Copyright misuse

Last updated

Copyright misuse is an equitable defence to copyright infringement in the United States based upon the doctrine of unclean hands. [1] The misuse doctrine provides that the copyright holder engaged in abusive or improper conduct in exploiting or enforcing the copyright will be precluded from enforcing his rights against the infringer. Copyright misuse is often comparable to and draws from the older and more established doctrine of patent misuse, which bars a patentee from obtaining relief for infringement when he extends his patent rights beyond the limited monopoly conferred by the law. [2]

Contents

The doctrine forbids the copyright holder 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 the public policy underlying copyright law. [3] In fact, the misuse doctrine is said to have evolved to tackle such aggressive licensing practices. [4]

Requirements

Although the doctrine of copyright misuse has not yet been delineated, several circuits have upheld the defence on the following policy grounds –

  1. The plaintiff has violated antitrust laws
  2. The plaintiff used the copyright in a manner violative of the public policy of copyright law

Difference from fair use

Fair use defence to copyright infringement allows unauthorised use of copyrighted work in a reasonable manner under certain circumstances. The following are some of the facets that distinguish the misuse doctrine from fair use –

  1. Fair use is statutorily recognised in 17 USC § 107, whereas copyright misuse is yet to receive statutory support; and
  2. The defendant must prove that his unauthorised use of copyrighted work qualifies for a fair use exception, whereas the defendant need not suffer directly from the misuse to successfully claim an exception to copyright infringement.

In the United States

Although the misuse doctrine was a well-known defence in patent infringement cases, it was extended to copyright law in M. Witmark & Sons v Jensen for the first time. [5] Consequently, copyright misuse was adopted by various circuit courts in recent years. However, the contours of the doctrine remain uncertain as it is yet to be explicitly recognised by the United States Supreme Court. Some scholars have even advocated for the codification of the misuse doctrine. [6]

Lasercomb America, Inc. v Reynolds

In Lasercomb America, Inc. v Reynolds, [7] the Fourth Circuit became the first appellate court to uphold a copyright misuse defence as analogous to the patent misuse defence. In this case, Lasercomb had sued Reynolds for making unauthorised copies of its die-making software, which was subject to copyright protection. Reynolds alleged that Lasercomb had misused its copyright by imposing unreasonable non-compete clause that restricted creating a competing product for a period of one hundred years in its standard licensing agreement. [8] The Court ruled that although the inclusion of such a provision did not constitute an antitrust violation, it did violate the public policy underlying copyright and rendered Lasercomb’s copyright unenforceable. The Court also held that the defendant need not be subjected to the purported misuse in order to set up a valid defence as Reynolds had not signed the standard licensing agreement. [9] Lastly, the Court clarified that Lasercomb was free to initiate a suit for infringement once it has purged itself of the misuse and its copyright was not invalidated. [10]

Practice Management Information Corp. v American Medical Association

The Ninth Circuit was the next circuit to adopt the copyright misuse doctrine in Practice Management Information Corp. v American Medical Association. [11] In this case, American Medical Association granted Health Care Financing Administration (now known as the Centers for Medicare & Medicaid Services) a non-exclusive, royalty-free perpetual license to use its coding system for medical procedures. [12] However, the license was restricted, as no other coding system could be used. [13] Practice Management, a publisher and distributor of medical books, filed for declaratory relief to have the copyright invalidated when it failed to procure the volume discount it requested. [14] The Court refused to invalidate the copyright but ruled that the licensing provision requiring exclusive use of the coding system constituted copyright misuse. [15]

Alcatel USA Inc. v DGI Technologies Inc.

The Fifth Circuit upheld the defence of copyright misuse in Alcatel USA, Inc. v DGI Technologies, Inc. [16] Alcatel licensed the use of its software only along with its manufactured equipment. [17] The terms of the license banned downloading or copying Alcatel’s software. However, DGI downloaded and copied Alcatel’s software in violation of the licensing agreement in order to ensure compatibility with its product. [18] In a suit for infringement of copyright, DGI claimed misuse of copyright by Alcatel. [19] The Court found Alcatel to have exceeded the scope of the copyright grant to gain an extended monopoly, which effectively constituted a copyright misuse.

