CALIFORNIA LAW REVIER TVoL. 87: 111 insisting upon it by declaring the entire patent unenforceable. 3 But in any event, it is federal patent policy, not the contract term, that controls the transaction atent contracts can also run afoul of the doctrine of assignor estoppel Unlike licensee estoppel, which Lear prohibits, assignor estoppel prevents the original inventor and her company from challenging the validity of a patent issued on her own invention, and then assigned to the ultimate patent owner. 54 The Federal Circuit has held that inventors will be estopped from contesting the validity of their own patents as a matter of judicial policy. 55 This policy applies whether or not the inventor sought to reserve the right to challenge the patent when she entered into the assignment agreement 56 2. Copyright Law Copyright law contains a number of compromises between the desires of authors and those of the consuming public. It is therefore not surprising that ontracts written by a copyright owner often claim to give the licensor greater rights than are granted by copyright law. Similarly, contracts written by an assignee or licensee sometimes seek to take away rights that the copyright law grants exclusively to authors. Several examples follow of the,. First, some contracts provide that the licensee may not make any copies term conflicts directly with section 1 17 of the Copyright Act, which gives owners of a copy of a program the right to make both archival copies and copies necessary to run the program. 57 In some cases, the license term may also run afoul of the 53.This is the patent misuse doctrine, For a description of its scope, see Mark A. Lemle nent, The Economic Irrationality of the Patent Misuse Doctrine, 78 Calif. L. Rev. 1599, 1611-1 s4 See, e. g, Diamond Scientific Co v. Ambico, Inc, 848 F2d 1220, 1224(Fed. Cir. 1988) s5 See id at 1224-.26 estoppel as matters for determ 8(Newman, J, concurring) r13)是2hs2 iflsauthorliz eC pe ten a d mawer出33( aooo ro bd kanticoagngoprogo k into no one has been abletseeterseie as sas d osome peas h Cir. 1993)(tinding that section 117 does not apply to (baldies ot the whether defend bt under section 1 17 is determined by the economic hether it is characterized as a
CALIFORNIA LAW REVIEW [Vol. 87:111 insisting upon it by declaring the entire patent unenforceable.53 But in any event, it is federal patent policy, not the contract term, that controls the transaction. Patent contracts can also run afoul of the doctrine of assignor estoppel. Unlike licensee estoppel, which Lear prohibits, assignor estoppel prevents the original inventor and her company from challenging the validity of a patent issued on her own invention, and then assigned to the ultimate patent owner.54 The Federal Circuit has held that inventors will be estopped from contesting the validity of their own patents as a matter of judicial policy.55 This policy applies whether or not the inventor sought to reserve the right to challenge the patent when she entered into the assignment agreement.56 2. Copyright Law Copyright law contains a number of compromises between the desires of authors and those of the consuming public. It is therefore not surprising that contracts written by a copyright owner often claim to give the licensor greater rights than are granted by copyright law. Similarly, contracts written by an assignee or licensee sometimes seek to take away rights that the copyright law grants exclusively to authors. Several examples follow. First, some contracts provide that the licensee may not make any copies of the licensed work. If the copyrighted work is a computer program, such a license term conflicts directly with section 117 of the Copyright Act, which gives owners of a copy of a program the right to make both archival copies and copies necessary to run the program.57 In some cases, the license term may also run afoul of the 53 .This is the patent misuse doctrine. For a description of its scope, see Mark A. Lemley, Comment, The Economic Irrationality of the Patent Misuse Doctrine, 78 Calif. L. Rev. 1599, 1611-13 (1990). 54 .See, e.g., Diamond Scientific Co. v. Ambico, Inc., 848 F.2d 1220, 1224 (Fed. Cir. 1988). 55 .See id. at 1224-26. 56 .In Diamond Scientific , the court held that patent policy absolutely barred assignors from later contesting the validity of the patent they assigned. See id. By contrast, Judge Newman, concurring, objected to this public policy rationale, and would instead have treated both assignor and licensee estoppel as matters for determination by contract law. See id. at 1227-28 (Newman, J., concurring). 