us department of justice antitrust case brief - 00728-2076

8/14/2019 US Department of Justice Antitrust Case Brief - 00728-2076

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No. 97-1254

I n the S upreme Court of the U nited S tatesOCTOBER TE R M , 1997

P RACTICE MANAGEMENT I NFORMATION COR P .,PETITIONER

v .

AMERICAN MEDICAL ASSOCIATION

ON PETITION FOR A WRIT OF CERTIORA RI TO THE UN ITED STATE S COURT OF APPEA LS

FOR THE NIN TH CIRCUIT

BRIEF FOR THE UNITED STATESAS AMICUS CURIAE

SE TH P. WAXMANSolicitor GeneralCoun sel of R ecord

F RANK W. H U N G E RJ OE L I . K L E I N

Assistant A ttorneys General

LAWRENCE G. WALLACEDeputy Solicitor General

J AMES A. F E L D M A N As sistan t to the SolicitorGeneral

ANTHONY J . ST E I N M E Y E RAL F R E D MOLLINJ OHN C. H OYLEDAVID SEIDMANAttorneys

Department of JusticeWashington, D.C. 20530-0001(202) 514-2217


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QUESTIONS PRESENTED

1. Whether an authors copyright in a referencework that uses codes to identify physicians proce-dures is terminated when the government requires

the copyrighted codes to be used in requests forreimbursement under government programs.

2. Whether a book of codes identifying phy sicians procedures becomes an uncopyrightable systemwhen the government requires its use in federalprograms.


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TABLE OF CONTENTS

Page

Statement . . .. .. .. .. .. . .. .. .. .. . .. .. .. .. . .. .. .. .. . .. .. .. .. . .. .. .. .. . .. .. .. .. . .. . 1

Discussion ........ . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . .. . . .. . .. . .. . . .. . .. . . .. . 5

Conclusion ........ . .. . . .. . .. . . .. . .. . .. . . .. . .. . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. 20

TABLE OF AUTHORITIES

Cases:

Allied T ube & Condu it Corp. v. Indian Head, Inc.,

486 U.S. 492 (1988) .................................................. 18

Am erican Dental A ssn v. Delta Dental P lans A ssn,

126 F .3d 977 (7t h Cir. 1997) ... ..... ...... ...... ..... ...... .. 12, 13

Apple Computer, Inc. v. Microsoft Corp., 35 F .3d

1435 (9th Cir. 1994), cert. denied, 513 U.S. 1184

(1995) .. ....................................................... ............. 15

Baker v. Selden, 101 U.S. 99 (1880) ........................ 12

Banks v. Manchester, 128 U.S. 244 (1888) .............. 6, 7

Bellsou th A dver. & Publg Corp. v. Donnelly Info.

Publg, Inc., 933 F.2d 952 (11th Cir . 1991), rev d on

othe r g rounds, 999 F .2d 1436 (11t h Cir. 1993) ...... ... 17

Broadcast Mu sic, In c. v. Columbia Broadcasting

System, 441 U.S. 1 (1979) ....................................... 16

Building Officials & Code A dm in. v. Code Tech, Inc.

628 F .2d 730 (1st Cir. 1980) ...... ...... ..... ...... ..... ... 9, 10, 11

Burgess v. Salmon, 97 U.S. 381 (1888) ................... 11

Carpenter v. Pennsylvania, 58 U.S. (17 How.) 456

(1854) .. ........................................................ ............ 11

CCC I nfo. Servs., In c. v. Maclean Hunter Mkt. Reports, In c., 44 F .3d 61 (2d Cir . 1994), cert .

denied, 516 U.S. 817 (1995) ..................................... 9

Comm un ity for Creative N on-Violence v. Reid,

480 U.S. 730 (1989) .................................................. 7

Compu ter A ssoc. In tl, In c. v. Altai, Inc., 982

F .2d 693 (2nd Cir. 1992) ........................................ .. 14


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IV

CasesContinued: Page

Data General Corp. v. Grumman Sys. Support

Corp., 36 F .3d 1147 (1st Cir. 1994) .... ...... ..... ...... .... 16

DSC Communications Corp. v. DGI Techs. Inc.,

81 F .3d 597 (5th Cir. 1996) ......... ...... ..... ...... ...... ..... . 16

Eastern R.R. Presidents Conference v. Noerr

Motor Freight, Inc., 365 U.S. 127 (1961) ................ 18

Edward B. Marks Music Corp. v. Colorado Mag-

netics, Inc., 497 F .2d 285 (1974), cert . den ied, 419

U.S. 1120 (1975) ................................................... ... 17

FTC v. Superior Court Trial Lawyers Assn, 493

U.S. 411 (1990) ........................................... ............. 18

Feist P ublications, I nc. v. Ru ral T el. Serv. Co.,

499 U.S. 340 (1991) .................................................. 12

Grayned v. City of R ockford, 408 U.S. 104 (1972) ... 11

Greenwood Utils. Com m n v. Mississippi Power Co.,751 F .2d 1484 (1985) ...... ..... ...... ..... ..... ...... ..... ...... .... 19

