Class 20 Copyright, Spring, 2008 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? June 4, 2016Copyright © 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? June 4, 2016Copyright © Randal C. Picker3

June 4, 2016Copyright © 2005 Randal C. Picker4 Screen Capture Slide

June 4, 2016Copyright © 2005 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) June 4, 2016Copyright © 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? June 4, 2016Copyright © 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? June 4, 2016Copyright © 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? June 4, 2016Copyright © 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? June 4, 2016Copyright © 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? June 4, 2016Copyright © 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.” June 4, 2016Copyright © 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 June 4, 2016Copyright © 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? June 4, 2016Copyright © 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? June 4, 2016Copyright © Randal C. Picker15

Situating WIREdata I n Hypo u Private party collects factual data on houses in a community u Stores that 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? June 4, 2016Copyright © Randal C. Picker16

Answer n Been There, Done That u This is—or is close to—ProCD June 4, 2016Copyright © Randal C. Picker17

Situating WIREdata II n Hypo 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: June 4, 2016Copyright © Randal C. Picker18

Situating WIREdata II 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? June 4, 2016Copyright © Randal C. Picker19

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 June 4, 2016Copyright © Randal C. Picker20

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? June 4, 2016Copyright © Randal C. Picker21

June 4, 2016Copyright © Randal C. Picker22 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.

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 June 4, 2016Copyright © Randal C. Picker23

WIREdata n What is at stake here? n Is this a u Copyright case? u Contracts case? u Wisconsin open records law case? June 4, 2016Copyright © Randal C. Picker24

Video Pipeline n Core Facts u Disney has agreements regarding the use of Disney trailers on websites u Disney seems to supply hyperlinks for the trailers and then restricts how the links may be set up: June 4, 2016Copyright © Randal C. Picker25

Video Pipeline w “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 which the Trailers were taken or of any person involved with the production of the Underlying Works. June 4, 2016Copyright © Randal C. Picker26

Video Pipeline w “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....” June 4, 2016Copyright © Randal C. Picker27