Microsoft says its copyright to Windows permits its exclusionary contracts
with OEMs. I asked on the cyberia list for background; forthwith, a response.
-Declan
***********
Date: Wed, 2 Feb 2000 00:11:36 -0500
>From: Mike Oliver <[email protected]>
>Subject: Re: Microsoft reply brief highlights copyright argument
>
>Declan McCullagh wrote:
> > This is the most detailed argument I've seen yet on this issue from MS.
> > Anyone know if this argument been raised by a software company before as an
> > antitrust defense?
>
>It is not a novel argument in antitrust law. It was discussed at
>length in Data General Corp. v. Grumman Systems Support Corp., 32
>USPQ2d 1385 (1st Cir. 1994), where the copyright infringement
>defendant asserted the refusal to license was an antitrust
>violation. It has also been discussed tangentially in PREI, INC. v.
>COLUMBIA PICTURES, 508 U.S. 49 (1993), dealing with an alleged 'sham'
>suit by the MPAA asserting its copyright against hotel operators.
>PREI held (simplified) that a plaintiff must prove the claim asserted
>in court is 'objectively baseless' to avoid the Noerr Pennington
>defense (1st amendment privilege). The 'novel' issue I always
>thought was whether the bad faith assertion of a *valid* right can
>ever be an antitrust violation. I always believed that it could (as
>argued in my now really outdated Law Review article from 1989,
>available at: http://www.bowie-jensen.com/articles/badfaith.html),
>but PREI held otherwise. PREI, however, applies directly only when a
>right is asserted in court (i.e. its an access to court/1st amendment
>issue). It would not be directly applicable where a private party
>asserts a federally protected right in negotiating with another
>private party in a contract. As discussed below, M$'s arguments on
>this issue are overly simplistic and arrogant (IMO). If they had
>been 'novel' (IMO), they would have worked in the PREI case to
>explain how their actions have to 'immune' from antitrust liability
>in order to enjoy the rights to enforce those copyrights in court.
>Instead, they made (IMO) pathetically bad arguments.
>
>In the Data General case, the defendant was not successful, but the
>court never said that 'mere' exercise of a federally granted right
>can never be a violation. Here is a part of the discussion:
>
>"(4) Harmonizing the Sherman Act and the Copyright Act
>
>"Since neither the Sherman Act nor the Copyright Act works a partial
>repeal of the other, and since implied repeals are disfavored, e.g.,
>Watt v. Alaska, 451 U.S. 259, 267 (1981), we must harmonize the two
>as best we can, id., mindful of the legislative and judicial
>approaches to similar conflicts created by the patent laws. We must
>not lose sight of the need to preserve the economic incentives fueled
>by the Copyright Act, but neither may we ignore the tension between
>the two very different policies embodied in the Copyright Act and
>the Sherman Act, both designed ultimately to improve the welfare of
>consumers in our free market system. Drawing on our discussion
>above, we hold that while exclusionary conduct can include a
>monopolist's unilateral refusal to license a copyright, an author's
>desire to exclude others from use of its copyrighted work is a
>presumptively valid business justification for any immediate harm to
>consumers."
>
>M$'s arrogance is apparent in its argument: "...Microsoft need not
>proffer a business justification, or any justification for that
>matter, for engaging in conduct clearly authorized by federal
>copyright law." I have not read the case they cite (In re Indep.
>Serv. Orgs. Antitrust Litig., 989 F. Supp. at 1141), but this
>sweeping statement is not consistent with the better reasoned cases,
>or the law, so far as I know (but I admit I am not aware of a Supreme
>Court case on this point). Data General certainly does not support
>this statement.
>
>M$'s argument that the patent/antitrust case law should apply to
>copyrights is also arrogant: "The patent cases are particularly
>applicable to the realm of computer software where copyrighted works
>reflect an exercise of invention akin to that found in the patent
>context." In one sentence, they have ignored and misconstrued all of
>the case law, much of it at the Supreme Court level, distinguishing
>patents and copyrights (and trade secrets). E.g. Kewanee Oil and
>cases cited therein. I join the other posters that believe this
>argument is frightening if accepted.
>
>In Data general the court applied its 'presumptively valid business
>justification' rule of law and upheld the plaintiff's refusal to
>license its copyrighted work. The court clearly recognized that the
>antitrust law could be violated by mere enjoyment of the protected
>right.
>
>M$ is being overly simplistic in making this argument (at least they
>are in the part you quoted). A number of courts have had to deal
>with the apparent, or in some cases actual, conflict between the
>Sherman Act and the Copyright Act. In every instance of which I am
>aware, the courts have never agreed with the over-simplified argument
>propounded by M$. They have applied traditional antitrust
>principles, such as the misuse doctrine, the Noerr Pennington Sham
>doctrine, traditional refusal to deal analysis, principles of tying
>(argued in Data General), the essential facility doctrine, group
>boycott analysis, and other long-standing antitrust principles to an
>actor's conduct, whether its enjoyment of the bundle of real-property
>rights, personal property rights, IP rights, or any other 'right'
>protected by law. The point is, if you enjoy monopoly power in a
>relevant market, your property rights, whatever they might be, are
>subject to a higher scrutiny under the antitrust law than if you do
>not enjoy monopoly power.
>
>I admit a bias against M$. It derives from the arrogance they have
>of how the law should apply to them. Its one thing to make arguments
>that are novel extensions of existing legal principles, and to
>address the opposing party's arguments intelligently. But the two
>quotes above (and probably more) are appalling in their arrogance.
>It might be that M$ is correct on this point (i.e. that standing
>alone, refusing to allow distributors to make intermediate derivative
>works is not an unlawful monopolization of the relevant market), but
>any party that can make these arguments is, merely by making them,
>corroborating their original unlawful intent in abusing their market
>power. If this is how M$ conducted itself in court, its no reason
>Judge Jackson was so harsh in his findings.
>
>- mike oliver
>bowie & jensen, llc
--------------------------------------------------------------------------
POLITECH -- the moderated mailing list of politics and technology
To subscribe: send a message to [email protected] with this text:
subscribe politech
More information is at http://www.well.com/~declan/politech/ --------------------------------------------------------------------------
------- End of forwarded message -------
generated by msg2page 0.06 on Jul 21, 2006 at 19:05:20
search: