Copyright Misuse: A Shield Against Accusations of Copyright Infringement

Copyright Misuse: A Shield Against Accusations of Copyright Infringement

Copyright is a form of protection grounded in the U.S. Constitution that gives the creator of a written or other artistic work control over its use for commercial purposes. While copyright is a powerful tool, copyright holders cannot exploit that power for improper purposes.

Sometimes intellectual property litigation in state and federal court is necessary for copyright owners to establish or re-establish control over their copyrighted works. But, in the wrong hands, copyright litigation can also be used in an attempt to improperly dominate the marketplace and subdue potential competitors. When a copyright is used to facilitate illegal anticompetitive practices, attorneys with copyright experience can help people accused of copyright infringement raise a copyright misuse defense.

Antitrust Violations by Copyright Holders Often Underlie Copyright Misuse

Copyright misuse is a defense to copyright infringement allegations which operates to preclude enforcement of a copyright during the period in which it is being improperly used. To raise a successful copyright misuse defense, an individual or business does not have to be directly affected by the copyright holder's inequitable conduct. Rather, the individual or business only must show that the copyright is being used in a way contrary to the policies behind copyright ownership.

Copyright misuse generally arises in one of two situations. Perhaps the more common and well-defined circumstance is when the copyright is tied into some sort of antitrust violation by the copyright holder.

Antitrust laws apply to virtually all industries. They prohibit a wide range of practices that are seen as unfairly restraining trade, such as price fixing, and certain corporate mergers that would impair the competitiveness of a given market.

Another common antitrust issue that can involve copyright misuse is a tying arrangement. A tying arrangement is an agreement in which a seller conditions the sale of one product on the buyer's agreement to purchase a separate product as well. Although tying arrangements are not necessarily unlawful, antitrust concerns are raised when they are used to bolster the seller's preexisting market power or to inhibit competition in the marketplace.

Copyright actions which do not rise to the level constituting antitrust violations can still be contrary to public policy and may give rise to claims of copyright misuse. Overly restrictive licensing rules for use of a copyrighted property can fall into this category.

Recent California Case Expands Copyright Misuse Doctrine

The copyright misuse defense is still very much a developing legal concept. In early November 2011, a U.S. District Court in California extended copyright misuse protection to mass-merchandiser Costco in a lawsuit involving a watch manufacturer that attempted to impose overly oppressive sales restrictions based on its copyrighted image on a small logo stamped on its products.

The legal doctrine of copyright misuse is constantly evolving, and new interpretations may benefit your business or help you defend accusations of copyright infringement. If you have become involved in a copyright infringement lawsuit or have general copyright questions, contact an experienced intellectual property attorney to explore the best legal options for you.