Lasercom b A m erica, Inc. v. Reynolds, 911 F .2d

970 (4th Cir. 1990) ..................... .............................. 16

M. Witmark & Sons v. Jensen, 80 F . Supp. 843

(D. Minn.), appea l dismissed, 177 F .2d 515

(8th Cir. 1948) ......................................................... 16

Maryland v. Baltimore Radio Show, 338 U.S. 912

(1950) ................................................. ................... 16-17

Reed-Union Corp. v. Turtle Wax, Inc., 77 F .3d 909

(7th Cir. 1996) ......................................................... 16

Saturday Evening Post Co. v. Rumbleseat Press,

Inc., 816 F .2d 1191 (7th Cir. 1987) ... ..... ..... ...... ..... . 17Toro Co. v. R & R Prods. Co., 787 F .2d 1208 (8th

Cir. 1986) ........................ ..................................... 12, 15

Un ited Min e Workers v. Pennington,

381 U.S. 657 (1965) .................................................. 18


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V

CasesContinued: Page

United Tel. Co. v. Johnson , 855 F .2d 604 (8th Cir.

1988) ................................................. ...................... 17

Warren Publg Inc. v. Microdos Data Corp.,

115 F .3d 1509 (11th Cir .), cer t. denied, 118 S. Ct.

397 (1997) ................................................... ............. 12

Wheaton v. Peters, 33 U.S. (8 Pet.) 591 (1834) ........ 6

Statutes and regulations:

17 U.S.C. 102(b) ........................................... 11, 12, 13, 14

17 U.S.C. 105 . . .. .. .. .. . .. .. .. .. . .. .. .. .. .. . .. .. .. .. . .. .. .. .. . .. .. .. .. . .. . 7

17 U.S.C. 106(2) ........ . .. . .. . . .. . .. . .. . . .. . .. . .. . . .. . .. . .. . . .. . .. . . .. . . 9

42 U.S.C. 1320d-2(c)(1) (Supp. I I 1996) . . . .. .. .. . .. .. .. .. . .. . 2

42 U.S.C. 1395w-4(c)(5) ........ . .. . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. 2

Cal. Code Regs. Tit . 1, 20(e) (1994) . . .. .. .. .. .. . .. .. .. .. . .. . 3

Cal. Code Regs. Tit . 22, 51050 (1994) .. .. .. .. .. . .. .. .. .. . .. . 3

Miscellaneous:

42 Fed. Reg. 13,262 (1977) . . . .. .. .. . .. .. .. .. . .. .. .. .. .. . .. .. .. .. . .. 2

58 Fe d. R eg. (1993):

p. 57,643 . .. .. .. . .. .. .. .. . .. .. .. .. . .. .. .. .. . .. .. .. .. . .. .. .. .. .. . .. .. .. .. . 2

p. 57,645 . .. .. .. . .. .. .. .. . .. .. .. .. . .. .. .. .. . .. .. .. .. . .. .. .. .. .. . .. .. .. .. . 2

H.R. Rep. No. 1476, 94th Cong., 2d Sess. (1976) ...... 7, 12

S. Rep. No. 473, 94th Cong., 1st Sess. (1975) ........ .. . . .. 12


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I n the S upreme Court of the U nited S tatesOCTOBER TE R M , 1997

No. 97-1254

P RACTICE MANAGEMENT I NFORMATION COR P .,PETITIONER

v .

AMERICAN MEDICAL ASSOCIATION

ON PETITION FOR A WRIT OF CERTIORA RI TO THE UN ITED STATE S COURT OF APPEA LS

FOR THE NIN TH CIRCUIT

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE

This brief is submitted in response to this Courtsorder inviting the Solicitor General to express theviews of the United St ates.

STATEMENT

1. This case concerns t he copyright to the four thedition ofCurrent Procedural T erm inology (CPT),a reference work published by the American MedicalAssociation (AMA), and the enforceability of thatcopyright . Pet . App. A2. The AMA is a non-pr ofit

corporation whose business includes publishing booksused by medical pr ofessionals. The CP T clas sifiesthe types of procedures physicians perform on pa-tients and assigns a unique code to each procedure.Ibid. E ach of thousands of medical pr ocedur es isgiven a five-digit code. Ibid. The CPT lists the codesand the accompanying descriptions of medical pro-cedures consecutively, and it includes an alphabeticalindex of medical procedures. Ibid. The initial edition


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of the CPT was published with notice of copyright in1966. Pet . App. E 2. The AMA updat es and alt er s t heCPT on a yearly basis. Id. at E 3. The AMA is theonly publisher of the CPT, and is therefore the ulti-mat e source of all non-infr inging copies of the CP T.The AMAs current selling price for the CPT is $40

to $50, depending upon the edition selected. E R, vol.II , CR10 at 6.1

2. The Health Care Financing Administrat ion ofthe Department of Health and Human Services(HCFA) administers financial reimbursement pro-gr ams for Medicar e and Medicaid. 42 Fed. Reg. 13,262(1977). HCF A is required by stat ute to adopt a un i-form coding system, known as the HCFA CommonProcedure Reporting System, to be used in thevarious health care reimbursement, oversight, andother programs in which procedures performed byphysicians are routinely reported to HCFA.2 Pe t .

App. A3. HCF A concluded that t he AMAs code wouldserve those purposes adequately, and it entered intoan agreement in 1983 that gave HCFA a non-exclu-sive, royalty-free license to use the CPT codes andterminology as a part of its Common ProcedureReporting System. Ibid. See also SE R 3-2, at 1.3

1 ER r efers to the excerpts of record filed by P MIC in

the court of appeals (9th Cir. No. 94-56774).2 42 U.S.C. 1395w-4(c)(5). The Office of Managemen t an d

Budget has also encouraged government agencies to make useof privately authored codes and standards in their regulationswhen possible, taking into account the requirements of copy-right and other similar restrictions in its publication of thesestan dard s. See OMB Circular No. A-119, 58 F ed. R eg. 57,643,57,645 (1993). HH S is curr ent ly a ut horized t o adopt u nifor mcodes from among the code sets that have been developed byprivate and public entities in various aspects of the federalhealt h care sy st em. 42 U.S.C. 1320d-2(c)(1) (Supp. I I 1996).

3 SER refers to the Supplemental Excerpts of Recordfiled by the AMA in the court of appeals (9th Cir. No. 94-56774).


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HCFA agreed not to use any other system ofpr ocedur e nomenclatur e * * * for r epor t ingphysicians services, and to require the use of theCPT in programs administered by HCFA, wheneverpossible. Pet . App. A3. See also SE R 3-2, at 1. Theagreement also requires that HCFA include a notice

of the AMAs copyright whenever it reproduces anyport ion of t he CPT. Pe t. App. E 5. The agr eementmay be canceled by either party upon 90 days notice.Id. at E 15-E16. See also SE R 3-2, at 4.

Use of the HCFA Common Procedure ReportingSystem has been mandated in a variety of federal pro-grams.4 A number of States have also adopted theCP T for use. Californ ia, for example, expr essly in -corporat es the CPT into law for use in that Stat e.5

3. Pet itioner PMIC is a publisher of medical books.Pet . App. A4. F or several years, it has purchasedcopies of the CPT from the AMA and resold them to

its customers. Ibid.; id. at E 6-E 7. In 1994, PMIC andAMA disagreed about the amount PMIC should payper copy of the CPT, as well as the quality of theversion of the CPT provided by the AMA. Id. at A4,E 6-E 7. Thereafter , PMIC stat ed its intention t opublish its own reference material using the C P Tcoding system or modified versions of the CPT codingsystem in [its own] format with its own corrections.Id. at E 7. PMIC t hen br ought t his action for a decla-ration that the AMAs copyrights on the CPT areinvalid because the CPT was incorporated into law.

4 The district court opinion collects citations to the variousfederal statutes and regulations that require the CPTs use inMedicar e, Medicaid, and the F eder al E mployees Compensa-tion Act. Pet . App. E 4-E 5.

5 Cal. Code Regs. Tit. 22, 51050 (1994) provides that [theCPT] 1987, and subsequent editions, is herein incorporatedby re ference into these regulat ions. Tit. 1, 20(e), providesth at [w]here a re gulation * * * incorporat es a document byre ference * * * th e document so incorp orat ed shall bedeemed to be a regulation subject to all provisions of the APA.


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Ibid. In addition, PMIC a rgued that the AMA hadviolated federal antitrust laws, and thereby commit-ted copyright misuse t hat render ed its copyr ightunenforceable, in r equiring HCF A by contr act to useonly the CPT for reporting physicians services. Id.at E 19.

4. The distr ict court granted summary judgmentto the AMA on the issue of the validity of the CP Tscopyright and enjoined the PMIC from publishingits own ver sion of the CP T. Pet . App. E 21. It heldthat the requirement that the CPT be used in federalprogr ams did not mean tha t such wor ks have * * *themse lves been enacted as law (id. at E12), and thatdest r uction of the AMAs copyr ight in the C P Twould amount to an unlawful taking of the AMAsproperty. Id. at E 17-E18.

The district court also held that the licensingagreement does not violate public policy and does not

const itut e copyr ight misuse. P et . App. E 21. Th ecourt noted that [t]he Agreement is freely termin-able upon 90 days written notice; the HCFA on itsown initiative sought a single national medical codefor use in Medicare and Medicaid reimbursements;and the AMA did not coerce the HCFA to choose onecode over others or to accept the AMAs royalty-freelicense to use the CPT. Ibid.

5. The court of appeals affirmed in part andrever sed in par t. Pet . App. A1-A15, C1-C2. The cou r taffirmed the district courts ruling that the AMAscopyright on the CPT has not terminated because

its cont ent s ar e incorporat ed * * * in var iousstatutes and regulations. Id. at E11. The cour t ofappeals reasoned that t he CPT is a pr ivately aut horeddocument, and not a work authored by someone in hiscapacity as a public employee, and that due processconcerns regarding public access to public law do notarise, at least in this context, because there is


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neither actual nor thr eatened depr ivation by t he AMAof public access to the CPT. Id. at A5-A11.

