Copyright Protection and Copyright Abuse

Author: Khushboo Nahar, Research Associate

Copyright is a right given by the law to the creators of literary, dramatic, musical and artistic works and producers of cinematograph films and sound recordings. In fact, it is a bundle of rights including, inter alia, rights of reproduction, communication to the public, adaptation and translation of the work. There could be slight variations in the composition of the rights depending on the work.

Copyright protection is available for original work of authorship that is fixed in any “tangible medium of expression” and lasts for the life of the author plus sixty years. In no case does copyright protection for an Original work of authorship extend to any idea, procedure or process or discovery regardless of the form in which it is described, explained, illustrated or embodied in such work ((Available at

There is a general consensus that that the ultimate goal of a copyright is to encourage the creation and dissemination of creative works, while the immediate goal is to enable copyright owners to recoup their investment ((Twentieth Century Music Corp. V . Aiken, 422 U.S 151, 156 (1975).)). It is absolutely crucial to limit the rights of Copyright property owners to the minimum necessary to “spur the creation and dissemination of inventions and works of authorship,” because it is equally necessary to have a competitive market.

In the past two decades, copyright protection throughout the world has been greatly expanded to respond to challenges posed by new communications technologies and copyrightable subject matters. As protection has increased, the growing power of copyright owners has also led to market abuses that stifle competition and innovation. In response to these abuses, courts, litigants, policymakers, and commentators have increasingly embraced competition law, the doctrines of copyright misuse and unclean hands, and tort law concepts as counter-balancing tools.

Unfortunately this growing power has tempted some copyright owners to use their exclusive rights beyond what is permissible under the grant or beyond what is in public interest.

Case laws relating to Copyright Abuse

In United States v. Microsoft Corp ((253 F.3d 34,47 (D.C. Cir.2001).)), a widely-reported antitrust case, the government contended, among other claims, that Microsoft had illegally bundled its web browser, Internet Explorer, with its Windows operating system.” Although Microsoft did not require computer manufacturers to install Internet Explorer along with its licensed operating system, it provided the browser software free of charge and included in its license provisions that essentially prohibited the manufacturers from installing any other browsers. Thus, although Microsoft did not technically require manufacturers to install Internet Explorer, the manufacturers’ perceived need to include browsers on computers meant that they would install Microsoft’s product by default. The government therefore claimed that Microsoft violated the Sherman Act by tying its browser to the operating system in an effort to foreclose competition in the browser market.

Video Pipeline Inc. v. Buena Vista Home Entertainment Inc ((342 F.3d 191, 195 (3d Cir. 2003).))concerned the potentially overreaching agreements Disney used to license movie trailers to website operators for use on the Internet. The agreements required licensees to keep their websites free of material critical of Disney and the entertainment industry. As stated in the relevant portion of the agreements:

“The Website in which the Trailers are used may not be derogatory to or critical of the entertainment industry or of [Disney] 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. 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….

Because Disney sought to use copyright law to suppress criticism, Video Pipeline claimed that Disney had engaged in copyright misuse and therefore should not receive protection under copyright law.

In essence, there are four types of abuse cases:

(1) the use of copyright to exact concessions from the licensee;

(2) restriction of the licensee’s ability to deal with the copyright owner’s competitors;

(3) dealings that limit another’s ability to compete; and

(4) the anticompetitive use of the judicial system.

Exacting Concessions from the Licensee

Because copyright gives the owner the exclusive right to distribute the protected work, a copyright owner often enjoys a favorable bargaining position when dealing with potential buyers and licensees. If demand for the copyrighted work is sufficiently great, the owner may be able to take advantage of that bargaining power to exact certain legal concessions from a licensee ((The copyright owner has considerably more control in the case of a license than in the case of an outright sale.)). First, and most obviously, the owner may be able to command a higher price than it could have charged if the work were not copyrighted. Second, the owner may insist on other non-price concessions involving the use of the copyrighted work. For example, many software licenses allow only for noncommercial use; others prevent the licensee from reverse engineering the software to determine how it works. Third, the owner may even insist on non-price concessions that do not involve the copyrighted work itself, but are nevertheless valuable to the owner. For example, the owner may agree to license only on the condition that the licensee keeps the terms of the agreement secret. From a competition law perspective, each of these types of concessions presents its own unique policy concerns.

Limiting the Licensee’s Ability to Deal with Competitors

One special category of concessions that copyright owners have sought to extract from their licensees concerns the licensees’ ability to deal with the copyright owners’ competitors.  Obviously, if a copyright owner can ensure that a licensee buys only from the owner, its economic position will improve. One example of such an agreement is the exclusive supply contract, in which the licensee agrees to acquire all of a particular type of product from the owner. Another example is the so- called “tying arrangement,” in which the owner conditions its license of the copyrighted product on the licensee’s agreement to acquire a second product in the same transaction. By linking a competitor’s ability to compete in the market for that other product, the copyright owner gains what may be deemed an unfair advantage. A variation on the tying arrangement is the exclusive service clause, under which the licensee agrees to use only the owner’s maintenance or repair services in connection with the copyrighted product.

