition, Barnes concluded that the defendants' net profits from Maintenance Man and Men Cry in the Dark DVD sales and merchandise from 2005 forward totaled $1.1 million.

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