Assessment Technologies of WI, LLC v WIREdata Inc.

The doctrine of copyright misuse was upheld by the Seventh Circuit in Assessment Technologies of WI, LLC v WIREdata Inc, [20] which is another case involving computer software. In this case, WIREdata sought public information about a number of properties from the Wisconsin municipalities. The information was collected by the municipalities and compiled using the plaintiff’s software for tax assessment purposes. Hence, some municipalities refused to furnish the information for fear of infringing Assessment Technologies’ copyright. [21] WIREdata, the defendants in this case, sued in state court for the release of information and Assessment Technologies sued in federal court, claiming that the release would violate its copyright. The Court held that the conduct of the plaintiff amounted to copyright misuse as the information withheld by the municipalities were beyond the purview of the said copyright.

Video Pipeline, Inc. v Buena Vista Home Entertainment, Inc.

In Video Pipeline, Inc. v Buena Vista Home Entertainment, Inc., [22] the Third Circuit stated that a copyright holder might commit misuse in trying to enforce a license that prohibits criticism of copyright-protected works. Video Pipeline had an agreement with Disney, which allowed it to compile more than 500 movie trailers. When Video Pipeline started to post the trailers online, Disney asked Video Pipeline to remove the trailers, as they were not covered by the terms of the license. Although Video Pipeline complied with Disney’s request, it sought a declaratory relief that its use of trailers online did not in any manner violate Disney’s copyright. Additionally, Video Pipeline amended the complaint to seek declaratory relief to use a two-minute video clip review it created out of sixty-two movies. Disney, which owned Buena Vista, filed a counterclaim for copyright infringement in response to the suit. The Court observed that the doctrine is yet to be affirmatively expressed by the United States Supreme Court and that the licensing terms were reasonable. Accordingly, the Court ultimately ruled that the doctrine was inapplicable to the factual matrix of this case.

This case has assumed significance because it was decided in a circuit wherein Redbox sued three major studios, namely Universal, Walter and Fox.

In India

India has incorporated fair dealing provisions into its domestic law, which provides important limitations to copyright holders’ rights. [23] The doctrine of copyright misuse has not received any statutory support much like in the United States.

Tekla Corporation v Survo Ghosh

In Tekla Corporation and Ors. v Survo Ghosh and Ors., [24] the Delhi High Court ruled that the defence of copyright misuse was not available to the defendants either in a suit for permanent injunction from infringing a plaintiff’s copyright or in an action for damages for copyright infringement. In 2011, the plaintiffs had initiated a suit for copyright infringement against the defendants for unauthorized usage of its software. Instead of invoking any of the exemptions under Section 52 of the Indian Copyright Act, 1957, the defendants contested that the plaintiffs were precluded from claiming remedies for infringement as their conduct constituted copyright misuse. It was alleged that the plaintiffs had been charging an exorbitant fee alongside imposing ‘unreasonable' conditions as a part of their licensing agreements. However, the Court was not persuaded by the American jurisprudence on this subject and refused to recognize the doctrine of copyright misuse, as it would amount to adding more grounds than what the statute already provided. [25] The Court was also concerned about the implications of the doctrine on judicial delays in enforcement of copyright if it were to be adopted in India. [26] Nonetheless, the Court is said to have missed an opportunity to engage with copyright policy prevalent in India. [27]

See also

Related Research Articles

<span class="mw-page-title-main">Fair use</span> Concept in copyright law

Fair use is a doctrine in United States law that permits limited use of copyrighted material without having to first acquire permission from the copyright holder. Fair use is one of the limitations to copyright intended to balance the interests of copyright holders with the public interest in the wider distribution and use of creative works by allowing as a defense to copyright infringement claims certain limited uses that might otherwise be considered infringement. The US "fair use doctrine" is generally broader than the "fair dealing" rights known in most countries that inherited English Common Law. The fair use right is a general exception that applies to all different kinds of uses with all types of works. In the U.S., fair use right/exception is based on a flexible proportionality test, that examines the purpose of the use, the amount used, and the impact on the market of the original work.

