Class 22 Copyright, Winter, 2010 Copyright Misuse Randal C. Picker Leffmann Professor of Commercial Law The Law School The University of Chicago Copyright © Randal C. Picker. All Rights Reserved.

Selling the Book I n Hypo u Author A offers to sell copy of her book to Buyer for $20 n Any copyright issues? May 11, 2015Copyright © Randal C. Picker2

Selling the Book II n Hypo u 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 n Any copyright issues? Does it matter whether Buyer had any independent interest in Author B? May 11, 2015Copyright © Randal C. Picker3

May 11, 2015Copyright © Randal C. Picker4 Screen Capture Slide

May 11, 2015Copyright © Randal C. Picker5 Screen Capture Slide

Selling the AMA Code n Facts u Gov’t pays for lots of medical care; wants to simplify paperwork u Creates Health Care Financing Admin to do that u HCFA decides to license a coding system created by the AMA, the Physician’s Current Procedural Terminology (CPT) May 11, 2015Copyright © Randal C. Picker6

Selling the AMA Code I n Hypo u AMA offers the gov’t a license for a one- time fee of $5 million n Any copyright issues? May 11, 2015Copyright © Randal C. Picker7

Selling the AMA Code II n Hypo u AMA offers the gov’t two different licenses: w $5 million commitment-free license Use it as much or as little as you want to w $2 million exclusive-use license Gov’t agrees to use the AMA CPT exclusively n Any copyright issues? May 11, 2015Copyright © Randal C. Picker8

Selling the AMA Code III n Hypo u Two licenses as before u Gov’t declines to make promise of exclusivity u Buys $5 million license and then uses AMA CPT exclusively n Any copyright issues? May 11, 2015Copyright © Randal C. Picker9

Selling the AMA Code IV n Hypo u AMA offers gov’t a royalty-free license but the gov’t must promise to use the CPT whenever possible n Any copyright issues? Different than Practice Management? May 11, 2015Copyright © Randal C. Picker10

Selling the AMA Code V n Actual Case u AMA offers royalty-free license, gov’t promises to use CPT whenever possible and promises not to use any other procedure nomenclature n Copyright issues? May 11, 2015Copyright © Randal C. Picker11

Understanding the Court n What Does this Mean? u “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. Conditioning the license on HCFA’s promise not to use competitors’ products constituted a misuse of the copyright by the AMA.” May 11, 2015Copyright © Randal C. Picker12

Understanding the Court n If this Makes Sense u Seems to mean that the gov’t can decide to use the CPT exclusively but can’t commit to doing so upfront u AMA’s cash price then can’t reflect commitment gov’t can’t make, so AMA should charge more May 11, 2015Copyright © Randal C. Picker13

What is Our Focus? n Do we care about … u Blocked competitors of the AMA? u Everyone else who will have to use the CPT who doesn’t have a royalty free license? May 11, 2015Copyright © Randal C. Picker14

Causation n Contractual Exclusivity vs. De Facto Exclusivity u What do we think is the link between the exclusivity promise and the decision by the gov’t t use only one coding system? n If this is right, how should the AMA respond to this case? May 11, 2015Copyright © Randal C. Picker15

Situating WIREdata n Hypo: Pencil Access u AT sells pencils to Wisconsin municipalities u The municipalities used those pencils to collect tax data; data are part of the public domain u AT insists as condition of sale of pencils that munis not distribute the tax data n Copyright issues? Pencil misuse? May 11, 2015Copyright © Randal C. Picker16

Answer n Answer u Not copyright misuse May 11, 2015Copyright © Randal C. Picker17

Situating WIREdata n Hypo: Private Collection u Private party collects factual data on houses in a community and stores data on a CD u Licenses use of that data for a fee by delivering a copy of CD to licensees u License controls extend of allowed use of data on the CD n Copyright issues? Contract issues? May 11, 2015Copyright © Randal C. Picker18

Answer n Tomorrow and Tomorrow and Tomorrow u This is—or is close to—ProCD u But again not a copyright misuse case May 11, 2015Copyright © Randal C. Picker19

Situating WIREdata n Hypo: Paper Instead of CD u Same facts, but instead of CD, private party prints books u No shrinkwrap licenses, but the copyright notice page in the book contains the following legend: May 11, 2015Copyright © Randal C. Picker20

Situating WIREdata w “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.” u Sam buys a copy of the book and inputs the data from it into a database n Copyright issues? Contract issues? May 11, 2015Copyright © Randal C. Picker21

Answer n Seen It Before, Sort Of u Saw restrictive legend of this sort in Bobbs- Merrill u Sup Ct declined to implement it on its own terms through copyright law; case didn’t resolve effect through contract law May 11, 2015Copyright © Randal C. Picker22

Answer u Should we be concerned about “media” neutrality: w If legend in book can’t be enforced but shrinkwrap on database can, more content will be in databases, less of it in books n Would anything change if the book contained federal judicial opinions rather than data? May 11, 2015Copyright © Randal C. Picker23

May 11, 2015Copyright © Randal C. Picker24 The First-Sale Doctrine n 109(a) u Notwithstanding the provisions of section 106(3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.

Access to the Public Domain n Big Picture Question u What devices are you allowed to use to lock up access to the public domain? May 11, 2015Copyright © Randal C. Picker25

Accessing the Public Domain n What mechanisms should be create to ensure access to works that are in the public domain? u The Deposit Requirement? w ml#407 ml#407 u Open Records Laws? w openrecordslaw.html openrecordslaw.html May 11, 2015Copyright © Randal C. Picker26