57 .17 U.S.C. § 117 (1994); see also Vault Corp. v. Quaid Software Ltd., 847 F.2d 255, 270 (5th Cir. 1988) (holding that section 117 authorized defendant to make a copy that was necessary to analyze and defeat a copyrighted “anticopying” program); Foresight Resources Corp. v. Pfortmiller, 719 F. Supp. 1006, 1009-10 (D. Kan. 1989); John Conley & Vance Brown, Revisiting § 117 of the Copyright Act: An Economic Approach, Computer L., Nov. 1990, at 1. The term “owners of a copy,” which snuck into section 117 for reasons no one has been able to determine, has caused some courts to focus on whether the user is really an “owner” or a “licensee.” See MAI Sys. Corp. v. Peak Computer, Inc., 991 F.2d 511, 519 n.5 (9th Cir. 1993) (finding that section 117 does not apply to software that is licensed, not sold, since the user of such software is not the “owner” of a copy, and concluding that the customer could not hire a third party to install or debug purchased program). But see DSC Communications Corp. v. Pulse Communications Inc., 976 F. Supp. 359, 362 (E.D. Va. 1997) (holding that whether defendant “owns” a copy under section 117 is determined by the economic realities of the transaction, not by whether it is characterized as a “license”)
1999 BEYOND PREEMPTION right to make"fair use"of the copyrighted work. 58 Indeed, it is not very hard to find contractual provisions that claim to preclude any copying by the user, whethe or not the copying would be fair use. 59 And one can certainly imagine copyright owners including "no-parody provisions in their licenses, if courts would enforce "contracting around " fair use thus presents a conflict with the goals of the o them. But fair use is designed precisely to allow nonconsensual uses, 6 doctrine 61 Second, many software contracts purport to prohibit reverse en the licensed software. 62 These terms may conflict with a user's apparent right Inder copyright law to reverse engineer copyrighted works for certain purposes.63 42 Repres See, e-g Peculiar Patents at iv (1994) ("No part of this book by a newspaper or magazine revie 品BE(:he图egH4 uses i. saction cos Wendy G gordon has suggested that fair use is best conceived as directed at"market failure."See AocurI-Rose music, Ino g10 U.S.69 ()anndine parody peotected by fair use). -8. camp 3出mm图p see andrew Johnson-Laird, Sofhvare Reverse Engineering in the Real world, 19 U. Dayton L. Rev. 843(1994) 8 Comp. v Quaid softwared 被器8c 6 2名KRa62 Jr.ocEconomicaryy是8m Computer Software: Reverse Enginee Protection and Disclo
1999] BEYOND PREEMPTION right to make “fair use” of the copyrighted work.58 Indeed, it is not very hard to find contractual provisions that claim to preclude any copying by the user, whether or not the copying would be fair use.59 And one can certainly imagine copyright owners including “no-parody” provisions in their licenses, if courts would enforce them. But fair use is designed precisely to allow nonconsensual uses,60 and “contracting around” fair use thus presents a conflict with the goals of the doctrine.61 Second, many software contracts purport to prohibit reverse engineering of the licensed software.62 These terms may conflict with a user’s apparent right under copyright law to reverse engineer copyrighted works for certain purposes.63 58 .See 17 U.S.C. § 107 (1994). “Fair use” is an amorphous concept, so generalizations are difficult. But possible fair use copies of computer programs may include: (1) reverse engineering the work in order to view and use uncopyrighted elements, see infra note ; (2) copying a program into RAM memory in order to use it; (3) copying part or all of the work for the purpose of instruction in a computer science class; (4) copying part or all of the work for the purpose of academic research; and (5) working copies of portions of electronic or print instruction manuals. For a discussion of the possibility of contracting out of fair use, see Jane C. Ginsburg, Copyright Without Walls?: Speculations on Literary Property in the Library of the Future, 42 Representations 53, 61-66 (1993). 59 .See, e.g., Rick Feinberg, Peculiar Patents at iv (1994) (“No part of this book may be reproduced in any form, except by a newspaper or magazine reviewer who wishes to quote brief passages in connection with a review.”). 