On May 2, John Peterson took issue with my article at
http://interactionlaw.com/interactionlaw/id12.html (Microsoft Risks
Copyright Impotence). As a student of the law, he was apparently
unimpressed by the fact that I cited only one case in support of my
position. On Sunday, Mr. Peterson sent a terse e-mail chiding my
failure to respond. I do so now, with apologies to non-lawyers for the
length and the legalese.
Mr. Peterson seeks to re-frame the question as "Does requiring
difference licenses for different operating systems constitute misuse of
copyright?" What Mr. Peterson fails to appreciate is that when
Microsoft purports to license a particular use, it must be a use it has
a right to license. In this case, Microsoft is attempting to license
the private performance of its works, but that's like me licensing
people to use the sidewalk in front of my house. I may find people
willing to pay, but that does not mean I have the right to license such
use, nor that anyone who walks along the sidewalk without paying me is
doing anything illegal. The law doesn't change just because I happen to
be Microsoft and say "you can only use my software if you promise to not
walk on the sidewalk in front of Bill gates' house."
Of crucial importance here is the fact that no one - not even a thief or
a pirate - can infringe upon any of the exclusive rights of a copyright
owner by making a non-public performance of a work. Copyright owners
enjoy an exclusive right to perform a work publicly, but have no right
to exclude anyone from performing a work privately. Twentieth Century
Music Corp. v. Aiken, 422 U.S. 151, 155 (1975). A few years earlier,
the Supreme Court had explained: "The Copyright Act does not give a
copyright holder control over all uses of his copyrighted work.
Instead, [Section 106] of the Act enumerates several 'rights' that are
made 'exclusive' to the holder of the copyright. If a person, without
authorization from the copyright holder, puts a copyrighted work to a
use within the scope of one of these 'exclusive rights,' he infringes
the copyright. If he puts the work to a use not enumerated in [Section
106], he does not infringe." Fortnightly Corp. v. United Artists
Television, Inc., 392 U.S. 390, 393-95 (1968) (footnotes omitted).
In his dissent in the Betamax case (where the videocassette recorder
survived a legal challenge), Justice Blackmun explained: "Section
106(4) grants a copyright owner the exclusive right to perform the work
'publicly,' but does not afford the owner protection with respect to
private performances by others. A motion picture is 'performed'
whenever its images are shown or its sounds are made audible. § 101.
Like '[singing] a copyrighted lyric in the shower,' Twentieth Century
Music Corp. v. Aiken, 422 U.S. 151, 155 (1975), watching television at
home with one's family and friends is now considered a performance.
Home television viewing nevertheless does not infringe any copyright -
but only because § 106(4) contains the word 'publicly.'" (Sony Corp. of
America v. Universal City Studios, Inc., 464 U.S. 417, 468-69 (1984),
Blackmun, J., dissenting (footnotes and citations omitted).) And you
can watch those programs on the television of your own choosing!
The private performance of a lawfully reproduced copy of Microsoft
software is not an infringement of any of the exclusive rights of the
copyright holder, and Microsoft may not use its exclusive rights to gain
control over the public's rights. "A copyright owner may not enforce
its copyright to . . . use it in any manner violative of the public
policy embodied in the grant of a copyright." Tricom, Inc. v. Electronic
Data Systems Corp., 902 F. Supp. 741 (E.D. Mich. 1995) (citations
omitted). Leveraging copyright power to control behavior which Congress
intended remain outside of the copyright owner's control is the type of
conduct condemned in United States v. Paramount Pictures, Inc., 334 U.S.
131 (1948); Morton Salt Co. v. G.S. Suppiger Co., 314 U.S. 488 (1942);
Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502
(1917), and Lasercomb Am., Inc. v. Reynolds, 911 F.2d 970 (4th Cir.
1990).
The public policy granting copyrights "excludes from it all that is not
embraced" in the original copyrighted work, and "equally forbids the use
of the copyright to secure an exclusive right or limited monopoly"
beyond the scope of the Copyright Act and which is "contrary to public
policy to grant." (Lasercomb America, Inc. v. Reynolds, 911 F.2d 970,
977 (4th Cir. 1990) (quoting with revisions from Morton Salt, 314 U.S.
at 492) (brackets omitted).) Mr. Peterson has suggested that this
Fourth Circuit decision is not good enough, so I have relied more on
Supreme Court cases. Let's see a little more of where the Supreme Court
stands.
In 1917, the Supreme Court took on the issue of private enlargement of
copyright in the Motion Picture Patents case. It determined that the
owner of an intellectual property monopoly - in that case a patented
motion picture film projector - could not lawfully use a "licensing"
mechanism like Microsoft is using to obligate purchasers of the machine
to use it solely with motion pictures containing another patent which
the company also owned. (Motion Picture Patents Co. v. Universal Film
Mfg Co., 243 U.S. 502.) On page 519, the court stated: "A restriction
which would give to the plaintiff such a potential power for evil over
an industry which must be recognized as an important element in the
amusement life of the nation . . . is plainly void, because wholly
without the scope and purpose of our patent laws, and because, if
sustained, it would be gravely injurious to that public interest, which
we have seen is more a favorite of the law than is the promotion of
private fortunes." This position was followed in Carbice Corp. of Am.
v. Am. Patents Dev. Corp., 283 U.S. 27 (1931) (owner of a patented
package that used solid carbon dioxide could not obligate licensees to
use its own solid carbon dioxide).
