On 2/21/97, John Enser <JXE[_at_]olswang.co.uk> wrote:
>
> As a European following the pre-emption debate at a distance, I hope
> this is not too far off beam, but what is the anti-trust consequence
> of a contract claim which, as in the ProCD case pre-empts the
> post-Feist copyright position? Is an assertion of pre-emption
> capable of being anti-competitive?
The answer is, in theory, yes. Certainly there are cases holding that attempts to extend patent rights via contract constitute an antitrust violation.
In practice, however, I am skeptical about the extent to which a copyright can be used to leverage anticompetitive behavior. First, independent creation is a defense to copyright infringement -- consequently, as in trade secrecy, there is a natural limit on the royalty (or restrictions) a copyright holder can demand -- i.e., if it is cheaper to independely re-create the work than to pay the royalty, the prospective licensee will do the former -- so the copyright holder can charge no more than it independent creation would cost (either in money or opportunity costs).
Second, the copyright holder's ability to gain market power will be limited by the price elasticity of demand, which is to say, the availablity of substitutes. For most copyrighted works, there will be plenty of readily available substitutes, because only expression is protected, not the underlying idea or facts -- for most copyrightable works, there will be myriad means of alternative expression. Hence, lots of substitutes. Hence, the ability to charge monopoly royalties is again restricted.
(And if there *aren't* lots of available alternative means of expression, then we have merger, and the work isn't copyrightable anyway).
Your suggestion is intriguing, however, because one might envision situations where the *contract* rather than the copyright becomes the problem. What might happen is that *if* we think a ProCD type contract is enforceable -- and I don't, Easterbrook's analysis notwithstanding -- then the combination of copyright exclusive rights and contract rights could turn a copyright that *wasn't* anticompetitive into something that is. In which case, I suppose the contract is void as against public policy, and Easterbrook is wrong again. :)
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