60 .See, e.g., William W. Fisher III, Reconstructing the Fair Use Doctrine , 101 Harv. L. Rev. 1659, 1687 (1988); Gideon Parchomovsky, Fair Use, Efficiency, and Corrective Justice , 3 Legal Theory 347, 359-60 (1997); cf. Merges, supra note , at 1610 (suggesting that as transaction costs disappear, the primary role for fair use will be to privilege certain nonconsensual uses). Wendy Gordon has suggested that fair use is best conceived as directed at “market failure.” See Wendy J. Gordon, Fair Use As Market Failure: A Structural and Economic Analysis of the Betamax Case and Its Predecessors, 82 Colum. L. Rev. 1600 (1982). If market failure is construed broadly enough to encompass situations in which socially efficient licensing does not occur, I agree. See Lemley, Economics of Improvement, supra note , at 1077-83. But it seems obvious that fair use must offer users something more than simply the “implied consent” of the copyright owner in circumstances in which it is not worth the cost to bargain over a license. Were that all that the fair use doctrine protected, it would not cover true “nonconsensual” uses. But it does. See, e.g., Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994) (finding parody protected by fair use). 61 .See Neil Weinstock Netanel, Copyright and a Democratic Civil Society, 106 Yale L.J. 283, 362 (1996) (“Th[e] imposition of limits [on copyright] must be seen as a vital and integral part of copyright’s structural function.”). 62 .Reverse engineering of software—also called “decompilation”—involves working backwards from object code to produce a simulacrum of the original source code. See Andrew Johnson-Laird, Software Reverse Engineering in the Real World, 19 U. Dayton L. Rev. 843 (1994). 63 .Virtually all recent courts, as well as most commentators, have endorsed reverse engineering in some circumstances, particularly when necessary to achieve interoperability. See, e.g., DSC Communications Corp. v. DGI Techs., Inc., 81 F.3d 597, 601 (5th Cir. 1996); Bateman v. Mnemonics, Inc., 79 F.3d 1532, 1539 n.18 (11th Cir. 1995); Lotus Dev. Corp. v. Borland Int’l, Inc., 49 F.3d 807, 817-18 (1st Cir. 1995); Sega Enterprises Inc. v. Accolade, Inc., 977 F.2d 1510, 1527-28 (9th Cir. 1992); Atari Games Corp. v. Nintendo of Am. Inc., 975 F.2d 832, 843-44 (Fed. Cir. 1992); Vault Corp. v. Quaid Software Ltd., 847 F.2d 255, 270 (5th Cir. 1988); DSC Communications Corp. v. Pulse Communications Inc., 976 F. Supp. 359, 364 (E.D. Va. 1997); Mitel, Inc. v. Iqtel, Inc., 896 F. Supp. 1050, 1056-57 (D. Colo. 1995), aff’d on other grounds, 124 F.3d 1366 (10th Cir. 1997); Jonathan Band & Masanobu Katoh, Interfaces on Trial (1995); Julie E. Cohen, Reverse Engineering and the Rise of Electronic Vigilantism: Intellectual Property Implications of “Lock-Out” Programs, 68 S. Cal. L. Rev. 1091 (1995); Lawrence D. Graham & Richard O. Zerbe, Jr., Economically Efficient Treatment of Computer Software: Reverse Engineering, Protection, and Disclosure, 22 Rutgers Computer & Tech. L.J. 61 (1996); Dennis S. Karjala, Copyright Protection of Computer Programs, Reverse Engineering, and Professor Miller, 19 U. Dayton L. Rev. 975, 1016-18 (1994); Maureen A. O’Rourke, Drawing the
CALIFORNIA LAW REVIER TVol. 87: 111 This is perhaps the most common example in the software industry of a conflict between contractual terms and copyright policy Third, software and digital information contract terms often seek to prohibit the licensee from moving a program to an upgraded computer or from the right to copy and adapt the program to the extent necessary to run i s usen ce altering, upgrading, or"debugging" the program. Such requirements may conflic with at least the spirit, and arguably the letter, of section 117, which give particular machine. 64 In particular, section 1 17 was intended to give users the right to upgrade programs themselves, 65 and to transfer software programs to newer code 66 Fourth, contract terms commonly prohibit licensees from transferring or Duke l j (1995); David A. Rice, Sega 1 Beacon for Fair Use Analysis..Ar 18已mg43m工R iso anthony L sotmtparer'-Generured works: s amping New since coNTuS 106 harv, r. Re 77a993 sa) Generator's Dilemma. 12 J. Marshall Cat Bonle n Cberaporeive Htew,et d 63o575Works.g,& Mareartnchrsh iNe,s or burgen 32sn. 649(1994); Carol G. Stovsky, Note, MAI S siste nCs h peang menu 4. 粥好m meration in Network Environments. 33 Jurimetrics
CALIFORNIA LAW REVIEW [Vol. 87:111 This is perhaps the most common example in the software industry of a conflict between contractual terms and copyright policy. Third, software and digital information contract terms often seek to prohibit the licensee from moving a program to an upgraded computer or from altering, upgrading, or “debugging” the program. Such requirements may conflict with at least the spirit, and arguably the letter, of section 117, which gives users the right to copy and adapt the program to the extent necessary to run it on a particular machine.64 In particular, section 117 was intended to give users the right to upgrade programs themselves,65 and to transfer software programs to newer hardware or operating systems, even if the transfer requires translation of the code.66 Fourth, contract terms commonly prohibit licensees from transferring or Boundary Between Copyright and Contract: Copyright Preemption of Software License Terms, 45 Duke L.J. 479, 534 (1995); David A. Rice, Sega and Beyond: A Beacon for Fair Use Analysis . . . At Least As Far As It Goes, 19 U. Dayton L. Rev. 1131, 1168 (1994); Pamela Samuelson, Fair Use for Computer Programs and Other Copyrightable Works in Digital Form: The Implications of Sony, Galoob and Sega, 1 J. Intell. Prop. L. 49 (1993); Timothy S. Teter, Note, Merger and the Machines: An Analysis of the Pro-Compatibility Trend in Computer Software Copyright Cases, 45 Stan. L. Rev. 1061 (1993) (arguing that the value of computer programs depends on interoperability). On the other hand, a few early decisions rejected interoperability as a justification for copying. See Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240, 1253 (3d Cir. 1983); Digital Communications Assoc., Inc. v. Softklone Distrib. Corp., 659 F. Supp. 449, 462 (N.D. Ga. 1987); see also Anthony L. Clapes, Confessions of an Amicus Curiae: Technophobia, Law, and Creativity in the Digital Arts, 19 U. Dayton L. Rev. 903 (1994) (contending that there is no right to reverse engineer software); Arthur R. Miller, Copyright Protection for Computer Programs, Databases, and Computer-Generated Works: Is Anything New Since CONTU?, 106 Harv. L. Rev. 977 (1993) (same). 64 .See 17 U.S.C. § 117 (1994). The right to adapt software has been the subject of numerous and conflicting court decisions. See generally Marvin N. Bean & Richard J. Superfine, § 117—The Right to Adapt into the Fourth Generation and the Source Code Generator’s Dilemma, 12 J. Marshall J. Computer & Info. L. 537 (1994) (discussing section 117 caselaw). Some courts have held that because of the nature of computer technology, using a program on a modern computer network necessarily makes several copies of that program. See, e.g., MAI Sys. Corp. v. Peak Computer, Inc., 991 F.2d 511, 518 (9th Cir. 1993). For criticism of MAI, see Fred H. Cate, Law in Cyberspace , 39 How. L.J. 565, 575-77 (1996); Margaret Chon, New Wine Bursting from Old Bottles: Collaborative Internet Art, Joint Works, and Entrepreneurship, 75 Or. L. Rev. 257, 260-61 (1996); Niva Elkin-Koren, Copyright Law and Social Dialogue on the Information Superhighway: The Case Against Copyright Liability of Bulletin Board Operators, 13 Cardozo Arts & Ent. L.J. 345, 381-82 (1995); Lemley, Overlapping Copyrights, supra note , at 550-552; Jessica Litman, The Exclusive Right to Read, 13 Cardozo Arts & Ent. L.J. 29, 41-43 (1994); Litman, supra note , at 21; James V. Mahon, A Commentary on Proposals for Copyright Protection on the National Information Infrastructure, 22 Rutgers Computer & Tech. L.J. 233, 240-45 (1996); James A.D. White, Misuse or Fair Use? That Is the Software Copyright Question, 12 Berkeley Tech. L.J. 251, 302-05 (1997); Barbara Cohen, Note, A Proposed Regime for Copyright Protection on the Internet, 22 Brook. J. Int’l L. 401, 412 (1996); Michael E. Johnson, Note, The Uncertain Future of Computer Software Users’ Rights in the Aftermath of MAI Systems, 44 Duke L.J. 327 (1994); Katrine Levin, Note, MAI v. Peak: Should Loading Operating System Software into RAM Constitute Copyright Infringement? 24 Golden Gate U. L. Rev. 649 (1994); Carol G. Stovsky, Note, MAI Systems Corp. v. Peak Computer, Inc.: Using Copyright Law to Prohibit Unauthorized Use of Computer Software , 56 Ohio St. L.J. 593 (1995). Copyright law places strict limitations on a purchaser’s right to use a program in a networked environment. See Lemley, Overlapping Copyrights, supra note , at 550-67. Because of this, most medium-sized and large corporations have begun purchasing “site-licenses” from software vendors. See Thomas M.S. Hemnes, Software Revenue Generation in Network Environments, 33 Jurimetrics J. 377, 381 (1993) (“Site licenses are understandably popular . . . .”). 65 .See Aymes v. Bonnelli, 47 F.3d 23, 26 (2d Cir. 1995); Final Report of the Commission on New Technological Uses of Copyrighted Works 25 (1978) [hereinafter CONTU Report]. 66 .See CONTU Report, supra note , at 25 (“[A] right to make those changes necessary to enable the use for which [the software] was both sold and purchased should be provided. The conversion of a program from one higher-level language to another to facilitate use would fall within this right.”)
