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| | ==590TU Discussion== | | ==590TU Discussion== |
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| − | Welcome to the Discussion Page for CSE590TU. Please use the + sign in the top of the screen to add comments to the page. | + | Welcome to the Discussion Page for CSE590TU. This is for general comments and announcements for the class. If you have a comment on a specific topic or lecture, please visit the [[Main_Page#Lecture_Notes_and_Discussion | lecture-specific page]]. Please use the + sign in the top of the screen to add comments to the page. |
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| − | == Rights for NBA scores on pagers - what if? == | + | == Talk on Does IT Matter for MS Employees == |
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| − | I'm an engineer, not a policy wonk, so bear with me. In class we learned about the Hearst VS AP case that said that you couldn't protect facts unless someone taking those facts would "destroy" the underlying service. In the case about the NBA trying to block the scores of games being broadcast on pagers without them taking a cut of the $$, the quite reasonable claim is that those scores being broadcast would not destroy the NBA and hence it's OK.
| + | Nicholas Carr will be speaking on Does IT Matter on Thursday, Nov 4 in 113/1021. [apardoe] |
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| − | OK - suppose that I founded SpaithCO Limited and in 2003 I gave the NBA a wad of cash to have exclusive rights to sell those scores on pagers. (Pretend the real life court case never happened.) Then some heavy weight (say Moto) in 2004 comes along and doesn't want to play ball with SpaithCO. If Motorola can broadcast out NBA scores without paying SpaithCO, then SpaithCO's wise and handsome CEO could argue that his company would be destroyed by Moto's action. Never mind what happens to the NBA.
| + | == IT Worker Demand and Outsourcing == |
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| − | Does SpaithCO have a claim here? I've been speculating and I believe it depends on whether the NBA had a right to *exclusively* sell this information to SpaithCO for this use in the first place. I'm thinking the answer is no or the NBA would've pulled something like this already to get at least a little $$ out of some SpaithCO. Can anyone out there shed some more light on this? The idea of some underlying service being "destroyed" really seems like a grey area in many cases.
| + | I moved this thread to the [http://cubist.cs.washington.edu/CSEP590TU-wiki/index.php/Talk:Outsourcing_and_its_impact_on_innovation%3F "Outsourcing and its impact on innovation?" project idea discussion page] so that we can concentrate the discussion on the impact of outsourcing in one place. |
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| − | [Author: John Spaith]
| + | == Fair use: parody vs. satire == |
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| − | SMM: First off, this is a great discussion. You're asking exactly the right questions and the Morris case is a wonderful example.
| + | (This is about a reading for lecture 4, but there isn't a section for that yet ...) |
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| − | My reaction to SpaithCO is that you're right to ask whether the NBA has any rights to sell in the first place. But I would sharpen it a bit by asking if the NBA *should* have such rights in principle. Lawyers have to deal with what is, but we have the luxury of considering alternatives.
| + | The "fair use" section in Ch. 7 of ''Chasing Moore's Law'' mentions satire as an example of such. Did they mean parody? I first learned there was a distinction a couple weeks back when JibJab's ''This Land'' (''Sue You: This Song Is Our Song'' [http://www.wired.com/news/culture/0,1284,64376,00.html]) was released. From what I understand, a parody uses the source material to comment on the source material. A satire uses the source material to comment on something else. |
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| − | Now the way I answered that question in class is the way the Supreme Court answered the question back in the INS case in 1919. Would the activity disappear? Notice that this is *not* the same question as "Would SpaithCO disappear?" If we hand out monopoly rights, that's always going to be a good deal for the individual recipients. But that doesn't mean that society should countenance the trade or should agree to put up with DWL, etc. So the rough and ready answer is that property rights -- the right to fence off scores and sell "exclusive rights" -- sounds like a bad idea.
| + | I am a little confused on what is fair use, though. I think parody is always fair use. From what I heard around JibJab's case, satire is never fair use. Searching on FindLaw.com [http://www.findlaw.com], I got the impression that there was no meaningful distinction. Wikipedia [http://en.wikipedia.org/wiki/Main_Page] suggests that satire can be fair use [http://en.wikipedia.org/wiki/Fair_use], depending on circumstances, but has a tougher burden of proof because "the satirist's ideas are capable of expression without the use of the other particular work" [http://en.wikipedia.org/wiki/Fair_use#Fair_use_and_parody]. |
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| − | Final point: I'm still saying this in a sloppy way. The underlying thought is "well, the NBA makes a lot of money on its core business and it will go on having games no matter what I do about pager scores." But what I'm really talking about is the patent reward, ((Π)v-c). You can imagine that in some cases the NBA might need to be able to sell its scores to keep the whole operation running. So when I say that the NBA doesn't need this property right, I'm really revisiting the question of whether ((Π)v-c) can be too large. Excessive rewards mean DWL and crazy behavior like races. There's a good argument for setting ((Π)v-c) > 0, but we don't want ((Π)v-c) >> 0.
| + | So when, if ever, is satire fair use? |
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| | + | [[User:Jantos|Jim Jantos]]: It is my understanding that parody takes aim at the copyrighted work, while satire borrows from the copyrighted work but aims at some other target. |
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| | + | There is no presumption of fair use with respect to parody or satire. Based on the result of the Supreme Court case Campbell v. Acuff-Rose Music, Inc. ("Oh Pretty Woman" Roy Orbison song parodied by 2 Live Crew - Supreme Court held: fair use), one may conclude that all transformative parody will likely be deemed fair use under section 107. However, the Supreme Court emphasized that parodies are not entitled to a fair use presumption and that each fair use factor under section 107 must be analyzed based on the context of the situation. |
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| | + | Therefore, the fair use implications of parody and satire must be made on a case by case basis analyzing the four fair use factors of Section 107: (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purpose; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work. |
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| − | --[[User:Jackr|Jackr]] 22:32, 6 Oct 2004 (PDT) To me this sounds like the Cable Company phone directory case also mentioned in class, just with the addition of money being paid to get the initial information. It would seem the NBA managed to sell something it never really owned. Of course, I'm just an engineer as well.