The court of appeals reversed the lower courtsholding on the claimed misuse of copyr ight . Thecourt held that the AMAs [c]onditioning the license[to use the CP T] on HCF As pr omise not to use com-

petitors products constituted a misuse of the copy-right by the AMA, Pet. App. A13, without re-gard to whether it constituted an antitrust violation,id. at A14.6

The court of appeals rejected the AMAs argumentthat the N oerr-Penn ington doctrine, see pp. 18-19,infra , immunized its action. The cour t he ld t hatbecause the AMA did not lobby HCFA to adopt theCPT, the AMAs First Amendment right to petitionthe government is not at stake. Pet. App. A14.7

6. Both P MIC and the AMA filed pet itions forcert iora ri. In r esponse to an inquiry from t his Office,

the Clerk of this Court informed us by letter on April13, 1998, see 97-1567 Pet . for R ehg E xh. 2a, t ha tthe Courts invitation for our views applies to theques tions present ed in both pet itions. On June 26,1998, the Court denied the AMAs petition for certio-r ar i. 118 S. Ct . 2367. On July 17, the AMA filed apetition for rehearing of that denial.

DISCUSSION

The decision of the court of appeals does not cr eat ea conflict among the circuits. In our view, neither t hepetition filed by PMIC nor the petition filed by the

6 After the Ninth Circuit rendered its judgment, the AMA

r enounced its right s under t he exclusivity clause. AMA C.A.Pet. for Rehg 9 n.3.

7 The court of appeals originally also stat ed that [b]ecause[PMI] need not establish an an titr ust violation [to make out aclaim of copyright misuse], we need not consider the AMAsantitr ust defenses. Pet . App. A14. The court later amendedits opinion to omit that sentence. I d. at C2.


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AMA presents any question warranting this Courtsreview.8

1. PMIC does not now dispute that the CPT wasproperly copyrighted when it was originally issuedin 1966. PMIC contends tha t AMAs copyr ight wasthereafter terminated when the federal government

required medical professionals to use the C P Twhen seeking reimbursement under federal pro-gr ams. Under PMICs view, the CPT has now be-come law; the public has a right of access to the law;and, consequently, no private organization can hold acopyr ight on such law. In support of its position,PMIC places primary reliance on Banks v. Man-chester, 128 U.S. 244 (1888), which held that judicialdecisions are not copyrightable.

a. Banks was an interpretation of the then-exist-ing copyright stat ute. The Banks Court held that judicial opinions cannot be copyrighted because [i]n

no proper sense can the judge who, in his judicialcapacity, pr epares the opinion or decision * * * beregarded as their author or their proprietor, in thesense of [the copyr ight st at ut e]. 128 U.S. at 253.Rather, the Court held that judges can have nopropr ietorship [i.e. copyr ight], as against t he pub lic a tlarge, in the fruits of their judicial labors. Ibid.Citing its prior decision in Wheaton v. Peters , 33 U.S .(8 Pet.) 59 (1834), the Court stated: The whole workdone by the judge constitutes the authentic exposi-tion and interpretation of the law, which, bindingevery citizen, is free for publication to all, whether it

is a declaration of unwritten law, or an interpretationof a const itut ion or st at ut e. 128 U.S. at 253.

Banks has no application to the present case fortwo reasons. Banks addressed the copyright statusof opinions written by judges to announce their

8 In accordance with the letter from the Office of theCler k dated Apr il 13, 1998, see 97-1567 Pet . for R ehg E xh. 2a,we address both the PMIC and the AMA petitions in this brief.


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decisions and reasoning in cases before them; it didnot address any question regarding the copyrightstat us of a work authored by a private ent ity. Th eincorporation by reference of the CPT into federalregulations does not alter t he fact that its author wasthe AMA, which wrot e it as a pr ivate organization and

not in the cour se of public employment. Not hing inBanks , the copyright statute, or public policy man-dates that a private organization may not be theauthor, for purposes of copyright law, of what itwrites. See Community for Creative Non-Violencev. R eid, 490 U.S. 730, 737 (1989) (As a general rule,the aut hor is the par ty who actually creat es the work,that is, the person who translates an idea into a fixed,tangible expression entitled to copyright protec-tion.).

Second, this Courts decision in Banks addressedthe question whether a judicial opinion could receive

copyr ight pr otection. This case by cont ra st concer nsthe termination of copyright protection for a workthat was concededly entitled to such protection at thetime it was written. Nothing in the Copyright Acteither at the time ofBanks or at presentwouldpermit a termination of copyright protection in thesecircumstances.9 And, most assuredly, Banks in noway suggests that a judicial opinion upholding thevalidity of a copyright would, if it quoted the copy

9

The distinction between works created by the govern-ment and pr ivate works used by the government is embodied in17 U.S.C. 105, which pr ovides: Copyright pr otection u nd erthis title is not available for any work of the United StatesGovernme nt, but the United States Government is not pre-cluded from receiving and holding copyrights transferred to itby assignment, bequest , or oth er wise. In 1976, the HouseCommittee confirmed that publication or other use by theGovernment of a private work would not affect its copyrightpr otection in any way. H.R . R ep. N o. 1476, 94th Cong., 2dSess. 60 (1976).


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righted work verbatim, thereby terminate the verycopyright it sought to uphold.10

b. The court of appeals considered Banks to standalso for the proposition that there is a due processrequirement of free access to the law that may beimplicat ed in some cases in which pr ivate part ies have

enforceable copyright s. Pe t. App. A7. Whether or notBanks decides this issue, we agree that due processrequires that persons subject to the law have a rightto reasonable access to its r equirements. Becauseaccess to the CPT is indispensable to obtaining reim-bursement to which a health care provider may beentitled under the law, due process may prohibitHCFA from requiring use of the CPT codes if rea-sonable public access to those codes is not available.

There is no suggestion in this case, however, thatthe AMAs copyright on the CPT has interfered withreasonable access to the requirements of the law.

The AMA exclusively publishes and distributes theCPT, charging health care professionals $40 to $50per copy. E R, vol. II, CR10 at 6. But due proces ssturns on whether the law is available to all thosegoverned by it, not on the number of sources fromwhich it is available. Ther e is no content ion t hat t heAMA has refused to deal with anyone seeking topurchase the CPT or that the CPT is anywhere un-available or d ifficult t o obtain.

If the AMA arb itrar ily refused to sell t he CP T t osome or all buyers, a problem of notice conceivablymight arise, with attendant due process concerns

for the administration of federal health care pro-grams. Ther e is no reason to suppose, however, t hatthe government could not deal with such a problemadequat ely and prompt ly. The cour t of appeals sug-

10 No question is presented in this case concerning fair use(or alleged infringement) by others of the copyrighted work inthe course of reproducing a public document, such as a judicialopinion, in which the copyrighted work is quoted verbatim.


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gested solutions that might be employed if, for anyreason, per sons became unable to secure copies of t heCPT from the AMA.11 Because this case presents noproblems of lack of access, however, the propriety andnecessity of such remedies are not before the Courtat this time.12

c. PMIC contends that both the court of appealsdecision in the present case and the Second Circuitsdecision in CCC Info. Servs., Inc. v. Maclean Hunter Mkt. R eports, Inc., 44 F .3d 61 (2d Cir. 1994), cer t .denied, 516 U.S. 817 (1995), which involved a compila-tion of used car valuations that a State required to beused for insurance reimbursement purposes, con-flict with the F irst Circuits decision in Bui ld ingOfficials & Code A dm in . v. Code Tech, Inc., 628 F .2d730 (1980) (BOCA ). BOCA concerned a privatelydeveloped, copyrighted model building code, which theState of Massachusetts adopted (with additions, dele-

tions, and revisions) in administrative regulations asthe state building code and arranged for the privateauthor of the code to publish and distribute. Id. at731-732. The F irst Circuit vacated a pr eliminar y

11 The court stated: If the AMA were to [limit or forgo

publication of the CPT] HCFA would no doubt exerciseits right to ter minate its agreement with the AMA. Otherremedies would also be available, including fair use and dueprocess defenses for infringer s * * * and, per haps mostrelevant, mandatory licensing at a reasonable royalty could berequired in light of the great public injury that would result ifadequate access to the CPT were denied. Pet . App. A8.

12 PMIC has asserted that it does not seek simply to dis-tribute copies of the CPT to the public, but to publish its ownversion of the CPT coding system with its own corrections.Pet App. E 7. Depending on the nature and extent of th ecorrections, such an action might violate AMAs exclusiveright, as copyright owner, to prepare derivative works. See 17U .S.C. 106(2). But PMI C cannot just ify infringing the AMA sright to prepare derivative works by invoking a due processright of other persons to public notice of the content of theCPT, as written by the AMA and employed by HCFA.


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injunction that prevented another company frompublishing the Massachusetts code, holding that theprivate author had not demonstrated a likelihood ofsuccess on the merits. I d. at 736.

BOCA does not conflict with the Ninth and SecondCircuit decisions. I nitially, the F irst Circuit in

BOCA did not reach a final conclusion regardingwhether a copyright in a model code would terminatewhen the code is adopted as law. Although sugges t ingsome arguments both in favor of terminating theprivate authors copyright in the model code, seeBOCA , 628 F.2d at 733-734, and against that result,id. at 736, the F irst Circuit expr essly declined t odecide the ultimate issue, holding only that [a] final judgment should await the more complete hearingon the merits. Id. at 732.13 In the 18 years since

BOCA , the F irst Circuit has not r eturned t o th eissue, and it has thus never squarely concluded that a

copyrighteven in circumstances similar to those inBOCA would terminate.

More fundamentally, unlike the plaintiff in BOCA ,PMIC does not seek merely to reproduce an officialcopy,BOCA , 628 F.2d at 732, of the text of a statutethat has been enacted into law or of regulations thathave been duly promulgated. Inst ead, PMIC wants t o

13 While we do not rule finally on the question, we cannot

say with any confidence that the same policies applicable tostatutes and judicial opinions may not apply equally to regula-tions of this nature. BOCA , 628 F .2d at 735. The cour t ex-

plained that it was hesitant to reach a firm conclusion onwhether copyrighted material adopted as law would retaincopyright protection:

In the lower court , t he part ies dealt but briefly with t hematter, and the district court itself did not allude to it in itsdictated opinion. The question is not only one of firstimpression but may be of importance in view of a possibletrend towards state and federal adoption, either by meansof incorporation by reference or otherwise of model codes.

I d. at 736.


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reproduce the CPT, a privately produced and copy-righted work that is referred to in federal regula-tions. F or that r eason, even a holding that t heplaintiff in BOCA could freely reproduce an officialcopy of the Massachusetts Code maintained in theState Secretarys office would not control the

disposition of a case like this, in which the copyrightowner has never permitted the copyrighted workitself to be reproduced as a federal statute or regula-tion.14

2. PMI C also claims (Pet . 25-30) that, in view ofthe governments requirement that health care pro-fessionals use the CPT to obtain reimbursement, theCPT is uncopyrightable because copyright pr otectiondoes not extend to any idea, procedure, process, sys-tem , method of operation, concept, principle, or dis-covery, regardless of the form in which it is de-scribed, explained, illustrated, or embodied in such

wor k. 17 U.S.C. 102(b) (emphasis added). P MI Cargues that the court of appeals held that the CPT isa system, but, contrary to Section 102(b), neverthe-less upheld the AMAs copyright because othersystems ar e available or may be crea ted . Pet. 29.

