Distribution, Competition, and Antitrust / IP Law

Getty Images Complains About Google’s Image “Scraping”

Getty Images and a group of professional photographers sent a letter this week to the Senate Judiciary’s antitrust subcommittee complaining about Google’s image “scraping.”  In a nutshell, Getty alleges that high-resolution images in Google’s image search results end up being the final destination for searchers, not a conduit that carries searchers to the image source (e.g., Getty).  As a result, Getty alleges, Google profits from search data while diminishing compensation to the websites that actually own the image rights.

The FTC previously investigated Google for scraping.  The FTC staff recommended that the full commission bring antitrust charges against Google for scraping and other practices.  (That recommendation was accidentally made public.)  The FTC, however, closed its investigation into Google’s search practices, and in 2012 Google issued a letter promising to create an online tool that would allow websites to opt out of having their scraped content displayed in search results on Google.  Getty maintains that the opt-out mechanism presents image rights owners with the Hobson’s choice of agreeing to scraping or becoming “invisible” online by opting out of Google’s search results.

The fact that Getty is attempting to leverage government intervention is interesting.  Does it not think it has antitrust standing itself to complain?  It does not seem to be a competitor or a customer of Google.

Is Copyright Misuse the Snipe of IP Law?

Copyright

The snipe is an actual type of bird, but if you’ve seen the Pixar movie “Up,” you’re familiar with the snipe as a mythical bird that is the object of a fool’s errand.

In this post, we take a detour from patent and competition law and consider whether copyrights can be misused in an anti-competitive way, and if so, how.

Copyright holders need not license their works at all. See 17 U.S.C. § 106. When they do license, they have broad rights to license as they wish. See, e.g., UMG Recordings, Inc. v. MP3.com, Inc., 92 F. Supp. 2d 349, 352 (S.D.N.Y. 2000) (copyright holders can, within broad limits, curb the development of a derivative market by refusing to license a copyrighted work or by doing so only on limited terms); see also Wall Data Inc. v. Los Angeles County Sheriff’s Dep’t., 447 F.3d 769 (9th Cir. 2006) (strictly enforcing per-computer license for software).

Indeed, while copyright owners may choose to simply exclude others from their work, i.e. not to transfer their rights, courts have long-held that copyright holders may also use their limited monopoly to leverage the right to use their work on the acceptance of specific conditions. See Apple, Inc. v. Psystar Corp., 658 F.3d 1150, 1159 (9th Cir. 2011), petition for cert. filed, Dec. 27, 2011 (citing Metro-Goldwyn-Mayer Distrib. Corp. v. Bijou Theatre Co., 59 F.2d 70, 77 (1st Cir. 1932) (if motion picture license is subject to condition that its exhibition must occur at specified times and places, licensee’s exhibition at other times and places constitutes infringement)).

So, as an example, a software licensing agreement “may reasonably restrict the use of the software as long as it does not prevent the development of competing products.” Psystar, 658 F.3d at 1159. The Ninth Circuit interprets the phrase “prevent the development” of competing products quite literally. In only one case (Practice Mgmt. Info Corp. v. American Med. Ass’n, 121 F.3d 516 (9th Cir. 1997), amended, 133 F.3d 1140 (9th Cir. 1998), cert. denied, 524 U.S. 952 (1998)), has it upheld a copyright misuse defense – where the copyright licensor actually contractually prevented the licensee from using any other competing product. See Psystar, 658 F.3d at 1157.

So anti-competitive copyright misuse is not exactly the mythical snipe.  It can in theory exist, but it is probably rare and confined to a very narrow habitat (contractual exclusive dealing).  I suggest that it also may make little sense to apply the doctrine unless the defendant has some sort of relevant market power.  Market power screens are used for tying and exclusive dealing claims generally, and in connection with patent claims in particular.  Why would courts relax the screen because copyrights — whose use, at least generally speaking, has fewer potential anti-competitive effects than patents — are involved?

Optimization WordPress Plugins & Solutions by W3 EDGE
%d bloggers like this: