Volume I

Issue : 5: September 4, 2003

• U.S. Court of Appeals (9th Cir.) Asserts Jurisdiction over Online Retailer
• Court Limits Extraterritoriality of the U.S. Copyright Act
• Amazon.com Launches Lawsuits in U.S. and Canada to Stop Spoofing
• Property and Trade Secret Rights Outrank Free Speech Rights in DVD Copying Code Case
• Parties To Litigation Do Not Hold Copyrights Over Examination for Discovery Transcripts
• U.S. Court of Appeals Upholds Statutory Damages for Domain Registered Prior to the Enactment of ACPA
• Major U.S. ISP EarthLink Sues John Doe Spammers in B .C. and Alabama
• Defence of Misuse Extended to Suppression of Criticism in Copyright
• Online Broadcasters Sue Recording Industry (RIAA)
• Sixth Circuit Court Strikes Down Michigan Wine Law as Unconstitutional
• Saskatchewan Court of Appeal Upholds Criminal Conviction For Online Marketing Scheme
• U.S. First - North Dakota Prosecutes a Man for Gambling on the Internet
• U.S. Appeals Court (9th Cir.) Rules Massively Overbroad Subpoena For E-Mails Led to Privacy Violation

Home > Volume I > Issue 5: September 4, 2003 > Defence of Misuse Extended to Suppression of Criticism in Copyright

Defence of Misuse Extended to Suppression of Criticism in Copyright

In Video Pipeline Inc. v. Buena Vista Home Entertainment, the U.S. Court of Appeals (3rd Cir.) affirmed the District Court's preliminary injunction against Video Pipeline's online display of "clip previews" (for a summary of the District Court's decision, see August 21, 2003 issue of Laws of .Com). Video Pipeline compiles clip previews. Video Pipeline and Disney had entered into a license agreement whereby Disney licensed its movie "trailers" subject to license terms prohibiting licensees from using the movie trailers in a manner which is "derogatory to or critical of the entertainment industry or of [Disney]". Thereafter, Disney provided Video Pipeline with over 500 movie trailers. Video Pipeline expanded its use of the trailers by including them on its website, a use not contemplated by the license agreement. Disney requested that the trailers be removed, and Video Pipeline complied.

Video Pipeline then filed a complaint to the District Court that its online use of the trailers did not violate federal copyright law. Disney then terminated the license agreement. Thereafter, Video Pipeline replaced some of its trailers which had been removed from the website at Disney's request, by copying two minute segments from at least 62 Disney movies. Video Pipeline then amended its complaint to seek a declaratory judgment allowing it to display the clip previews on its website, which was denied, the Court entering a preliminary injunction prohibiting such display, from which Video Pipeline appealed.

Video Pipeline defended on the ground that its publication was fair use, and that Disney's position was a misuse of copyright. Disney, said Video Point, was using copyright law not only to obtain a return for its creative efforts (which is a purpose consistent with copyright protection) but also to suppress criticism (a purpose inconsistent with copyright protection).

The Court of Appeals, in rejecting both defenses, extended the doctrine of patent misuse to copyright (which had been more recently extended by courts other than the Court of Appeal, 3rd Cir. and the Supreme Court). The doctrine of misuse establishes that a patent holder may not use the authority extended to it under the U.S. Patent Act to restrict competition (Morton Salt Co. v. Suppiger Co., 314 U.S. 488 (1942)). In the case under discussion, the Court of Appeals extended the doctrine beyond the anti-competition or anti-trust analysis to include the suppression of criticism, in order to give effect to the purpose of copyright protection which is to "promote the creation and publication of free expression". Therefore, the Court expressly recognized that the doctrine of misuse may operate beyond its traditional anti-competitive context, notwithstanding the fact that it was inapplicable to Video Pipeline in the present case.

For a copy of the decision (Court of Appeal), visit:

http://www.ca3.uscourts.gov/recentop/week/022497p.pdf