This section contains the nature of the case and procedural background.

MCA (P) and Public Interest Corp. (D) entered into a contract under which P granted to D the right to televise first run programs. After the contract was performed for more than two years, D insisted that it was not obligated to perform certain portions of the contract. P sued under a contract clause that made D liable for damages for the entire amount of the contract price and for copyright infringement. The district court gave P the verdict for $804,538.65 for breach of contract and $1,060,000 for copyright infringement. D appealed arguing that these damages were a penalty and a double recovery.

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