14 Indeed, BOCA involved the enactment of a model code

that carr[ied] sanctions of fine and imprisonment for vio-lations. 628 F .2d at 734. Because of t hose criminal s anct ions,BOCA implicated the full rigor of the requirement thatcriminal laws must give the person of ordinary intelligence areasonable opportunity to know what is prohibited, so that he

may act accordingly. Graynedv. City of R ockf ord, 408 U.S.104, 108-109 (1972). The r equ iremen t s at issue her e and inCCC Information Servicesthat the copyrighted work be usedto obtain government reimbursement or measure insurancepaymentsare not backed up by any such sanctions and, unlikethe model code in BOCA , they do not govern primary be-havior. Accordingly, somewhat more relaxed re quiremen tsof public not ice app ly. Cf., e.g., Carpenterv. Pennsylvania, 58U.S. (17 How.) 456, 462 (1854) (ban on ex post facto laws doesnot apply to civil matters); Burgess v. Sa l m on , 97 U.S. 381, 385(1888).


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As used in Section 102(b), however, the term sys-tem has a particular connotation relating to funda-ment al pr inciples of copyright law. See W arrenPublg, Inc. v. Microdos Data Corp., 115 F .3d 1509,1517 n.22 (11th Cir.), cert. denied, 118 S. Ct. 397 (1997).Section 102(b)s exclusion of systems, etc., from

copyright protection embodies the copyright lawsbasic dichotomy between expression and idea. Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S.340, 356 (1991) (quoting H.R. Rep. No. 1476, 94thCong., 2d Sess. 57 (1976); S. Rep. No. 473, 94th Cong.1st Sess . 54 (1975)). Copyr ight p rotect ion extendsonly to the expr ession of an idea, not to the idea its elf.Bakerv. Selden , 101 U.S. 99 (1880).

The Ninth Circuit did not state or imply that theCPT is a system in the sense in which that term isused in Section 102(b), or that the court understoodthe AMAs copyright protection to extend to the idea

of a system of codes, or to the ideas embodied in theCPT, rather t han to the AMAs par ticular expr essionof those ideas. The mere fact t hat t he Ninth Cir cuitreferred to the CPT as a system in the ordinarysense, see, e.g., Pet. App. A2, A11 n.8, did not amountto a holding tha t it is a syst em under Section 102(b)but nonetheless protectable by copyright.15

15 PMIC contends (Pet. 25-30) that there is a conflict in the

circuits regarding whether Section 102(b) systems may beprotected by copyright where alter native systems ar e available.No court, however, has held that a system may be protected

by copyright as long as other competitive systems are avail-able. P et. 26. In Toro Co. v. R & R Prods. Co., 787 F .2d 1208,1212 (8th Cir. 1986), the E ighth Circuit simply re fused a lit er al applicat ion of [Section 102(b)s] langua ge, t hat wou ldlead to the conclusion that a work that in ordinary parlancecould be termed a parts numbering system would necessarilybe ineligible for copyright pr otection under Section 102(b). In Am erican Dental As sn v. Delta Dental Plans A ssn, 126 F .3d977, 980-981 (7th Cir. 1997), the Seventh Circuit rejected theproposition that every taxonomy is a system under Section102(b), and it held th at t he Amer ican Dent al Associations Code


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The CPT may indeed be essential to the operationof the governments medical reimbursement system.As the Seventh Circuit said of a similar code, how-ever, the fact that the uses of a code include systemsdoes not mean the code itself is a system. AmericanDen tal A ssn, 126 F .3d 977, 980-981 (7th Cir. 1997). In

the present case, the Ninth Circuit had no occasion toreach any general holding regarding the applicationof the term system in Section 102(b) to the CPT.Although one heading in PMICs brief in the court ofappeals referred to System and Method of Opera-tion, the text under that headingless than half apage in totalargued only that the CPT is a methodof operation, not that it is a system. PMIC C.A.Br. 21; PMIC C.A. Reply Br. 13 (contending t hat t heAMA had misunderstood PMICs argument that theCPT is an uncopyrightable system under 17 U.S.C.102(b).). Moreover , as the cour t of appeals ind i-

cated, Pet. App. A11 n.8, PMICs argument was thatgovernment requirements postdating both creationand valid copyrighting of the CPT transformed it intoan uncopyr ightable method of operat ion. The ar gu-ment does not suggest that the CPT was uncopy-rightable under Section 102(b) when it was creat ed, orthat it would be uncopyr ightable under Section 102(b)absent governmental adoption.

Nor can the general rule that PMIC claims to findin the opinionthat the possibility of creating othersystems is alone sufficient to remove a system fromSection 102(b)be detected in the courts brief foot-

note r eference to Section 102(b). Pet . App. A11 n.8.The footnote to which PMIC directs its attack doesnot even refer t o any argument that the CP T is a

of Dental Procedures and Nomenclaturea work strikinglysimilar in character to the CPTwas not a Section 102(b)system. Neither Toro nor American Dental can be read tohold that the possibility or availability of alternative systemsalone renders Section 102(b) inapposite.


