Ohio Northern University Law Review, Vol. 30, 2004
61 Pages Posted: 30 Aug 2004
In the era of digital delivery of content, copyright owners have turned with a vengeance to contract law to specify the rights and responsibilities of their customers. Many copyright owners today seek to avoid the express statutory limits on their rights contained in the Copyright Act by invoking the institution of contract. For example, these contracts attempt to prohibit the exercise of rights universally recognized as fair use, such as copying portions of a work for criticisms, product comparison and reverse engineering, or they seek to limit the application of the first sale doctrine. Enforcement of these contractual provisions alters the statutory scheme defined by Congress in the Copyright Act. This Article argues that the current legal doctrines available to invalidate these overreaching provisions or to strike claims asserted for their breach fail to provide appropriate incentives to reform contracting behavior by content owners. Even if, as a matter of contract law, a court would not enforce contractual terms that are inconsistent with the Copyright Act, the use of these provisions in ubiquitous shrinkwrap and clickwrap licenses has an in terrorem effect on users. After exploring the potential chilling effect that these overreaching clauses may have on users' behavior and why it is critical for courts to find ways to discourage the use of such clauses, this article argues that applying an appropriately tailored doctrine of copyright misuse to these licensing terms would provide a more robust reformation of contracting behavior.
Copyright misuse is an equitable defense based on a claim that the copyright owner has used the rights granted by the federal Copyright Act in a manner that is contrary to the public interest; this defense can be raised by an accused infringer that has not been affected by the alleged misuse. Recognizing a copyright misuse defense based on contract clauses that seek to avoid federal limitations on copyright rights has several advantages. First, an assertion of copyright misuse can be made in a case that does not involve a claim for breach of one of these clauses. Second, as an equitable doctrine, misuse is subject to interpretation and revision by the courts; no legislative action is necessary. Third, a successful misuse defense results in a refusal by the court to enforce the copyright until the misuse is "purged." Given the potential downside risk of contractual overreaching, a broader application of the misuse doctrine would, therefore, "chill" a copyright owner's impulse to overreach.
This article proposes that courts recognize a rebuttable presumption of misuse when a copyright owners seek, by contract, to avoid the express statutory limitations on their rights. To rebut the presumption of misuse, a copyright owner would be required to prove that encouraging the type of contracting behavior at issue is not likely to lead to a reduction of the external benefits the Copyright Act seeks to ensure through the limitation the copyright owner is contractually attempting to avoid. Requiring the copyright owner to rebut the presumption of misuse appropriately places the burden on the party that engaged in the presumption-triggering activity, i.e., the drafting or negotiation of the contract containing the offending clause. Employing a rebuttable presumption would allow contracting around the statutory limitations on a copyright owner's rights only on a limited and truly bargained-for basis.
Keywords: Copyright, misuse, contract, clickwrap, browsewrap, intellectual property
JEL Classification: K13, O34
Suggested Citation: Suggested Citation
Loren, Lydia Pallas, Slaying the Leather-Winged Demons in the Night: Reforming Copyright Owner Contracting with Clickwrap Misuse. Ohio Northern University Law Review, Vol. 30, 2004. Available at SSRN: https://ssrn.com/abstract=582402