| + | Looking at the factors, parody requires the original copyrighted work to make its point by defininition, and therefore a parody has a basis to use the original work. However, satire theoretically can stand on its own without the copyrighted work, which requires some justification for the act of using the copyrighted work in the first instance. |
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| | + | == IT & Health care == |
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| − | SMM: My reaction when I have my public policy hat on is that we can make up the property rules, particularly in the cyberworld where our hardwired beliefs about private ownership -- which have to do with anthropology at least as much as law -- are somewhat attenuated and up for grabs. The question to focus on is whether creating a property right will do anything to make the economy (not just the participating firms) wealthier.
| + | Here is an op-ed piece in the [http://www.washingtonpost.com Washington Post] by Senators Bill Frist and Hillary Clinton about [http://www.washingtonpost.com/wp-dyn/articles/A30277-2004Aug24.html ''How to Heal Health Care'']. (They encourage the use of IT.) |
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| − | And enough with the "just an engineer" stuff already! It reminds me of Sam Ervin claiming to be a "country lawyer." :)
| + | Can others attend the Carr talk at MSFT? |
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| − | -- [apardoe] I believe that the NBA issue stems from the Supreme Court's decision not to hear the PGA vs Morris Communications appeal ( http://www.law.com/jsp/article.jsp?id=1071719761758 ). The PGA is able to protect golf tournament scores and statistics because they are a private company producing this IP (the scores) on private property and license this information to spectators and news organizations. This is to say that the tournament scores are in fact company trade secrets developed at great cost.
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| − | My assumption is that the NBA has never "owned" basketball game scores and statistics because they produce this IP on public property. If they are able to align their efforts closely enough with the PGA's IP development process they may be able to protect their IP in the same way that the PGA is able to do so. I can't imagine a basketball team buying a stadium (as opposed to buying a stadium-funding election) but there's gotta be a loophole.
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| − | [/apardoe]
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| − | SMM: The Morris case is very interesting and also near to my current research interests. Thanks for finding it. If you read the district court opinion, they say what you do: PGA doesn't need IP to have "appropriability" because they can fence the place off physically. After that, it's a trade secret and they can make deals about it as long as the whole world hasn't seen the information on TV.
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| − | The district court also says that the NBA "free riding" test is a "higher standard" that PGA doesn't have to meet. Instead, PGA can control the information until it has "reaped the full benefit possible from its investment." This sounds innocuous, but from a policy standpoint letting PGA get "full benefit possible" sounds like a huge reward -- i.e., (v-c) on steroids. I suspect that when new cases come before the court we'll find out that the judge's statement is hyperbole.
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| − | The appeal court opinion is also interesting. They agree that the PGA's info is a "proprietary product" -- a shadowy distinction, since it creates property rights that Congress never voted for -- but then they go on to worry about free riding anyhow. You might think (heck, I *do* think) that the most natural way to analyse free riding would be under the intellectual property laws, but they've already refused to do that. So what they do instead is argue from cases which say that the Sherman Act is interested in efficient markets and "efficiency" includes the right to control free riding. Like the district court, their concept of free riding is not even remotely similar to the copyright rule which says that mere "sweat of the brow" cannot be protected. They know this is a problem but answer -- somewhat legalistically -- "Gee, that's copyright and we're talking about antitrust here."
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| − | That's a pretty good legal answer (not perfect, lawyers like to say "that's a distinction without a difference") but what should disturb us from a policy standpoint is that the policy answer to free riding should be the same no matter what legal rubric we ask the question under. In the long, long, long view what's going on here is that the English Parliament tried to draw a line between "good monopolies" (intellectual property) and "bad monopolies" (Sherman Act) in 1624. You'd think that judges would have untangled the mess by now, but in fact there's been remarkably little progress. I think this is a kind of experimental proof that the division has very deep conceptual problems.
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| − | I have pasted a copy of the Morris Circuit Court opinion below. I always recommend reading cases to students, because you soon discover that you don't need three years of law school to get a sense of what's going on. BTW, you can find the text of just about any recent case for free if you are willing to register at http://www.lexisone.com/
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| − | == Talk on Electronic Voting for MS Employees ==
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| − | There is going to be a talk given on electronic voting by a Microsoft researcher for Microsoft employees on October 18th. You can register for the talk through MSTE. [jameswelle]
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| − | BACKGROUND ON THE MORRIS CASE:
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| − | MORRIS COMMUNICATIONS CORP., a Georgia Corporation, Plaintiff-Appellant, versus PGA TOUR, INC., Defendant-Appellee.
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| − | Nos. 03-10226, 03-11502
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| − | UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT
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| − | 364 F.3d 1288; 2004 U.S. App. LEXIS 5915; 70 U.S.P.Q.2D (BNA) 1446; 2004-1 Trade Cas. (CCH) P74,350; 32 Media L. Rep. 1513; 17 Fla. L. Weekly Fed. C 368
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| − | March 31, 2004, Decided
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| − | March 31, 2004, Filed
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| − | SUBSEQUENT HISTORY: Rehearing, en banc, denied by Morris Communs. Corp. v. PGA Tour, 2004 U.S. App. LEXIS 19644 (11th Cir., May 28, 2004)
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| − | Motion granted by, US Supreme Court certiorari denied by Morris Commun. Co. v. Pga Tour, 2004 U.S. LEXIS 6257 (U.S., Oct. 4, 2004)
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| − | PRIOR HISTORY: [**1] Appeals from the United States District Court for the Middle District of Florida. D. C. Docket Nos. 00-01128 CV-J-20-HTS, 00-01128 CV-3-J-20HTS. Harvey E. Schlesinger, Judge. Morris Communs. Corp. v. PGA Tour, Inc., 235 F. Supp. 2d 1269, 2002 U.S. Dist. LEXIS 25854 (M.D. Fla., 2002)
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| − | DISPOSITION: Affirmed.
