Class 21 Copyright, Autumn, 2016 Copyright Misuse 11/10/2018 Class 21 Copyright, Autumn, 2016 Copyright Misuse Randal C. Picker James Parker Hall Distinguished Service Professor of Law Ludwig & Hilde Wolf Teaching Scholar The Law School The University of Chicago

Selling the Book I Hypo Any copyright issues? 11/10/2018 Selling the Book I Hypo Author A offers to sell copy of her book to Buyer for $20 Any copyright issues? November 10, 2018

Selling the Book II Hypo 11/10/2018 Selling the Book II Hypo Author A offers to sell copy of her book to Buyer for $15 and a promise from the Buyer that Buyer will never read any books by Author B Any copyright issues? Does it matter whether Buyer had any independent interest in Author B? November 10, 2018

November 10, 2018

AMA CPT and Copyright What can the AMA claim copyright in? The medical procedures? The descriptions of those procedures? The five digit codes for those procedures? The compilation of all or some of that? November 10, 2018

Selling the AMA Code Facts 11/10/2018 Selling the AMA Code Facts Gov’t pays for lots of medical care; wants to simplify paperwork Creates Health Care Financing Admin to do that HCFA decides to license a coding system created by the AMA, the Physician’s Current Procedural Terminology (CPT) November 10, 2018

Selling the AMA Code I Hypo Any copyright issues? 11/10/2018 Selling the AMA Code I Hypo AMA offers the gov’t a license for a one-time fee of $5 million Any copyright issues? November 10, 2018

Selling the AMA Code II Hypo Any copyright issues? 11/10/2018 Selling the AMA Code II Hypo AMA offers the gov’t two different licenses: $5 million commitment-free license Use it as much or as little as you want to $2 million exclusive-use license Gov’t agrees to use the AMA CPT exclusively Any copyright issues? November 10, 2018

Selling the AMA Code III 11/10/2018 Selling the AMA Code III Hypo Two licenses as before Gov’t declines to make promise of exclusivity Buys $5 million license and then uses AMA CPT exclusively Any copyright issues? November 10, 2018

Selling the AMA Code IV Hypo 11/10/2018 Selling the AMA Code IV Hypo AMA offers gov’t a royalty-free license but the gov’t must promise to use the CPT whenever possible Any copyright issues? Different than Practice Management? November 10, 2018

Selling the AMA Code V Actual Case Copyright issues? 11/10/2018 Selling the AMA Code V Actual Case AMA offers royalty-free license, gov’t promises to use CPT whenever possible and promises not to use any other procedure nomenclature Copyright issues? November 10, 2018

Understanding the Court 11/10/2018 Understanding the Court What Does this Mean? “What offends the copyright misuse doctrine is not HCFA’s decision to use the AMA’s coding system exclusively, but the limitation imposed by the AMA licensing agreement on HCFA’s rights to decide whether or not to use other forms as well.” November 10, 2018

Understanding the Court 11/10/2018 Understanding the Court What Does this Mean? “Conditioning the license on HCFA’s promise not to use competitors’ products constituted a misuse of the copyright by the AMA.” November 10, 2018

Understanding the Court 11/10/2018 Understanding the Court If this Makes Sense Seems to mean that the gov’t can decide to use the CPT exclusively but can’t commit to doing so upfront AMA’s cash price then can’t reflect commitment gov’t can’t make, so AMA should charge more November 10, 2018

What is Our Focus? Do we care about … Blocked competitors of the AMA? 11/10/2018 What is Our Focus? Do we care about … Blocked competitors of the AMA? Everyone else who will have to use the CPT who doesn’t have a royalty free license? November 10, 2018

Causation Contractual Exclusivity vs. De Facto Exclusivity 11/10/2018 Causation Contractual Exclusivity vs. De Facto Exclusivity What do we think is the link between the exclusivity promise and the decision by the gov’t t use only one coding system? If this is right, how should the AMA respond to this case? November 10, 2018

Disney Licensing Agreement in Video Pipeline Limitation on Use “The Website in which the Trailers are used may not be derogatory to or critical of the entertainment industry or of [Disney] (and its officers, directors, agents, employees, affiliates, divisions and subsidiaries) or of any motion picture produced or distributed by [Disney] ... [or] of the materials from November 10, 2018

Disney Licensing Agreement in Video Pipeline Limitation on Use “which the Trailers were taken or of any person involved with the production of the Underlying Works. Any breach of this paragraph will render this license null and void and Licensee will be liable to all parties concerned for defamation and copyright infringement, as well as breach of contract....” November 10, 2018

Situating WIREdata Hypo: Pencil Access 11/10/2018 Situating WIREdata Hypo: Pencil Access AT sells pencils to Wisconsin municipalities The municipalities used those pencils to collect tax data; data are part of the public domain AT insists as condition of sale of pencils that munis not distribute the tax data Copyright issues? Pencil misuse? November 10, 2018

11/10/2018 Answer Answer Not copyright misuse November 10, 2018

Situating WIREdata Hypo: Private Collection 11/10/2018 Situating WIREdata Hypo: Private Collection Private party collects factual data on houses in a community and stores data on a CD Licenses use of that data for a fee by delivering a copy of CD to licensees License controls extent of allowed use of data on the CD November 10, 2018

Situating WIREdata Copyright issues? Contract issues? 11/10/2018 Situating WIREdata Copyright issues? Contract issues? November 10, 2018

Answer Tomorrow This is—or is close to—ProCD 11/10/2018 Answer Tomorrow This is—or is close to—ProCD But not a copyright misuse case November 10, 2018

Situating WIREdata Hypo: Paper Instead of CD 11/10/2018 Situating WIREdata Hypo: Paper Instead of CD Same facts, but instead of CD, private party prints books No shrinkwrap licenses, but the copyright notice page in the book contains the following legend: November 10, 2018

11/10/2018 Situating WIREdata “All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher.” November 10, 2018

Situating WIREdata Copyright issues? Contract issues? 11/10/2018 Situating WIREdata Sam buys a copy of the book and inputs the data from it into a database Copyright issues? Contract issues? November 10, 2018

Answer Seen It Before, Sort Of 11/10/2018 Answer Seen It Before, Sort Of Saw restrictive legend of this sort in Bobbs-Merrill Sup Ct declined to implement it on its own terms through copyright law; case didn’t resolve effect through contract law November 10, 2018

11/10/2018 Answer Should we be concerned about “media” neutrality: If legend in book can’t be enforced but shrinkwrap on database can, more content will be in databases, less of it in books Would anything change if the book contained federal judicial opinions rather than data? November 10, 2018