The first-sale doctrine is an American legal concept that limits the rights of an intellectual property owner to control resale of products embodying its intellectual property. The doctrine enables the distribution chain of copyrighted products, library lending, giving, video rentals and secondary markets for copyrighted works. In trademark law, this same doctrine enables reselling of trademarked products after the trademark holder puts the products on the market. In the case of patented products, the doctrine allows resale of patented products without any control from the patent holder. The first sale doctrine does not apply to patented processes, which are instead governed by the patent exhaustion doctrine.

<i>In re Aimster Copyright Litigation</i>

In re Aimster Copyright Litigation, 334 F.3d 643, was a case in which the United States Court of Appeals for the Seventh Circuit addressed copyright infringement claims brought against Aimster, concluding that a preliminary injunction against the file-sharing service was appropriate because the copyright owners were likely to prevail on their claims of contributory infringement, and that the services could have non-infringing users was insufficient reason to reverse the district court's decision. The appellate court also noted that the defendant could have limited the quantity of the infringements if it had eliminated an encryption system feature, and if it had monitored the use of its systems. This made it so that the defense did not fall within the safe harbor of 17 U.S.C. § 512(i). and could not be used as an excuse to not know about the infringement. In addition, the court decided that the harm done to the plaintiff was irreparable and outweighed any harm to the defendant created by the injunction.

The exhaustion doctrine, also referred to as the first sale doctrine, is a U.S. common law patent doctrine that limits the extent to which patent holders can control an individual article of a patented product after a so-called authorized sale. Under the doctrine, once an authorized sale of a patented article occurs, the patent holder's exclusive rights to control the use and sale of that article are said to be "exhausted," and the purchaser is free to use or resell that article without further restraint from patent law. However, under the repair and reconstruction doctrine, the patent owner retains the right to exclude purchasers of the articles from making the patented invention anew, unless it is specifically authorized by the patentee to do so.

<i>Alcatel-Lucent v. Microsoft Corp.</i> Legal case

Alcatel-Lucent v. Microsoft Corp., also known as Lucent Technologies Inc. v. Gateway Inc., was a long-running patent infringement case between Alcatel-Lucent and Microsoft litigated in the United States District Court for the Southern District of California and appealed multiple times to the United States Court of Appeals for the Federal Circuit. Alcatel-Lucent was awarded $1.53 billion in a final verdict in August 2007 in the U.S. District Court for the Southern District of California in San Diego. The damages award was reversed on appeal in September 2009, and the case was returned for a separate trial on the amount of damages.

<i>Jacobsen v. Katzer</i>

Jacobsen v. Katzer was a lawsuit between Robert Jacobsen (plaintiff) and Matthew Katzer (defendant), filed March 13, 2006 in the United States District Court for the Northern District of California. The case addressed claims on copyright, patent invalidity, cybersquatting, and Digital Millennium Copyright Act issues arising from Jacobsen under an open source license developing control software for model trains.

<i>Mallinckrodt, Inc. v. Medipart, Inc.</i>

Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700, is a decision of the United States Court of Appeals for the Federal Circuit, in which the court appeared to overrule or drastically limit many years of U.S. Supreme Court precedent affirming the patent exhaustion doctrine, for example in Bauer & Cie. v. O'Donnell.

Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617 (2008), is a case decided by the United States Supreme Court in which the Court reaffirmed the validity of the patent exhaustion doctrine. The decision made uncertain the continuing precedential value of a line of decisions in the Federal Circuit that had sought to limit Supreme Court exhaustion doctrine decisions to their facts and to require a so-called "rule of reason" analysis of all post-sale restrictions other than tie-ins and price fixes. In the course of restating the patent exhaustion doctrine, the Court held that it is triggered by, among other things, an authorized sale of a component when the only reasonable and intended use of the component is to engage the patent and the component substantially embodies the patented invention by embodying its essential features. The Court also overturned, in passing, that the exhaustion doctrine was limited to product claims and did not apply to method claims.

