Copyright misuse

Competition law
Basic concepts
Anti-competitive practices
Enforcement authorities and organizations

Copyright misuse is an equitable defense against copyright infringement in the United States allowing copyright infringers to avoid infringement liability if the copyright holder has engaged in abusive or improper conduct in exploiting or enforcing the copyright. Copyright misuse is comparable to, and draws from precedents under, the older doctrine of patent misuse, which dates back to the early years of the 20th century and derives from the more general equity doctrine of "unclean hands", which bars a party from obtaining equitable relief (such as an injunction) against another when the party has acted improperly (though not necessarily illegally).[1]

The doctrine forbids the copyright owner from attempting to extend the effect or operation of copyright beyond the scope of the statutory right (for example, by engaging in restrictive licensing practices that are contrary to public policy, particularly the public policy of copyright law).[2] Courts do not permit a copyright owner that has engaged in misuse to enforce its copyright—whether by securing an injunction against infringers or collecting damages for infringement, until the misuse has been "purged"—that is, the improper practice has been abandoned and its effects have fully dissipated.[3]

Relevant court decisions

Copyright misuse is not a statutory defense set forth in the federal Copyright Act but is instead founded in federal case law derived from the patent misuse doctrine. One of the earliest copyright misuse precedents is a case in the Minnesota Federal District Court, M. Witmark & Sons v. Jensen.[4] The United States Court of Appeals for the Fourth Circuit subsequently endorsed the copyright misuse doctrine in Lasercomb America, Inc. v. Reynolds,[5] Other appellate decisions in the area include Video Pipeline, Inc. v. Buena Vista Home Entertainment[6] and Assessment Technologies v. WIREdata.[7]

Improper behavior that may lead to a finding of copyright misuse includes (but is not limited to) anti-competitive activity. One notable exception is the Federal Circuit's (patent misuse) decision in Princo Corporation vs. International Trade Commission. In that case, Princo had licensed patents from Philips to use data encoding technology, but eventually stopped paying for use of the patent. When Philips sued, Princo argued that it should not be liable for the infringement because Philips had made an agreement with Sony not to license a new patent that would allow for a different way of encoding data, which Princo claimed violated the antitrust laws. The court disagreed, finding Princo liable for infringement because the antitrust violation was seen as irrelevant to the original patent.[8]

Restraints that hinder the promotion of the progress of human knowledge may be held copyright misuse, as in the Lasercomb case, which involved a restriction against development of improved computer code that might compete against the licensed code.[9] Similar principles might condemn a restriction against exercise of reverse engineering, fair use, or conduct protected under the First Amendment.

See also

References

  1. ↑ See Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502 (1917).
  2. ↑ See, e.g., Lasercomb America, Inc. v. Reynolds, 911 F.2d 970, 978 (4th Cir. 1990) (“The question is . . . whether the copyright is being used in a manner violative of the public policy embodied in the grant of a copyright.”).
  3. ↑ See generally B.B. Chem. Co. v. Ellis, 315 U.S. 495 (1942).
  4. ↑ 80 F. Supp. 843 (D. Minn. 1948).
  5. ↑ Lasercomb, 911 F.2d 970 (4th Cir. 1990). Lasercomb is generally considered the leading case.
  6. ↑ 342 F.3d 191 (3d Cir. 2003).
  7. ↑ 350 F.3d 640 (7th Cir. 2003)..
  8. ↑ Jason Hicks, Scope of Patent Misuse Doctrine Sparks Debate In Federal Circuit.
  9. ↑ Lasercomb, 911 F.2d 970 (4th Cir. 1990).
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