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Misusing The Defense Of Copyright Misuse

Posted on Tuesday, Mar 6, 2012


Over on Groklaw, a recent post suggested that the copyright claims in Oracle v. Google might give rise to a defense of copyright misuse.  The copyright issues in that case have been fascinating from the start:  Google has argued, for instance, that software APIs are per se uncopyrightable.  Judge Alsup rejected this argument, but I expect that we’ll hear more about it before the case is over.

Groklaw suggested that Oracle engages in copyright misuse because of the way it licenses its Java specifications.  As best as I can tell from the public filings, Google hasn’t actually pursued this argument, but it intrigued me because I’ve run into this issue in nearly a dozen cases over the years; sometimes I’ve argued for a finding of copyright misuse, and other times I’ve defended against the claim.

Copyright misuse is not mentioned at all in the Copyright Act.  It’s a common law, judge-created doctrine that serves as a defense to copyright infringement.  It’s an “equitable defense,” a principle that courts invoke when they think that it’s fundamentally unfair to grant a party relief, even if strictly speaking they are entitled to it, because they’ve behaved in a way that’s oppressive or otherwise objectionable.

Framed in the most general terms, copyright misuse is “the use of the [copyright] to secure an exclusive right or limited monopoly not granted by the [Copyright] Office and which it is contrary to public policy to grant.”   Lasercomb America, Inc. v. Reynolds, 961 F.2d 211 (4th Cir. 1990).  At this level of abstraction, it may seem like the doctrine is simply some free-floating veto that judges can use to pick a winner.

But it isn’t.  Over the past twenty years there have been dozens of court decisions discussing copyright misuse.  Those decisions define what copyright misuse is, and, as importantly, what it’s not.

The cases that have found copyright misuse share a common feature:  the copyright owner grants a license to its copyrighted work on the condition that the licensee agrees not to develop a competing work.  This was precisely the situation in Lasercomb, the case that first recognized the doctrine of copyright misuse.  Lasercomb licensed complex tool-making software, on the condition that the licensee must not develop competing software for a period of 99 years.  Lasercomb’s copyright in the software gave it certain rights (the right to prohibit copying, modification, or distribution without permission) but the Copyright Act did not give it the right to prohibit the development of competitive works.  Thus, its attempt to prohibit competition was copyright misuse.

Other cases have similarly found copyright misuse when a copyright owner includes anticompetitive restrictions in license agreements.   For instance, the American Medical Association developed a copyrighted system of codes for identifying medical procedures (the “CPT”).  The AMA licensed the CPT to the federal government for use in connection with reimbursement decisions.  The AMA’s license of the CPT expressly prohibited the government from using any competing system and required the government to use the CPT in all programs whenever possible.  The Court of Appeals for the Ninth Circuit held that this was copyright misuse.  Practice Management Information Corp. v. American Medical Association, 121 F.3d 516 (9th Cir. 1997).

Given this case law, you’d think that most copyright owners would know not to include restrictions on the development of competitive works in their licenses.  In fact, they’re surprisingly common.  I’ve handled two cases that involved anticompetitive license terms that were virtually identical to the one condemned in Lasercomb.

But not every restriction in a copyright or software license agreement is copyright misuse.  In fact, just a few months ago, in Apple Inc. v. Psystar Corporation, the Court of Appeals for the Ninth Circuit held that it was not copyright misuse for Apple to license its software on the condition that it could be used only on Apple hardware.  This restriction, the court explained, was permissible because it did not prevent the licensee from developing competing software.

Oracle’s license for the Java API specifications expressly allow licensees to develop their own independent implementation of the specifications, and the license does not attempt at all to prevent licensees from developing competing specifications.  Groklaw apparently claims that Oracle has engaged in misuse because its license for the Java API specifications states that licensees will lose their license (and thus infringe Oracle’s copyright) if they breach the terms of the license.

This provision isn’t copyright misuse.  It’s standard in virtually every license:  a licensee gets the benefit of the license only if it is in compliance with and does not breach the license.  Google’s licenses for its various APIs, for instance, also condition the license on compliance with the terms.  Even the GPLv2 contains a provision (Section 4) that terminates the license automatically in the event of breach.

The Oracle v. Google case presents plenty of fascinating IP issues, but I don’t think copyright misuse is one of them. Blogs