<span class="mw-page-title-main">Substantial similarity</span> Standard in US copyright law

Substantial similarity, in US copyright law, is the standard used to determine whether a defendant has infringed the reproduction right of a copyright. The standard arises out of the recognition that the exclusive right to make copies of a work would be meaningless if copyright infringement were limited to making only exact and complete reproductions of a work. Many courts also use "substantial similarity" in place of "probative" or "striking similarity" to describe the level of similarity necessary to prove that copying has occurred. A number of tests have been devised by courts to determine substantial similarity. They may rely on expert or lay observation or both and may subjectively judge the feel of a work or critically analyze its elements.

<i>Vernor v. Autodesk, Inc.</i> United States district court case

Vernor v. Autodesk, Inc. was a case in the United States District Court for the Western District of Washington regarding the applicability of the first-sale doctrine to software sold under the terms of so-called "shrinkwrap licensing." The court held that when the transfer of software to the purchaser materially resembled a sale it was, in fact, a "sale with restrictions on use" giving rise to a right to resell the copy under the first-sale doctrine. As such, Autodesk could not pursue an action for copyright infringement against Vernor, who sought to resell used versions of its software on eBay. The decision was appealed to the United States Court of Appeals for the Ninth Circuit, which issued a decision on September 10, 2010, reversing the first-sale doctrine ruling and remanding for further proceedings on the misuse of copyright claim. The Ninth Circuit's decision asserted that its ruling was compelled by Ninth Circuit precedent, but observed that the policy considerations involved in the case might affect motion pictures and libraries as well as sales of used software.

<i>Lasercomb America, Inc. v. Reynolds</i>

Lasercomb America, Inc. v. Reynolds, 911 F.2d 970 is an appeal filed in the United States Court of Appeals for the Fourth Circuit. Initially, Lasercomb filed an action against Holiday Steel for breach of contract, copyright infringement, misappropriation of trade secrets, fraud, unfair competition, and false designation of origin. The United States District Court ruled in favor of Lasercomb, awarding them punitive damages and actual damages for fraud, rejecting the defense of copyright misuse. On appeal, based on a recognition of the similarity to patent misuse, the holding was reversed, deeming the language contained in the license agreement unreasonable.

Inwood Laboratories Inc. v. Ives Laboratories, Inc., 456 U.S. 844 (1982), is a United States Supreme Court case, in which the Court confirmed the application of and set out a test for contributory trademark liability under § 32 of the Lanham Act.

Omega S. A. v. Costco Wholesale Corp., 541 F.3d 982, was a case decided by the Ninth Circuit Court of Appeals that held that in copyright law, the first-sale doctrine does not act as a defense to claims of infringing distribution and importation for unauthorized sale of authentic, imported watches that bore a design registered in the Copyright Office. It is contrasted with Kirtsaeng v. John Wiley & Sons, Inc.

<span class="mw-page-title-main">Copyright Remedy Clarification Act</span> United States copyright law

The Copyright Remedy Clarification Act (CRCA) is a United States copyright law that attempted to abrogate sovereign immunity of states for copyright infringement. The CRCA amended 17 USC 511(a):

In general. Any State, any instrumentality of a State, and any officer or employee of a State or instrumentality of a State acting in his or her official capacity, shall not be immune, under the Eleventh Amendment of the Constitution of the United States or under any other doctrine of sovereign immunity, from suit in Federal Court by any person, including any governmental or nongovernmental entity, for a violation of any of the exclusive rights of a copyright owner provided by sections 106 through 122, for importing copies of phonorecords in violation of section 602, or for any other violation under this title.

<i>Barclays Capital Inc. v. Theflyonthewall.com, Inc.</i> American legal case

Barclays Capital Inc. v. Theflyonthewall.com, Inc., 650 F.3d 876, was a case decided in the United States Court of Appeals for the Second Circuit where the Second Circuit, reversing the decision of the US District Court below it, found that the claims of three major financial investment firms against an internet subscription stock news service (theflyonthewall.com) for "Hot-news" Misappropriation under state common law doctrine could not stand, as they were pre-empted by several sections of the Federal Copyright Act.