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Section 102(b) system, much less reach a holding onthat point. Instead, the footnote recites that it isresponding to PMICs argument that the CPT is anuncopyrightable industry standard or idea undersection 102(b) * * * because HCFA mandates use ofCPT codes in M edicaid applications . Ibid. (empha-

sis added). With r espect t o that ar gument, the court sholding was not that the possibility of develop-ing an alternative would in all cases preclude a find-ing that a given work was non-copyrightable. Inst ead,its holding was that recognizing a copyright in thecircumstances of this case does not stifle indepen-dent creative expression in the industry. Ibid.Indeed, the court recognized that the precise scope ofthe copyright protection afforded the CPT was notbefore it, stating that while the AMAs copyrightprevents wholesale copying of the CPT, it wouldnot prevent [PMIC] or the AMAs competitors from

developing comparative or better coding systems andlobbying the federal government and private actors toadopt them. Ibid.16

16 In light of the postur e of this case, which arose fr om

PMICs request for a declaratory judgment that the CPT itselfis non-copyrightable, the Ninth Circuit had to go no furtherthan to hold that wholesale copying of the CPT is imper-missible. The CP T is a refer ence work containing code n um-ber s, descript ions, guidelines, and definitions. See Pet . Ap p.E 2-E 3. E ven if PMIC were correct that t he code numbers a nddefinitions contained within the CPT constitute an uncopy-

rightable system, that would not alter the copyright ability ofth e work as a whole. F aced with a claim of infringe ment , orfor a declaratory judgment of noninfringement, a court mightappropriately analytically dissect the CPT and determinewhich elements are protected by the AMAs copyright andwhich are not. See, e.g., Apple Computer, Inc. v. MicrosoftCorp., 35 F .3d 1435 (9t h Cir. 1994), cer t. denied , 513 U.S. 1184(1995); Compu ter A ssoc. In tl, In c. v. Altai, Inc., 982 F .2d 693(2d Cir. 1992). But tha t is not the case tha t PMI C broug ht .Questions that may arise concerning fair use of parti-cular elements also are not presented here.


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PMICs argument (Pet. 23-24) that the AMAscopyright is invalid under the doctrine of merger isalso without merit. The doctr ine of mer ger is de-signed to pr event an aut hor from monopolizing an ideamerely by copyrighting a few expressions of it whenthe idea behind the expression is such that it can be

expressed only in a very limited number of ways.Toro Co. v.R & R Prods. Co., 787 F .2d 1208, 1212 (8t hCir. 1986). PMIC does not contend that idea andexpression merged at the time the AMA received acopyright on the CPT; its argument is entirely that[t]he idea and expression of a law necessarilymer ge. Pet . 24 (emphas is added). PMIC cit es noauthority for the proposition that a users decision touse a copyright in a particular way (e.g., a govern-mental entitys decision to incorporate the copy-righted material by reference in regulations) cancreate a merger and thus terminate a copyright that

was originally valid.3. The court of appeals held that the AMA misused

its copyright on the CPT because of the contractualcondition that required HCFA not to use any othersystem of nomenclature during the life of the licens-ing agreement. Regar dless of the merits of t hatholding, the AMA has taken steps to purge itself ofany possible misuse by renouncing the exclusivityclause, see note 6, supra, and the courts holdingregarding misuse therefore may well have limitedeffects. Review of the misuse issues r aised by t heAMA in its petition in No. 97-1567 prior to a more

definite indication of the ongoing consequences of thecourt of appeals decision would be premature.

In any event, we do not believe that any of theissues presented by the petition in No. 97-1567war rant s review by th is Cour t. The AMA does notassert that there is a conflict among the circuitswith respect to the existence vel n on of a copyrightmisuse defense. The Nint h Circuits r ulings r e-


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garding the copyright misuse doctrine neither raiseimportant questions of federal law that require re-view by this Court at this time nor decide importantfederal questions that conflict with the relevantdecisions of this Court.

a. The defense of copyright misuse was fir st

applied by a court of appeals to bar an action forcopyright infringement in Lasercom b A m erica, In c. vReynolds , 911 F.2d 970 (4th Cir . 1990).17 Since thattime, two additional courts of appeals have r ecognizedthe defensethe Ninth Circuit in the opinion belowand the Fifth Circuit in DSC Communications Corp.v. DGI Techs, Inc., 81 F .3d 597 (1996). Othe r cour t shave reserved the question whether the defense ofcopyr ight misuse exists. See, e.g., Data GeneralCorp. v. Grumman Sys. Support Corp., 36 F .3d 1147,1169-1170 (1st Cir. 1994); R eed-Un ion Corp.v. Turt l eWax, Inc., 77 F .3d 909, 913-914 (7th Cir . 1996). No

court has categorically held that misuse of a copy-right would have no effect on the copyr ights enforce-ability.

