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Contract Prohibiting Reverse Engineering not Preem
posted by macgill on Friday August 30, @12:56PM
from the you-thought-copyright-might-save-you? dept.
News The Federal Circuit Court of Appeals has agreed with the ProCD v. Zeidenburg line of cases holding that contracts are not limited by copyright law. In Bowers v. Baystate the court considered a shrink wrap agreement purporting to prevent reverse engineering and disagreed with the lower court's instruction that copyright law limited the contract.

Also, two items of interest re: reverse engineering.

  • The court seems to assume that "reverse engineering" is not prohibited by copyright. This may not have been conscious and is clearly not part of the holding, but it echos the thoughts of many commentators and litigants. The case law makes it pretty clear that this is not the case. Sony v. Connectix and Sega v. Accolade stand for the proposition that "reverse engineering" may be a fair use depending on the facts of an individual case but reverse engineering is not an independent defense to copyright infringement.
  • The court sets a fairly low bar for what would constitute "reverse engineering" under the contract.
Worth a read.

UPDATE by macgill: As doogieh helpfully points out, it is the Federal Circuit not the First Circuit (as I originally wrote) that so held. Sometimes my eyes malfunction.

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    Contract Prohibiting Reverse Engineering not Preem | Login/Create an Account | Top | 2 comments | Search Discussion
    Threshold:
    The Fine Print: The following comments are owned by whoever posted them. We are not responsible for them in any way.
    Its the Federal Circuit, not the First Circuit (Score:3, Insightful)
    by doogieh on Friday August 30, @01:56PM (#263)
    User #118 Info
    It is the FEDERAL CIRCUIT, the court of appeals with jurisdiction over all cases arising under the patent laws, that made this decision.

    Its hardly surprising that the Fed. Cir. would make this decision, as it has recently greatly expanded its role in the contract realm. Recently, in Hallmark, the Fed Cir stated that patent "on sale bars" would be judged by a -federal common law of contract- based on the UCC (you read that right).

    It has sometimes ignored the basic economic ramifications of ettending IP rights beyong their statutory basis. In a direct conflict with the 9th circuit (at least until Vornado changed the game a little) the Fed Cir has essentially said there is no such thing as patent antitrust unless there was walker process fraud on or objective/subjective bad faith. Market power be d*mned.

    The market power issue is IMHO what the whole ProCD line leaves most uncertain. Specifically, w/r/t copyright, if a EULA by a large copyright holder with admitted market power requires sacrifice of substantial rights above and beyond those granted a copyright holder under title 17, when does it become -copyright misuse-? (PMC, Lasercomb) Can the copyright holder bar me from using any competing software? Bar me from using GNU software? Force me to give a non-exclusive license for everything I write with their software? Can they force me to accept their DRM and then bar me from creating any new works without their authorization and assignment (under penalty of DMCA access controls, for instance.)

    I guess the answer is yes, given the sacred power of a contract, even if the result of incredible market power by one party.
    Once Again 17 USC 117 is Ignored (Score:4, Insightful)
    by bwtaylor on Tuesday September 03, @09:33AM (#270)
    User #184 Info
    A state law is preempted by the Copyright Act unless there is an "extra element" that results in the state law regulating something different than what copyright normally covers.

    In this case, like ProCD, the Court found that a contract, which involves two parties agreeing to be governed by the terms of a contract, is such an extra element. This would normally be true, unless the contract in question is itself lacking of an extra element outside the scope of Copyright. After all, copyright inherently covers the contract of sale of copies of a copyrighted work. In particular, 17 USC 117 states that the owner of a copy of software has the right to copy or adapt that software for use on a machine. I fail to see what the purported contract in this case offers the purchaser that is not already inherently transfered at first sale: namely the right to install the software. Adhesive terms to the contract of sale that do nothing else besides limit first sale rights have been rejected for nearly a full century since Bobbs-Merrill v Straus.

    For a contract to be an "extra element", all the elements of that contract should truly be extra. This would require consideration and negotiation separate from that inherently governed by the Copyright Act during the trasaction that forms first sale.

    "By opening this book you agree to not make fair use or exercise first sale rights" is not an extra element. If it was, Bobbs-Merrill would have gone the other way.

    Humanity has the stars in its future, and that future is too important to be lost under the burden of juvenile folly and ignorant superstition. - Isaac Asimov

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