Morton Salt Co. v. G.S. Suppiger Co., 314 U.S. 488 (1942), is a patent misuse decision of the United States Supreme Court. It was the first case in which the Court expressly labeled as "misuse" the Motion Picture Patent/Carbice tie-in defense to a charge of patent infringement and created the present blanket remedy in infringement cases of unenforceability of the misused patent. The decision re-emphasized that misuse can be found without finding an antitrust violation.

Princo Corp. v. ITC, 616 F.3d 1318 was a 2010 decision of the United States Court of Appeals for the Federal Circuit, that sought to narrow the defense of patent misuse to claims for patent infringement. Princo held that a party asserting the defense of patent misuse, absent a case of so-called per se misuse, must prove both "leveraging" of the patent being enforced against it and a substantial anticompetitive effect outside the legitimate scope of that patent right. In so ruling, the court emphasized that the misuse alleged must involve the patent in suit, not another patent.

<i>National Lockwasher Co. v. George K. Garrett Co.</i>

National Lockwasher Co. v. George K. Garrett Co., 137 F.2d 255, is one of the earliest or the earliest federal court decision to hold that it is patent misuse for a patentee to require licensees not to use a competitive technology. Such provisions are known as "tie-outs."

Contributory copyright infringement is a way of imposing secondary liability for infringement of a copyright. It is a means by which a person may be held liable for copyright infringement even though he or she did not directly engage in the infringing activity. In the United States, the Copyright Act does not itself impose liability for contributory infringement expressly. It is one of the two forms of secondary liability apart from vicarious liability. Contributory infringement is understood to be a form of infringement in which a person is not directly violating a copyright but induces or authorizes another person to directly infringe the copyright.

Copyright protection is available to the creators of a range of works including literary, musical, dramatic and artistic works. Recognition of fictional characters as works eligible for copyright protection has come about with the understanding that characters can be separated from the original works they were embodied in and acquire a new life by featuring in subsequent works.

References

  1. ↑ Paredes, Troy (1994). "Copyright Misuse Tying: Will Courts Stop Misusing Misuse". Berkeley Technology Law Journal. 9 (2): 276. Retrieved 12 September 2023.
  2. ↑ Motion Pictures Patents Co v Universal Film Mfg Co., 243 U.S. 502 (1917);
    Morton Salt Co. v G.S. Superego Co., 312 U.S. 488 (1942)
  3. ↑ Lasercomb America, Inc. v Reynolds, 911 F.2d 970 (4th Cir. 1990)
  4. ↑ Judge, Karthryn (2004). "Rethinking Copyright Misuse". Stanford Law Review. 57 (3): 915. JSTOR   40040191.
  5. ↑ 80 F. Supp. 843 (D. Minn. 1948)
  6. ↑ Bell, Tom (2007). "Codifying Copyright's Misuse Defense". Utah Law Review: 573. SSRN   983805.
  7. ↑ supra note 3 at 975 ("the public policy behind the grant of copyright and patent is essentially the same")
  8. ↑ supra note 3 at 973
  9. ↑ supra note 3 at 979
  10. ↑ ibid.
  11. ↑ 121 F.3d 516 (9th Cir. 1997)
  12. ↑ Ibid. at 517
  13. ↑ supra note 11 at 520-521
  14. ↑ supra note 11 at 521
  15. ↑ ibid.
  16. ↑ 166 F.3d 772 (5th Cir. 1999)
  17. ↑ ibid. at 777
  18. ↑ supra note 16 at 778
  19. ↑ supra note 16 796
  20. ↑ 350 F.3d 640 (7th Cir. 2003)
  21. ↑ ibid. at 642
  22. ↑ 342 F.3d 191 (3d. Cir 2003)
  23. ↑ "Section 52 in the Copyright Act, 1957".
  24. ↑ "Tekla Corporation and Ors. v Survo Ghosh and Ors".
  25. ↑ ibid. para 16
  26. ↑ supra note 24 at para 25
  27. ↑ Jayaraj, Spadika (28 April 2019). "Tekla Corporation v. Survo Ghosh: An Attempt at Introducing the "Misuse of Copyright" Doctrine in Indian Jurisprudence". SpicyIP. Archived from the original on Mar 7, 2022.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.