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| − | COUNSEL: For Morris, Communications Corp, Appellant (03-10226-CC): Borucke, David Clark, Holland & Knight, LLP, Tampa, FL. Gabel, George D. Jr., Holland & Knight, LLP, Jacksonville, FL. Hoffman, Jerome W., Holland & Knight, Tallahassee, FL. Conner, Timothy J., Holland & Knight, LLP, Jacksonville, FL. Brannock, Steven L., HOLLAND & KNIGHT, TAMPA, FL.
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| − | For PGA Tour, Inc., Appellee (03-10226-CC): Mishkin, Jeffrey A., Skadden, Arps, Slate, Meagher & Flom, LLP, New York, NY. Riley, James M., Rogers, Towers, Bailey, Jones & Gay, Jacksonville, FL. Vermut, Richard Stuart, Rogers, Towers, Bailey, Jones & Gay, P.A., Jackson, FL. Russell, Cristine M., Rogers, Towers, Bailey, Jones & Gay, Jacksonville, FL.
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| − | For Newspaper Association of America, Amicus (03-10226-CC): Hart, Jonathan David, Dow, Lohnes & Albertson, Washington, DC.
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| − | JUDGES: Before EDMONDSON, Chief Judge, DUBINA and COX, Circuit Judges.
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| − | [*1290] DUBINA, Circuit Judge:
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| − | Plaintiff-Appellant, Morris Communications Corp. ("Morris"), brought suit against Defendant-Appellee PGA TOUR, Inc. ("PGA"), alleging that PGA violated section 2 of the Sherman Act, codified at 15 U.S.C. § 2, by monopolizing the markets for (1) the publication of compiled real-time golf scores on the internet, and (2) the sale, or syndication of those scores. In addition, Morris alleged that PGA further violated section 2 of the Sherman Act by refusing to deal with Morris. The district court granted summary judgment in favor of PGA because it found, inter alia, that PGA had a valid business justification for its actions. For the reasons that follow, we affirm the judgment of the district court.
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| − | I. BACKGROUND
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| − | A. Facts
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| − | Morris is a media company that publishes print and electronic newspapers. PGA is the sponsor of a series of professional golf tournaments throughout North America [**2] known as the PGA Tour. In order to provide golf scores during its tournaments, PGA has developed a Real-Time Scoring System ("RTSS") that allows PGA to monitor the play around the entire golf course. RTSS is an elaborate electronic relay scoring system that relies on state-of-the-art computer technology and equipment as well as dozens of trained workers and volunteers.
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| − | RTSS works as follows. During a PGA golf tournament, volunteers known as walking scorers follow each group of golfers on the course and tabulate the scores of each player at the end of each hole [*1291] played. The scores are then collected by other volunteers, known as hole reporters, located at each of the eighteen greens on the golf course, who relay the scoring information to a remote production truck staffed by PGA personnel. The scores of all participating golfers are then processed at the remote production truck and transmitted to PGA's website, www.pgatour.com, as real-time golf scores, which are scores that are transmitted electronically nearly contemporaneously to their actual occurrence on the golf course. At the same time, the compiled scores are also transmitted to an on-site media center where members of the media [**3] are able to access the scores. The same information is also transmitted to various electronic leaderboards located throughout the golf course. As their name suggests, the leaderboards typically show only the top ten or fifteen players' scores.
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| − | The nature of a PGA golf tournament makes it impossible for one person to physically follow all the players at once. First, the average golf course spans approximately 150 acres and various golfers play numerous holes simultaneously. In addition, the PGA does not allow its invitees to use cell phones and hand-held devices on the course because such devices might disrupt play. Therefore, the only source of compiled golf scores for all tournament players is RTSS. Likewise, the only physical location at which to obtain compiled golf scores is the media center.
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| − | In order for media organizations to have access to the PGA media center, they must obtain free press credentials from PGA. To obtain these credentials, all media organizations must agree to follow PGA's terms and conditions, including PGA's On-Line Service Regulations ("OLSR"). The OLSR require media organizations to delay publication on their internet websites of scoring information obtained [**4] by RTSS until the earliest of (1) thirty minutes after the actual occurrence of the shot n1 or (2) such information has become legally available in the public domain, i.e. after the scores are posted on PGA's official website, www.pgatour.com. n2 In addition, the OLSR prohibit credentialed media
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| − | organizations from selling, or syndicating, compiled scoring information obtained in the media center to non-credentialed third-party internet website publishers without first buying a license to do so from PGA. n3
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| − | n1
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| − | Prior to 1999, credentialed members of the media could view scores in the media center and then re-key them directly into their own computers for transmission to their company's Internet servers. The result was that competitors of pgatour.com, including Morris, were able to publish real-time scores on their web sites as fast as or possibly faster than pgatour.com. Beginning in January 1999, shortly after the PGA Tour entered into an exclusive syndication contract with USA Today, it instituted [OLSR] applicable to all credentialed media invitees. Around the same time, Morris began publishing scores from PGA Tour tournaments on its web sites and selling them to third parties, and Morris appears to have been the PGA Tour's only major competitor in the syndication market.