The relevance of the Supreme Court's analysis in Motion Picture Patents
Co. is inescapable. If it is unlawful to extend the statutory monopoly
by limiting the use of a patented motion picture projector to films
containing other intellectual property owned by the licensor, then it
stands to reason that it is equally unlawful to license only on
condition that it not be used in conjunction with an operating system of
choice.
In Morton Salt Co. v. G.S. Suppiger Co., 314 U.S. 488 (1942), the
Supreme Court examined the use of the patent monopoly in a machine for
depositing salt tablets to force licensees to use only salt tablets
manufactured by the patent holder. The court said: "The public policy
which includes inventions within the granted monopoly excludes from it
all that is not embraced in the invention. It equally forbids the use
of the patent to secure an exclusive right or limited monopoly not
granted by the Patent Office and which it is contrary to public policy
to grant. (Id. at 492.)
And this line of reasoning is not limited to patent and trademark law.
Morton Salt itself noted with approval the application of this doctrine
to copyrights. (Id. at 494.) In United States v. Paramount Pictures,
Inc., 334 U.S. 131 (1948), the Supreme Court further explained the
limitations on copyright power in the context of "block booking" - "the
practice of licensing, or offering for license, one feature or group of
features on condition that the exhibitor will also license another
feature or group of features released by the distributors during a given
period." (Id. at 156.) Like patent law, the exclusive right granted
under the Copyright Act does not include any privilege to "add to the
monopoly of the copyright in violation of the principle of the patent
cases involving tying clauses." (Id. at 158.)
>From these foundations, the doctrine of copyright misuse has developed
both as a violation of antitrust law and as an affirmative defense
against copyright infringement when the copyright holder, by means of an
over-reaching license or other method of control, tries "to secure an
exclusive right or limited monopoly not granted by the [Copyright]
Office and which it is contrary to public policy to grant." (Lasercomb
Am., Inc. v. Reynolds, 911 F.2d 970, 976 (4th Cir. 1990), quoting from
Morton Salt, 314 U.S. at 491.) Moreover, copyright misuse is such a
violation of public policy that some courts will not require that the
person against whom the misuse is directed be a party to the litigation.
"[T]he fact that appellants here were not parties to one of Lasercomb's
standard license agreements is inapposite to their copyright misuse
defense." Lasercomb, 911 F.2d at 979.)
United States courts have a long history of recognizing that licensing
terms which have the purpose and effect of voiding the boundary around
the exclusive rights of the copyright holder, thereby enlarging the
copyright holder's universe of control, constitute misuse of copyrights
and should be void as against public policy. The same should be true
where EULAs are used to the same end. "Sound policy rationales support
the analysis of those courts that have found shrinkwrap licenses to be
unenforceable. A system of 'licensing' which grants software publishers
this degree of unchecked power to control the market deserves to be the
object of careful scrutiny." (Softman Prods. Co. v. Adobe Sys., Inc.,
171 F. Supp. 2d 1075, 1091 (C.D. Cal. 2001).) The Softman court was
quite critical of Adobe's efforts to compel third-parties to relinquish
the rights they enjoy under the Copyright Act through use of an end-user
license agreement - in that case, a "license" that purported to make the
third party waive its rights under Section 109 to resell lawfully made
copies without Adobe's consent. "The Court finds that the provisions
contained in Adobe's EULA purport to diminish the rights of customers to
use the software in ways ordinarily enjoyed by customers under copyright
law. Therefore, these restrictions appear to be inconsistent with the
balance of rights set forth in intellectual property law." (Id. at 1090
(footnote omitted).)
Indeed, a contrary result would be untenable, for it would manage "to
transform a contractual term that software purveyors unilaterally
include in their contracts into a binding provision on the world - even
on parties who are not in privity of contract - and one that, moreover,
undoes the dictates of Congress by undermining an essential feature of
the Copyright Act!" 2 M. Nimmer & D. Nimmer, NIMMER ON COPYRIGHT §
8.12[B][1][d][i] (2002) (exclamation point in original).
The United States is not alone in this. In the United Kingdom, the
Commission on Intellectual Property Rights recently concluded that
"Where suppliers of digital information or software attempt to restrict
'fair use' rights by contract provisions associated with the
distribution of digital material, the relevant contract provisions may
be treated as void." (Commission on Intellectual Property Rights,
Integrating Intellectual property Rights and Development Policy:
Executive Summary, September 2002, at 22.)
In Australia, the Copyright Law Review Committee recommends that the
Australian Copyright Act "be amended to provide that an agreement, or a
provision of an agreement, that excludes or modifies, or has the effect
of excluding or modifying, the operation of [certain limitations upon
the rights of copyright holders] has no effect." (Recommendation 7.49,
Copyright Law review Committee, Copyright and Contract, Commonwealth of
Australia 2002.)
It is not my custom to go into this much detail when I'm not "on the
meter," but I feel deeply that it is not just developers who may lose
out if these bogus licenses are allowed to prevail. It is also the
public, that stands to gain from the innovative new works and uses
created by the developers, who would suffer as well. But one
disclaimer: Mr. Peterson will likely soon be licensed to practice law,
and he obviously has an opinion different from mine, so don't take this
as legal advice - check with a lawyer whose judgment you trust before
thumbing your nose at an offensive EULA.
John
__________________
John T. Mitchell
http://interactionlaw.com
-----Original Message-----
From: John V. Petersen [mailto:John.V.Petersen at comcast .D.O.T net]
Sent: Friday, May 02, 2003 8:15 AM
To: John@interactionlaw.com
Cc: profox at leafe .D.O.T com
Subject: Commentary on your article: Microsoft Risks Copyright Impotence
<snip>
©2003 John T. Mitchell |
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