Lasercomb Am., Inc. v. Reynolds - 911 F.2d 970 (4th Cir. 1990)

Rule:

So while it is true that the attempted use of a copyright to violate antitrust law probably would give rise to a misuse of copyright defense, the converse is not necessarily true -- a misuse need not be a violation of antitrust law in order to comprise an equitable defense to an infringement action. The question is not whether the copyright is being used in a manner violative of antitrust law (such as whether the licensing agreement is reasonable), but whether the copyright is being used in a manner violative of the public policy embodied in the grant of a copyright.

Facts:

Appellee Lasercomb America, Inc. developed a computer software program that was the subject of the dispute between the parties. Appellants Larry Holliday and Job Reynolds circumvented the protective devices Lasercomb had provided with the software and made three unauthorized copies of the software. Thereafter, Holliday and Reynolds created and marketed its own software program, which was almost a direct copy of Lasercomb’s program. Lasercomb filed this action claiming copyright infringement and fraud based on appellants' unauthorized copying and marketing of Lasercomb’s software. 

Issue:

Were Holliday and Reynolds liable for copyright infringement?

Answer:

No.

Conclusion:

The court held that Holliday and Reynolds were not liable for copyright infringement because Lasercomb misused its copyright by attempting to use its copyright to control competition in an area outside the copyright. However, the court found that Holliday and Reynolds were still liable for fraud.