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| − | Morris Communications Corp. v. PGA Tour, Inc., 235 F. Supp. 2d 1269, 1274 (M.D. Fla. 2002). The version of the OLSR at issue here was instituted in January 2000. [**5]
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| − | n2 PGA agreed that once the golf scores are posted on its website, they are in the public domain. Id. at 1275 n.9.
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| − | n3 "No scoring information may be used by, sold, given, distributed or otherwise transferred to, any party other than the Credentialed Site in any manner whatsoever, without the prior written consent of PGA TOUR." [R. Vol. 1 at Tab 1, Exh. 4.]
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| − | Morris contends that, as a result of the OLSR, PGA is the only entity able to publish and sell real-time golf scores. Thus, Morris continues, PGA has an unfair advantage in the publication and syndication [*1292] of the scores. PGA counters that it adopted the OLSR to preserve the value of its investment in creating and developing RTSS and to promote the competitiveness of its own website.
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| − | Based on the allegedly illegal OLSR, Morris filed suit against PGA, asserting four antitrust claims: (1) monopolization of the internet markets, (2) unlawful refusal to deal, (3) monopoly leveraging, and (4) attempted monopolization of the internet markets. n4
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| − | n4 Morris also alleged violations of Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. Ann. § 501.201 et seq., and tortious interference with contract. Morris has not appealed the district court's grant of summary judgment in favor of PGA on these claims.
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| − | B. Procedural History
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| − | After extensive pre-trial discovery, the parties filed cross-motions for summary judgment on each claim. The district court granted PGA's motion for summary judgment, finding that PGA had a valid business justification for its OLSR because the OLSR prevented Morris from free-riding on PGA's investment in its costly RTSS. Accordingly, the district court found that PGA had not violated the antitrust laws even if it operated a monopoly and refused to deal with Morris. n5
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| − | n5 The district court did not, however, find that PGA had unlawfully monopolized or refused to deal. To the contrary, the district court found that Morris failed to prove a § 2 claim of monopolization as a matter of law, Morris Communications, 235 F. Supp. 2d at 1283; that the media center was not an essential facility, id. at 1285; that PGA did not have unlawful intent to harm competition or a competitor, id. at 1284, and thus did not unlawfully refuse to deal with Morris, id. at 1285-86, engage in unlawful monopoly leveraging, id. at 1286, or unlawfully attempt to monopolize, id.
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| − | Subsequent to the granting of summary judgment in favor of PGA, Morris filed a Rule 60 motion for relief from judgment on the ground that, following the issuance of judgment in favor of PGA, PGA adopted new terms of service ("TOS") regarding www.pgatour.com in further violation of § 2 of the Sherman Act. The new TOS prohibit anyone from using the information displayed on www.pgatour.com for a commercial purpose without first buying a license from PGA. The district court denied the motion, finding that the new TOS were beyond the scope of the instant lawsuit, which addressed only PGA's media credentialing regulations and the OLSR. Accordingly, the district court found that Morris's challenge to the new TOS would be more aptly addressed in a separate lawsuit.
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| − | Morris timely and separately appealed the adverse summary judgment and Rule 60 orders. This court consolidated the two appeals.
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| − | II. STANDARDS OF REVIEW
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| − | This court reviews de novo whether the district court correctly granted summary judgment in favor of PGA on all counts, applying the same standard that governed the district court. Levinson v. Reliance Standard Life Ins. Co., 245 F.3d 1321, 1325 (11th Cir. 2001). [**8]
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| − | This court reviews whether the district court correctly denied Morris's Rule 60 motion for abuse of discretion. See Bivens Gardens Office Bldg., Inc. v. Barnett Banks of Fla., Inc., 140 F.3d 898, 905 (11th Cir. 1998).
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| − | III. ANALYSIS
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| − | Before discussing the antitrust issues in this case, it is important to note what this case is not about. Contrary to the arguments of Morris and its amici curiae, this case is not about copyright law, n6 the Constitution, [*1293] the First Amendment, n7 or freedom of the press in news reporting. This case is a straight-forward antitrust case involving a product and a defendant's assertion of a valid business justification as its defense to anticompetitive actions, if any. Also important to note is that this case is being decided based upon the facts presented, not a hypothetical situation, no matter how probable its actualization. n8 Accordingly, the only real issue before us is whether PGA's restrictions and prohibitions regarding Morris's ability to sell compiled real-time golf scores to third parties violates § 2 of the Sherman Act. We do not address Morris's right of access to and internal dissemination of compiled [**9] real-time golf-scores, as permitted by the PGA. n9
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| − | n6 The arguments of Morris and its amici, who are various media organizations, entities, and associations, focus largely on irrelevant copyright law and argue that facts, such as golf scores, and compilations of facts are generally not a proper subject for copyright protection. While this assertion is a correct statement of law, it has no bearing on whether the golf scores and compilation of golf scores are the proprietary product of PGA's RTSS. At oral argument, Morris conceded that this is not a copyright case.
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| − | n7 In its argument for summary judgment in the district court, Morris stated that "this case is not a First Amendment case . . . it's an antitrust case." [R. Vol. 10 at pp. 8-9.]
