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Re: Did I finally figure out the rationale?

From: Alexander Terekhov
Subject: Re: Did I finally figure out the rationale?
Date: Sat, 26 May 2007 22:48:07 +0200

mike3 wrote:
> Now, is this right?

Nope. 17 USC 109 and 117 (in the EU it's the same). And IP licenses 
are contracts.

While a party that owns copyright rights is ordinarily entitled to pursue 
infringement claims against any third party who violates them, the courts 
have recognized that the rights and remedies available to copyright 
holders change significantly when the owner elects to give others a 
nonexclusive license to use such property. In that situation, the 
owner/user relationship is fundamentally different. Absent a license, the 
rights of the copyright holder are governed by statutory and common 
law rules applicable to such rights. With a license, however, the terms 
and covenants of the license establish the applicable rules. See 
Effects Associates, Inc. v. Cohen, 908 F.2d 555, 559 (9th Cir. 1990) 
(in granting a copyright license, the licensor gives up its right to sue 
the licensee for infringement). 

Recognizing that the existence of consensual licensing arrangements 
significantly changes the applicable rules and the expectations of the 
parties, federal courts have held that a party cannot normally pursue a 
copyright infringement action based upon the licensees breach of 
covenants in the license agreement. As a general rule, " if the 
[licensees] improper conduct constitutes a breach of a covenant 
undertaken by the licensee . . . and if such covenant constitutes an 
enforceable contractual obligation, then the licensor will have the 
cause of action for contract," not for copyright infringement. Graham 
v. James , 144 F.3d 229, 236-37 (2d Cir. 1998) quoting 3 Melville B. 
Nimmer & David Nimmer, Nimmer on Copyright, 10.15[A] at 10-120 
(1998); see also Kolbe v. Trudel , 945 F. Supp. 1268, 1270-71 
(D. Ariz. 1996). As the Ninth Circuit explained in Topolos v. Caldewey, 
698 F.2d 991, 993 (9th Cir. 1983): 

[A] case does not arise under the federal copyright laws . . . merely 
because the subject matter of the action involves or affects a copyright. 


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