Copyright Misuse: a Defense Whose Time Has Come?

• Publication year: 1998
• Pages: 143

27 Colo.Law. 143 Colorado Lawyer 1998.

1998, June, Pg. 143. Copyright Misuse: A Defense Whose Time Has Come?

---

143

Vol. 27, No. 6, Pg. 143

The Colorado Lawyer
June 1998
Vol. 27, No. 6 [Page 143]

Specialty Law Columns
Technology Law and Policy Review
Copyright Misuse: A Defense Whose Time Has Come?
by Carole Jeffery

Although most of the circuit courts have adopted the copyright misuse defense in some form, few have found misuse based on the facts before them. Nevertheless, the law seems clear that, given the right scenario, the defense should prevail. The key question, then, is what is the right scenario

Background

Copyright "misuse" is a direct descendant of the patent misuse doctrine first recognized by the U.S. Supreme Court in Morton Salt Co. v. G.S. Suppiger.1 It is a complete defense to a charge of copyright infringement and is an extension of the equitable doctrine of "unclean hands." Defendants always should raise the defense when the copyright owner claiming infringement has engaged in activities that attempt to, or do, abuse or extend its copyright monopoly

In Morton Salt, Suppiger argued that Morton Salt's salt depositing machine infringed its patent. The Court found that Suppiger was leasing its own salt depositing machines to canners on the condition that the licensees use a certain unpatented salt tablet produced by Suppiger's subsidiary Hostile to such a practice, the Supreme Court held that this tying arrangement was an attempt on the part of Suppiger to use its government-granted monopoly to acquire a monopoly in an unpatented product.2 The Court decided that, if it allowed Suppiger successfully to invoke its patent in the infringement suit, the Court would be assisting it to acquire a second monopoly and, thus, hurt competition and the public.3 Therefore, the Court invoked the "unclean hands" doctrine and held that the patentee was not allowed to obtain the protection of the law through an infringement suit, at least until it had stopped the offending practice.4

The Seminal Case

It is widely claimed that the first case to recognize the defense of copyright misuse and hold that it provides a complete defense to the defendant before it was the 1990 case of Lasercomb America, Inc. v. Reynolds.5 In fact, a much earlier decision should enjoy that distinction. Although the appeal of the case was dismissed and, therefore, the decision does not represent circuit law, M. Witmark & Sons v. Jensen6 dealt with the issue of a copyright misuse defense in 1948.

In M. Witmark, which dealt with a music license, the court held that by requiring theater owners to obtain a performance license before they even knew what music would be incorporated into the films they would show, the music licensor in effect gained monopolistic control over any film in which its music was used. The court found, therefore, that the licensor had obtained a potential economic advantage that far exceeded what it was granted by the copyright law. Although the licensor never had used the potential economic advantage, the court found it sufficient that the advantage was there. Thus, the court found misuse and barred the infringement claim against the theater owner.

Forty-two years later, the court in Lasercomb reached a similar decision in a different factual setting. In Lasercomb, the copyright owner licensed a CAD/CAM die making software program to the defendant and tried to prevent any of the defendants' officers, directors, or employees from designing their own CAD/CAM software for the next ninety-nine years. The court held that Lasercomb had misused its copyright both by attempting to stop the defendants from designing their own software in this area (even if it were non-infringing) and by extending this restriction for a period of time that potentially was longer than the life of the copyright.7 Interestingly, the court held that it was irrelevant that the defendants did not sign the licensing agreement and, thus, were not subject to its restrictions.

In adopting and enforcing the copyright misuse defense, the Lasercomb court found substantial similarities between the underlying policies of the patent and copyright laws and reasoned on that basis that the misuse defense also should be available in copyright cases.8 The court relied on the Supreme Court's holding in Mazer v. Stein:9

The economic philosophy behind the clause empowering Congress to grant patents and copyrights is the conviction that encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and inventors in "Science and useful Arts." Sacrificial days devoted to such creative activities deserve rewards commensurate with the services rendered.

In adopting the doctrine, the Lasercomb court went on to note that:

[t]he philosophy behind copyright, parallel to that discussed above for patent, is that the public benefits from the efforts of authors to introduce new ideas and knowledge into the public domain. To encourage such efforts, society grants authors exclusive rights in their work for a limited time.10

Indeed, substantially all of the courts that have adopted the doctrine have relied on the concept of patent misuse and the similarity...