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| − | n8 As the district court stated at the hearing on the cross-motions for summary judgment, "all that this court is interested in is the issues that you people bring to it. We're not making advisory opinions. And we don't change the facts. The facts are what the facts are. And what [we] rule on today may be a lot different than the case the two of you are involved in tomorrow." [R. Vol. 10 at p. 106.] [**10]
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| − | n9 At the hearing regarding the preliminary injunction, the district court asked counsel for PGA if PGA would permit "Morris . . . to disseminate this information to its companies, its various news companies, not charging them anything, just disseminating it"? Counsel for PGA responded:
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| − | There's no problem because that to us is news coverage, and . . . we eagerly, eagerly invite and want the press to do their function, their normal function of gathering and disseminating the news, and because it's so important to us to have them do that, we told Morris a year ago that we would allow them in the media center to sit there and re-key right from there into their own website and any of their related companies as a matter of news coverage, they could have those real-time scores right away for free. . . . The problem comes in only when Morris wishes to go into another business, which they label the news syndication business. . . . It is not the business of gathering and disseminating news. It is the business of selling a commercially valuable product that we have developed and paid for and we ought to be the ones to sell that.
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| − | [R. Vol. 8 at pp. 34-36.]
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| − | A. Monopolization n10
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| − | n10 Morris challenges the district court's resolution of its monopolization and attempt to monopolize claims. For the purposes of this case, the elements of the two offenses differ in only one material respect: attempt to monopolize requires specific intent to achieve monopoly power. See Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 456, 113 S. Ct. 884, 890-91, 122 L. Ed. 2d 247 (1993) ("To demonstrate attempted monopolization a plaintiff must prove (1) that the defendant has engaged in predatory or anticompetitive conduct with (2) a specific intent to monopolize and (3) a dangerous probability of achieving monopoly power."). Therefore, the attempt claim in this case is more difficult to maintain and prove. Because Morris does not withstand summary judgment on its monopolization claim, it cannot maintain its attempt claim. Accordingly, we decline to discuss the attempt claim further.
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| − | Section 2 of the Sherman Act provides that "every person who shall monopolize, [**12] or attempt to monopolize, . . . any part of the trade or commerce among the several States, . . . shall be deemed guilty of a felony. . . ." 15 U.S.C. § 2. The offense of monopoly under § 2 of the Sherman Act has two elements: (1) the possession of monopoly power in the relevant [*1294] market and (2) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident." United States v. Grinnell Corp., 384 U.S. 563, 570-71, 86 S. Ct. 1698, 1704, 16 L. Ed. 2d 778 (1966).
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| − | The first element, monopoly power, is the power to control prices in or to exclude competition from the relevant market. United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 391, 76 S. Ct. 994, 1005, 100 L. Ed. 1264 (1956). The second element requires predatory or exclusionary acts or practices that have the effect of preventing or excluding competition within the relevant market. See United States v. Microsoft, 346 U.S. App. D.C. 330, 253 F.3d 34, 58 (D.C. Cir. 2001). In order for a practice to be exclusionary, "it must harm the competitive [**13] process and thereby harm consumers." Id. "Harm to one or more competitors will not suffice" for a § 2 violation. Id.; see also Consultants & Designers, Inc. v. Butler Serv. Group, Inc., 720 F.2d 1553, 1562 (11th Cir. 1983) ("The relevant inquiry is not whether [a company's] present attempt to exclude adversely impacts competition but rather whether its acquisition of the power to exclude competitors had a sufficiently adverse impact on competition to constitute a [Sherman Act] violation.").
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| − | B. Refusal to Deal n11
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| − | n11 Morris challenges the district court's resolution of its refusal to deal and monopoly leveraging claims. For purposes of this case, the elements of the two claims are sufficiently similar to warrant only one discussion. See Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 157 L. Ed. 2d 823, 124 S. Ct. 872, 883 n.4 (2004) ("Leveraging presupposes anticompetitive conduct, which in this case could only be the refusal-to-deal claim we have rejected.").
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| − | Two theories exist upon which to predicate a unilateral refusal to deal claim: (1) the intent test and (2) the essential facility test. Mid-Texas Communications Sys., Inc. v. AT&T, 615 F.2d 1372, 1387 n.12 (5th Cir. 1980). n12 Under the intent test, it is unlawful for a monopolist to maintain or extend its monopoly power by intentionally engaging in conduct that unnecessarily excludes competitors and impairs competition. See id. at 1388; see also Eastman Kodak Co. v. S. Photo Materials Co., 273 U.S. 359, 47 S. Ct. 400, 71 L. Ed. 684 (1927).
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| − | n12 In Bonner v. City of Prichard, 661 F.2d 1206, 1207-09 (11th Cir. 1981) (en banc), this court adopted as binding precedent all Fifth Circuit decisions issued prior to October 1, 1981.
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| − | Under the essential facility test, a company that has exclusive control over a facility essential to effective competition may not deny potential competitors access to that facility on reasonable terms and conditions if [**15] to do so would create or maintain monopoly power in the relevant market. Covad Communications Co. v. BellSouth Corp., 299 F.3d 1272, 1285 (11th Cir. 2002), cert. granted and judgment vacated on other grounds, 124 S. Ct. 1143, 157 L. Ed. 2d 1040 (2004); MCI Communications Corp. v. AT&T, 708 F.2d 1081, 1132-33 (7th Cir. 1983); see also Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 157 L. Ed. 2d 823, 124 S. Ct. 872, 881 (2004) ("The indispensable requirement for invoking the doctrine is the unavailability of access to the 'essential facilities'; where access exists, the doctrine serves no purpose."). The plaintiff has the burden of proving that the defendant controls an essential facility that cannot be practically or economically duplicated. See Covad Communications, 299 F.3d at 1285.
