Copyright Misuse #iplaw #law #copyright #infringement #misuse

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Copyright misuse is a hard concept. It’s not hard to understand its mechanism, but rather its value. In short, when a copyright holder attempts to expand the scope of its copyright beyond what the law allows, the copyright holder is said to be misusing that copyright, and the alleged infringer can raise copyright misuse as a defense. The reason the defense is important is that it’s usually impossible to know exactly what kind of a world we’d have if the copyright misuse never occurred. You look around and say, “Wow, this is a great world we’re living in. All this art, all these computers. It’s great!” Sure, but it could be a lot better. Copyright misuse is one of the ways we make sure that things are better where “better” is hard to define.

Hiding Public Data within Copyrighted Material

In Assessment Technologies of WI LLC v. Wiredata, 350 F.3d 640 (7th Cir. 2004), a corporate software developer licensed their copyrighted software to various municipalities in Wisconsin. These municipalities collected public data using the software but, despite Wisconsin’s open record laws requiring them to release the data, were afraid to release the data because they believed that would violate the software license. The software developer confirmed that extracting the public data would necessarily violate their copyright, so their license strictly forbade it. The Court of Appeals for the Seventh Circuit held that the plaintiff had a valid copyright in their software but noted that the public data was uncopyrightable. Thus, the plaintiff “would lose this copyright case even if the raw data were so entangled with [their software] that they could not be extracted without making a copy of the program” (citing Sega Enterprises Ltd. v. Accolade, Inc., 977 F.2d 1510, 1520-28 (9th Cir. 1992)). The ability of the public to retain public information will always override the copyright owner’s rights.

Extending the Term of the Copyright

In Lasercomb America, Inc. v. Reynolds, 911 F.2d 970 (4th Cir. 1990), Lasercomb owned software that they licensed with a condition that the licensees, Holliday and Reynolds, didn’t create competing software for a term of 100 years, which could be longer than the life of the copyright. The defendants never signed the license, but Lasercomb overlooked that fact and sent four pre-release copies of the software to the defendants anyway. Holliday and Reynolds hacked the software, circumvented protections within it, essentially copied it and sold it as their own, and lied about all of it. Nevertheless, Holliday and Reynolds prevailed. When Lasercomb sued, Holliday and Reynolds defended with a claim of copyright misuse based on the unreasonableness of the 100-year non-competition clause. Lasercomb claimed that, because Holliday and Reynolds never signed the agreement, they weren’t technically subject to those terms. The Court disagreed, holding that

“[T]he misuse arises from Lasercomb’s attempt to use its copyright in a particular expression . . . to control competition in an area outside the copyright. . . . [T]he fact that [Holliday and Reynolds] were not parties to one of Lasercomb’s standard license agreements is inapposite to their copyright misuse defense. The question is whether Lasercomb is using its copyright in a manner contrary to public policy, which question we have answered in the affirmative.”

The Courts of Appeal for the 3rd, 5th, and 9th Circuits have also expressly recognized the doctrine of copyright misuse, with the 3rd and 9th Circuits recognizing it as an affirmative cause of action (i.e., the alleged infringer didn’t have to wait to be sued, but could instead file suit for a declaratory judgment of copyright misuse).

The Bottom Line

Attempts by a copyright holder to expand the scope of their copyright to cover non-copyrighted work should constitute copyright misuse. As long as the copyright misuse continues, their copyright will be unenforceable. As of right now, copyright misuse won’t result in a cancellation of your copyright, but in a future post, I’ll argue why the Supreme Court should adopt such an extreme remedy.

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Rob Bodine is a Virginia attorney focusing his practice on real estate and intellectual property law. He’s currently Virginia counsel with First Class Title, Inc., a Maryland title insurance and settlement company. Rob is also a licensed title insurance agent in Maryland and Virginia.