In light of the limited development and relativelyrare invocation of the copyright misuse defense in thecourt s of appeals, the issue of the doctr ines ex ist ence(and scope if it does exist) is not ripe for review bythis Court . As Just ice F rank furt er observed, reviewby this Court is generally not warranted before anissue has been fully considered by the lower courts:It may be desirable to have different aspects of anissue furt her illuminat ed by the lower court s. Wise

adjudication has its own time for ripening. Mary-land v. Baltimore Radio Show, 338 U.S. 912, 918

17 See also M. Witmark & Sons v. Jensen , 80 F . Sup p. 843

(D. Minn.), appeal dismissed, 177 F .2d 515 (8th Cir . 1948). Cf. Broadcast Music, Inc.v. Columbia Broadcasting System , 441U.S. 1, 24 (1979) (reversing copyright misuse judgment de-pendent upon antitrust judgment, on the ground that theantitrust judgment was erroneous).


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(1950). Future analysis by the lower courts, whichmay encounter the copyright misuse defense in avariety of factual contexts, will shed more light onwhether a copyright misuse doctrine should be re-cognized and, if so, what its scope should be .

b. Because it would be premature for t his Court to

consider whether the defense of copyright misuseshould be recognized at all, it is also unnecessary atthis time for the Court to consider whether the de-fense should be limited to instances of antitrustviolations. Moreover , we do not agr ee with t he AMAthat ther e is presen tly a conflict in the circuit s onth is issue. In the primary case r elied upon by t heAMA, Saturday Evening Post Co. v. Rumbleseat Press, Inc., 816 F .2d 1191, 1200 (7th Cir . 1987), t heSeventh Circuit h[e]ld that a no-contest clause in acopyright licensing agreement is valid unless shownto violate antitr ust law. The cour t did not hold

that copyright misuse, if recognized as a defense to acopyright infringement action, would in all casesdepend on proof of an ant itr ust violation. Alt houghthe other cases cited by the AMA (Pet. 19-20) dis cussthe competitive impact of various practices attackedas copyright misuse on the ground that they violatedthe antitrust laws,18 none of them squarely holds thatestablishing copyright misuse would in all instancesrequire proof that the copyright holder had violatedthe ant itr ust laws. Accordingly, none of these de-cisions conflicts with the Ninth Circuits decision inthis case.

18 See BellSouth A dver. & Pu blg Corp. v. Donnelly Info.

Publg, Inc., 933 F .2d 952, 961 (11th Cir. 1991), rev d on oth ergr ounds , 999 F .2d 1436 (11th Cir. 1993) (en ba nc); United Tel.Co. v. Johnson Pu blg Co., 855 F .2d 604, 611-612 (8th Cir . 1988); Edward B. Marks Music Corp. v. Colorado Magnetics, Inc.,497 F .2d 285, 290-291 (10t h Cir. 1974), cert . d enied, 419 U .S .1120 (1975).


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c. F inally, the AMA asks this Court to grant i t spetition to review the question whether obtaining agovernment contract with an anticompetitive restric-tion is conduct protected under the First Amend-ment . 97-1567 Pet . 24. The AMA ar gues t hat , underthe N oerr-Pennington doctrine, the First Amend-

ment proscribes withdrawal of copyright protectionon the basis of a copyright misuse defense that isbased on the t erms in a contr act with the government.

The N oerr-Pennin gton doctrine developed as aconst r uction of the Sher man Act. See Eastern R.R.Presidents Conference v. Noerr Motor Freight, In c.,365 U.S. 127, 136-140 (1961); United Mine Workers v.Pennington , 381 U.S. 657 (1965); F TC v. Super ior Court Trial Lawy ers A ssn , 493 U.S. 411, 424 (1990).Under the doctrine, [c]oncerted efforts to restrainor monopolize trade by petitioning government offi-cials are protected from antitrust liability. A ll ied

Tu be & Condu it Corp. v. Indian Head, Inc., 486 U.S.492, 499 (1988).

The court of appeals in this case did not adopt acommercial or government contract exception tothe Noerr-Pennington doctrine, as the AMA claims.See 97-1567 Pet . 24. Inst ead, t he cour t of appeals heldthat the AMA had failed to make out the key factualpremise of the Noerr-Pennington doctrinean at-tempt to petition the government. The court ofappeals entire discussion of the issue consists of aone-sentence response to the AMAs one-paragraphargument, stating that [b]ecause the AMA did not

lobby HCF A to adopt the CP T, t he AMAs F ir stAmendment right to petition the government is notat stake. Pe t . App. A14. F or that r easonand notbecause of any adoption of a commer cial excep-tionthe cour t r efused to apply the Noerr-Penning-ton doctrine.

Even if mistaken, the court of appeals fact-boundruling that the AMA had not shown that it engaged


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CONCLUSION

For the foregoing reasons, the petition for a writ ofcertiorari in No. 97-1254 should be denied and thepet ition for r ehear ing in No. 97-1567 should be denied.

Respectfully submitted.

SE TH P. WAXMANSolicitor General

F RANK W. H U N G E RJ OE L I . K L E I N

Assistant A ttorneys General

LAWRENCE G. WALLACEDeputy Solicitor General

J AMES A. F E L D M A N As sistan t to the SolicitorGeneral

ANTHONY J . ST E I N M E Y E RAL F R E D MOLLIN

J OHN C. H OYLEDAVID SEIDMANAttorneys

AUGUST 1998

us department of justice antitrust case brief - 00728-2076

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