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| − | In the absence of any purpose to create or maintain a monopoly, however, a [*1295] company may deal or refuse to deal with whomever it pleases. Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585, 601-02, 105 S. Ct. 2847, 2857, 86 L. Ed. 2d 467 (1985) (quoting United States v. Colgate & Co., 250 U.S. 300, 307, 39 S. Ct. 465, 468, 63 L. Ed. 992, 1919 Dec. Comm'r Pat. 460 (1919)). [**16] Even a company with monopoly power has no general duty to cooperate with its business rivals and may refuse to deal with them if valid business reasons exist for such refusal. See Mid-Texas Communications, 615 F.2d at 1388.
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| − | Ordinarily, when determining whether a defendant has violated § 2 of the Sherman Act, we first determine the relevant market and then decide whether the defendant possessed monopoly power in that market. In this case, however, we do not pursue such an inquiry because we agree with the district court that even if PGA possessed monopoly power in the relevant market, Morris's § 2 claims cannot prevail because PGA has a valid business justification for its actions. Therefore, even if PGA is monopolistic, and even if PGA refused to deal with Morris, it has not violated § 2 of the Sherman Act.
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| − | C. Valid Business Justification as a Defense
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| − | "The Sherman Act is . . . the 'Magna Carta of free enterprise,' but it does not give judges carte blanche to insist that a monopolist alter its way of doing business whenever some other approach might yield greater competition." Verizon Communications, 124 S. Ct. at 883 (internal quotations [**17] omitted). To the contrary, "Section 2 of the Sherman Act . . . seeks merely to prevent unlawful monopolization" and unlawful refusals to deal. Id.
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| − | Unlawful monopoly power requires anticompetitive conduct, which is "conduct without a legitimate business purpose that makes sense only because it eliminates competition." Gen. Indus. Corp. v. Hartz Mountain Corp., 810 F.2d 795, 804 (8th Cir. 1987); see also, LePage's Inc. v. 3M324 F.3d 141, 153-54 (3rd Cir. 2003) (discussing Conwood Co., L.P. v. United States Tobacco Co., 290 F.3d 768 (6th Cir. 2002), cert. denied, 537 U.S. 1148, 154 L. Ed. 2d 850, 123 S. Ct. 876 (2003)). Likewise, refusal to deal that is designed to protect or further the legitimate business purposes of a defendant does not violate the antitrust laws, even if that refusal injures competition. See Aspen Skiing, 472 U.S. at 604, 105 S. Ct. at 2858; see also NYNEX Corp. v. Discon, Inc., 525 U.S. 128, 137, 119 S. Ct. 493, 499, 142 L. Ed. 2d 510 (1998) (citing Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 225, 113 S. Ct. 2578, 2589, 125 L. Ed. 2d 168 (1993)), [**18] for the proposition that "even an act of pure malice by one business competitor against another does not, without more, state a claim under the federal antitrust laws"); United States Football League v. National Football League, 842 F.2d 1335, 1360 (2d Cir. 1988) (concluding that no § 2 liability existed where network's actions were based on desire "to obtain $ 736 million in rights fees, not to exclude competitors").
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| − | Once the defendant has met its burden to show its valid business justification, the burden shifts to the plaintiff to show that the proffered business justification is pretextual. See U.S. Anchor Mfg., Inc. v. Rule Indus., Inc., 7 F.3d 986, 1002 (11th Cir. 1993); see also Image Technical Servs., Inc. v. Eastman Kodak Co., 125 F.3d 1195, 1212 (9th Cir. 1997).
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| − | In this case, PGA met its business justification burden by showing that it seeks to prevent Morris from "free-riding" on PGA's RTSS technology. See Cont'l T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36, 55, 97 S. Ct. 2549, 2560, 53 L. Ed. 2d 568 (1977) (stating that prevention of "free-riding" by competitors is a legitimate business [*1296] purpose); [**19] Consultants & Designers, 720 F.2d at 1559 (concluding that defendant "had a legitimate interest in protecting from opportunistic appropriation its investment in acquiring the information necessary to carry on its business"). To achieve its business purpose, PGA has refused to grant Morris access to PGA tournaments unless Morris agrees not to sell the product of PGA's proprietary RTSS - compiled real-time golf scores - to noncredentialed third-party internet publishers. Morris responds that it has a right to sell such product notwithstanding that RTSS was developed and paid for, and is operated by, PGA. n13 We disagree with Morris. The compiled real-time golf scores acquired through RTSS are not a product that Morris has a right to sell because they are a derivative product of RTSS, which PGA owns exclusively. n14 We agree with the district court that PGA "has a right to sell or license its product, championship golf, and its derivative product, [compiled] golf scores, on the Internet in the same way the [PGA] currently sells its rights to television broadcasting stations." Morris Communication Corp. v. PGA Tour, Inc., 235 F. Supp. 2d 1269, 1282 (M.D. Fla. 2002). [**20]
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| − | n13 Morris also argues that PGA is not allowed to put restrictions on the dissemination of the compiled golf scores once they reach the media center because PGA did not previously put any restrictions on their dissemination. This argument is unpersuasive. PGA has a right to control its property interest in its RTSS and the compiled golf scores, which are the product of RTSS, regardless of its past practices. As the district court stated: "what [PGA] say[s] the delay should be and what delay [PGA] can legally impose are two different things perhaps." [R. Vol. 10 at p. 104.] The lack of prior restrictions is merely indicative of PGA's symbiotic relationship with the media.
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| − | n14 Morris stated in the district court that it was "not disputing that [PGA] may have a property right." [R. Vol. 10 at p. 93.] As counsel for PGA stated at the hearing on the preliminary injunction: "without this elaborate, comprehensive system there wouldn't be real-time scores that Morris would like to sell to third parties. It just wouldn't be there because these don't exist in the air." [R. Vol. 8 at p. 31.]