Limiting Another’s Ability to Compete

The third line of cases involves situations in which a competitor has entered, or would like to enter, into some sort of contract with the copyright owner. The competitor may want to buy or license the owner’s work for its own use. In these cases, as in the first category, the competitor is also a potential licensee. However, because of the competition between this potential licensee and the owner, cases in which a competitor wants to license the copyrighted work typically involve the copyright owner’s refusal to deal, rather than terms imposed as part of a deal. For example, a copyright owner may refuse to sell or license copies of the work to a competitor who wishes to compete in the market for the sale of that work ((Director of Investigation & Research V Warner music can. Ltd (1997)78 C.P.R.3d 321)). In the alternative, the owner may refuse to sell or license the work to someone who competes with the owner not in the market for the work, but in some other market. Thus, if the owner sells both the copyrighted software and the service of installing that software, the copyright owner’s refusal to license the software will limit the ability of other firms to compete in the market for installation services.

Anticompetitive Use of the Judicial System

Copyright law provides copyright owners with certain procedural advantages in litigation. Because of these advantages, and the potential for considerable damages in a copyright case, defending a copyright suit can be daunting. Some copyright owners recognize this procedural edge and use a lawsuit–or even the threat of a lawsuit-as a tool to control the behavior of others. In some cases, the defendant alleges that the claims are objectively groundless and that the copyright owner is bringing the case not to protect its legitimate copyright interests, but to extend its rights or to control the defendant in regards to conduct that is unrelated or only incidentally related to the copyright ((Online policy group V Diebold,Inc,337 F.Supp.2d 1195, 1203(N.D. CAL. 2004).)). In others, the plaintiff’s main motive in bringing the action is to protect other, non-copyright interest even though the defendant’s conduct may technically infringe the copyright.

Doctrine of Copyright Misuse

The copyright misuse doctrine, is a defense arising from judicial creation, allows copyright infringers to escape liability when the copyrighted owner has misused the rights granted under the copyright.

In Lasercromb America Inc, V. Reynolds, the court recognized a copyright misuse defense based on the recognition of the patent misuse defense. Lasercromb America developed a die software program. In this case the defendant copied the program almost entirely and marketed the program. In defense the defendant argued copyright misuse based on the language in Lasercromb America’s standard licensing agreements restricting licensees from creating any of their own die making software. The duration of the agreement was for 90 years, the court stated that a misuse of the copyright defense is inherent in the law of copyright

Under the equitable doctrine of unclean hands the courts will deny an otherwise meritorious claim where the claimant has acted so improperly that the need to punish the claimants wrongful behaviour outweighs the need to punish the defendants allegedly wrongful conduct ((Playboy enterprise V. Chuckleverry Publishing 486 F. Supp. 414, 435)). The principle underlying the doctrine is that the equity presumes harm when an unclean plaintiff obtains relief, consequently, one who desires justice  must come to court with a clean slate ((Broadcast Music Inc V. Hearst, 746 F.Supp. 320, 329-330)).

The theory of IP misuse, which stems from the unclean hands doctrine, prevents a plaintiff from enforcing an IP right if that plaintiff is guilty of misconduct with respect to that right.

Balance between Competition Law and IPR in India

Copyright protection exists in tension with our open, competitive market beliefs. They offer a limited monopoly in a legal framework that otherwise abhors monopolies. As a society we want to limit the scope and length of monopoly to the absolute minimum that is necessary to incentivize the authors ((73 Tenn. L. Rev. 237 (2005-2006).)).

In India, the IPR laws like the Patent Act or Copyright Act or Trade Marks Act have over riding powers over the Competition Act in matters related to any abuse of IPR. If an anti-competitive result arises from the exercise of the rights by the copyright holder, the copyright act provides for issue of licenses to stop such anticompetitive activity. The Competition Act exempts mergers and dominant abuse in the market. Such exemptions should be made with leniency and not arbitrary.

Despite the fact that IPR and Competition Law are seen as overlapping fields of law with conflicting purposes, it is prominent for them to work in tandem to maintain balance in the market. IPR, on one hand, allows IPR holders to exercise exclusivity over their work, whereas Competition Law on the other hand, restricts any kind of monopoly in the market by holding restrains as earlier mentioned.  Thus, in a way, it can be said IPR holders abuse their position by creating dominance in the market.

Leaving aside conflicting interests, there are other ways where IPR and Competition Law are in sync with each other. By creating and protecting an “idea” or “expression”, IPR has carved a niche in the market by introducing diverse products and services, which only enhances competition. This competition would involve creating the best product in the market in terms of innovation, price, consumer growth, to name a few.