1999 BEYOND PREEMPTION assigning their particular copy of a work. Such provisions may conflict with the first sale" doctrine in copyright law, which gives the owner of a particular copy of a copyrighted work the right to dispose of that copy without the permission of the copyright owner. 67 Whether this is actually a conflict depends on whether the copyright owner"sold"or"licensed"the copy in question; the first sale doctrine does not prevent restrictions on the transfer of licensed items. 68 Fifth, contractual provisions may seek to prevent the user of a copyrighted work from performing or displaying the program to the public under any circumstances. 69 Such a license provision would conflict with section 110 of the Copyright Act, which expressly immunizes certain performances. /0 Similarly, limitations on certain uses of some types of works may run afoul of other specific exceptions in the Copyright Act, such as the right of libraries to make certain copies, 7I the right of cable and satellite systems to engage in secondary transmission and simultaneous copying subject to compulsory licenses, 72 the rights to make photographic reproductions of some types of copyrighted works without authorization, 73 and the right to play music in jukeboxes subject to an arbitrated compulsory license. 74 Sixth, copyright owners are granted certain rights that they cannot waive assign, or license. Most notable here is the right of authors to terminate transfers of This right is effective "notwithstanding any agreement to the contrary. 7 ated.75 rights in the work between thirty-five and forty years after the work was cr Similarly, the limited moral rights of a visual artist may not be transferred by the use onlymald not for preble performance store commonly provide that they are licensed for aritable Performances).)(offering limited protections for educational, religious, agricultural, 71eeid.§108 72 See generally id. s8 111, 112, 119(setting out the provisions of the cable and satellite 73 See id sS 113(c)(useful articles), 120(architectural works) 74 See id§ll6. 75 See id$ 203(a)3); see also id 8 304(c)(3)(providing a similar right for older works) ld.§§203(a)(5),304(c)(5)
1999] BEYOND PREEMPTION assigning their particular copy of a work. Such provisions may conflict with the “first sale” doctrine in copyright law, which gives the owner of a particular copy of a copyrighted work the right to dispose of that copy without the permission of the copyright owner.67 Whether this is actually a conflict depends on whether the copyright owner “sold” or “licensed” the copy in question; the first sale doctrine does not prevent restrictions on the transfer of licensed items.68 Fifth, contractual provisions may seek to prevent the user of a copyrighted work from performing or displaying the program to the public under any circumstances.69 Such a license provision would conflict with section 110 of the Copyright Act, which expressly immunizes certain performances.70 Similarly, limitations on certain uses of some types of works may run afoul of other specific exceptions in the Copyright Act, such as the right of libraries to make certain copies,71 the right of cable and satellite systems to engage in secondary transmission and simultaneous copying subject to compulsory licenses,72 the rights to make photographic reproductions of some types of copyrighted works without authorization,73 and the right to play music in jukeboxes subject to an arbitrated compulsory license.74 Sixth, copyright owners are granted certain rights that they cannot waive, assign, or license. Most notable here is the right of authors to terminate transfers of rights in the work between thirty-five and forty years after the work was created.75 This right is effective “notwithstanding any agreement to the contrary.”76 Similarly, the limited moral rights of a visual artist may not be transferred by the 67 .See 17 U.S.C. § 109(a) (1994). Section 109(b)(1)(A) contains an exception prohibiting the purchasers of computer software from renting that software for profit, but does allow purchasers to sell the copy or give it away. Id. § 109(b)(1)(A). 68 .See H.R. 94-1476, 94th Cong. (1976) (providing that the parties may contract around the first sale doctrine in 17 U.S.C. § 109(a), but limiting the copyright owner to contract rather than copyright remedies if they do so). 69 .For example, movies rented by a video store commonly provide that they are “licensed for home use only” and not for public performance. 70 .17 U.S.C. § 110 (1994) (offering limited protections for educational, religious, agricultural, and charitable performances). 71 .See id. § 108. 72 .See generally id. §§ 111, 112, 119 (setting out the provisions of the cable and satellite compulsory licenses). 73 .See id. §§ 113(c) (useful articles), 120 (architectural works). 74 .See id. § 116. 75 .See id. § 203(a)(3); see also id. § 304(c)(3) (providing a similar right for older works). 76 .Id. §§ 203(a)(5), 304(c)(5)