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| − | If Morris wishes to sell PGA's product, it must first purchase it from PGA. See Consultants & Designers, 720 F.2d at 1559 (explaining that plaintiff did not have the right to abrogate defendant's property interest). Section 2 of the Sherman Act does not require PGA to give its product freely to its competitors. See Seagood Trading Corp. v. Jerrico, Inc., 924 F.2d 1555, 1573 (11th Cir. 1991) (stating that it "is not a function of the antitrust laws" to equip plaintiffs with defendants' competitive advantages). PGA is willing to sell its product to its competitors, including Morris, thereby allowing credentialed media organizations like Morris to syndicate compiled real-time golf scores after paying a licensing fee to PGA. Accordingly, we conclude from the record that PGA has satisfied its burden to show a valid business justification.
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| − | D. Business Justification Is Not Pretextual
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| − | Because PGA has met its burden of showing that its asserted business justification is valid, the burden shifts to Morris to allege facts that support an inference that the proffered justification is merely pretextual, thereby establishing genuine issues of material [**22] fact. U.S. Anchor Mfg., 7 F.3d at 1002; see also Image Technical Servs., 125 F.3d at 1212. Morris argues that PGA's only justification for its refusal to deal with Morris on Morris's terms is economic and such sole motivation is not a valid business justification; thus, PGA's justification is pretextual. See LePage's, 324 F.3d at 163 ("Defendant's assertion that it acted in furtherance of its economic interests does not constitute the type of [*1297] business justification that is an acceptable defense to § 2 monopolization.").
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| − | Morris supports its argument with a series of cases which are fundamentally distinguishable from this case. In the cases upon which Morris relies, the plaintiffs alleging antitrust violations had created with their own work and efforts, or purchased with their own money, their very own products that defendants prohibited them from selling. See, e.g., Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451, 485, 112 S. Ct. 2072, 2092, 119 L. Ed. 2d 265 (1992) (plaintiffs "invest substantially . . . in parts inventory"); Aspen Skiing, 472 U.S. at 587-88, 105 S. Ct. at 2850 [**23] (plaintiff developed and maintained its own competitive ski resort and ski packages); Lorain Journal Co. v. United States, 342 U.S. 143, 149-50, 72 S. Ct. 181, 184-85, 96 L. Ed. 162 (1951) (injured competitor trying to sell its radio air time for advertisements); Int'l News Serv. v. Associated Press, 248 U.S. 215, 221, 39 S. Ct. 68, 69, 63 L. Ed. 211 (1918) (plaintiff "gathers in all parts of the world, by means of various instrumentalities of its own, by exchange with its members, and by other appropriate means, news and intelligence of current and recent events of interest to newspaper readers"); LePage's, 324 F.3d at 144 (plaintiff selling its own transparent tape); Microsoft Corp., 253 F.3d at 63 (injured competitors deterred from selling their own computers and browsers); Nat'l Basketball Ass'n v. Motorola, Inc., 105 F.3d 841, 854 (2d Cir. 1997) (analyzing free-riding issues and noting that plaintiff did not free-ride because it used its own efforts to conduct business); U.S. Anchor Mfg., 7 F.3d at 990 (plaintiff manufactures and supplies anchors); Trans Sport, Inc. v. Starter Sportswear, Inc., 964 F.2d 186, 187 (2d Cir. 1992) [**24] (plaintiffs purchased product from defendants).
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| − | Morris refers to this distinction as PGA's "sweat of the brow" defense and correctly states that it is not a defense in a copyright case. Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., Inc., 499 U.S. 340, 359-60, 111 S. Ct. 1282, 1295, 113 L. Ed. 2d 358 (1991) (concluding that "sweat of the brow" is no defense in a copyright case). [Appellant Br. at 53-55.] This well-established rule of copyright law is irrelevant, however, in this antitrust case. The "sweat of the brow" product, to which Morris (and the district court) refer, is no different than, for example, the interconnection services in Verizon Communications, 124 S. Ct. at 876, the job shoppers in Consultants & Designers, 720 F.2d at 1555, and the sports jackets in Starter Sportswear, 964 F.2d at 187.
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| − | Moreover, even if we overlook the fundamental and dispositive distinction between this case and the cases cited by Morris, the case law supports summary judgment in favor of PGA. See Verizon Communications, 124 S. Ct. at 879 ("Aspen Skiing is at or near the outer boundary of § 2 liability"); [**25] Aspen Skiing, 472 U.S. at 593-94, 105 S. Ct. at 2852-53 (defendant refused to accommodate and cooperate with plaintiff, refused to sell its product to plaintiff, and acted contrary to its own economic interests in order to eliminate plaintiff); Otter Tail Power Co. v. United States, 410 U.S. 366, 370-72, 93 S. Ct. 1022, 1026-27, 35 L. Ed. 2d 359 (1973) (defendant was already in the business of selling a service to certain customers and refused to sell the same service to certain other customers); Lorain Journal, 342 U.S. at 148-49, 72 S. Ct. at 183-84 (defendant refused to sell to plaintiff in violation of the Sherman Act); Starter Sportswear, 964 F.2d at 189-91 (holding, in a factually analogous case, that defendant had valid business justification for refusal to deal); Fishman v. Estate of Wirtz, 807 F.2d 520, 562 (7th Cir. 1986) (holding defendant liable under § 2 for refusing to lease Chicago Stadium to plaintiff).
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| − | [*1298] The relevant law supports our conclusion that Morris's argument is unavailing and does not show that PGA's business justification is pretextual. The prevention [**26] of free-riding, which is an inherently economic motivation, provides a valid business justification on the facts presented here. Accordingly, Morris has not raised any issues of material fact and summary judgment in favor of PGA was proper. See Int'l Rys. of Cent. Am. v. United Brands Co., 532 F.2d 231, 239-40 (2d Cir.), cert. denied, 429 U.S. 835, 50 L. Ed. 2d 100, 97 S. Ct. 101 (1976) (stating that proof of a company's reasonable steps to preserve its business interests does not, without more, raise a genuine issue of material fact under § 2).
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| − | E. Morris's Rule 60(b) motion
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| − | Relief pursuant to Rule 60(b)(2) is appropriate only if the moving party offers newly discovered evidence that could alter the outcome of the trial. See Wilson v. Thompson, 638 F.2d 801, 804 (11th Cir. 1981); Fed. R. Civ. Pro. 60(b)(2). Because we review the district court's decision for abuse of discretion, "it is not enough that a grant of the motion might have been permissible or warranted." Fackelman v. Bell, 564 F.2d 734, 736 (5th Cir. 1977). After reviewing the record, we conclude that the district court [**27] did not err in finding that the new TOS evidence would have failed to alter the outcome of the trial in light of PGA's valid business justification for its regulations. Accordingly, we hold the district court did not abuse its discretion when it denied the Rule 60 motion.
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| − | IV. CONCLUSION
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| − | Contrary to Morris's argument regarding copyright law, this case is not about copyright and the district court did not find the golf scores to be trade secrets. n15 The district court correctly found that a company - even a monopolist company - that expends time and money to create a valuable product does not violate the antitrust laws when it declines to provide that product to its competitors for free. PGA has accommodated Morris at every step along the way, has agreed to sell its product to Morris, and has acted appropriately to protect its economic interests and investments. Yet Morris demands that it be given access to the product of PGA's proprietary RTSS, without compensating PGA, so that Morris can then sell that product to others for a fee. That is the classic example of "free-riding," the prevention of which, under antitrust law, constitutes a legitimate pro-competitive reason [**28] for imposing a restriction. For the foregoing reasons, we affirm the district court's grant of summary judgment in favor of PGA and the district court's order denying Morris's Rule 60(b) motion.
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| − | n15 "The [PGA]'s property right does not come from copyright law, as copyright law does not protect factual information, like golf scores." Morris Communications, 235 F. Supp. 2d at 1281.
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| − | AFFIRMED.
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| − | == Funding IT ==
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| − | Dr. Lazowska’s lecture was very informative and useful. However, one complaint that must be raised is that an actual suggestion for a budget cut was not explicitly stated. Instead, we saw how some fields/programs might be over funded- with special attention being given to farm subsidies.
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| − | Farm subsidies happen to be the major criticism of practically every academic at UC Berkeley. Every field/subject/department/program that doesn’t get funding decides to attack the farm subsidies. There is little doubt that this government spending is wasteful, but since these small states have equal representation in the senate, they are likely to stay. This means that a proposal must be given for cutting the budget of other programs and government agencies.. Dr. Lazowska should do his best to give a fair solution without worrying about offending anyone. Going after farmers is the easy way out!
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| − | -Stuart Schimler
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| − | UC Berkeley 2006
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| − | == Re:Farm subsidies! ==
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| − | Farm subsidies are admittedly a step backwards in promoting progress-of any kind.However,especially in primarily agrarian countries like India, farm subsidies form a significant portion of the Govt.'s annual expenses. This is crucial for the Govt.'s survival and re-election and therefore, cannot even be negotiated or reduced.
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| − | In the last class,Dr.Lazowska made a very strong case for federal funding in IT research.In a situation like in India, however,where federal funding for research is definitely reducing, I do feel that funding for research has to be sourced from industry. The US, being primarily an industrial society, can maybe afford to pour funds into research at the expense of some farm subsidies. In economies like India, this may not be as easy - especially if, like in India, the economy is trying to move from a majority agrarian to a majority industrial economy. Therefore, i assert that the idea of federal funding, while inherently making sense , may have to be shelved in the face of ground realities which vary across the world. This , in my view, points to a need for greater involvement of industry in funding IT research.
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| − | What do you ppl think?
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| − | -Kiran,
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| − | UCSD
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Welcome to the Discussion Page for CSE590TU. This is for general comments and announcements for the class. If you have a comment on a specific topic or lecture, please visit the lecture-specific page. Please use the + sign in the top of the screen to add comments to the page.
Nicholas Carr will be speaking on Does IT Matter on Thursday, Nov 4 in 113/1021. [apardoe]
(This is about a reading for lecture 4, but there isn't a section for that yet ...)
I am a little confused on what is fair use, though. I think parody is always fair use. From what I heard around JibJab's case, satire is never fair use. Searching on FindLaw.com [2], I got the impression that there was no meaningful distinction. Wikipedia [3] suggests that satire can be fair use [4], depending on circumstances, but has a tougher burden of proof because "the satirist's ideas are capable of expression without the use of the other particular work" [5].
There is no presumption of fair use with respect to parody or satire. Based on the result of the Supreme Court case Campbell v. Acuff-Rose Music, Inc. ("Oh Pretty Woman" Roy Orbison song parodied by 2 Live Crew - Supreme Court held: fair use), one may conclude that all transformative parody will likely be deemed fair use under section 107. However, the Supreme Court emphasized that parodies are not entitled to a fair use presumption and that each fair use factor under section 107 must be analyzed based on the context of the situation.
Therefore, the fair use implications of parody and satire must be made on a case by case basis analyzing the four fair use factors of Section 107: (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purpose; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.
Looking at the factors, parody requires the original copyrighted work to make its point by defininition, and therefore a parody has a basis to use the original work. However, satire theoretically can stand on its own without the copyrighted work, which requires some justification for the act of using the copyrighted work in the first instance.
