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Comment by sandworm101 | Hacker News Reader

Fyi, for anyone that has paid for a license. The fact that the copyright is dead does not necessarily mean licensing contracts are also void.

The obligations of contracts can and sometimes do survive the disappearance of underlying IP rights. If someone agreed to pay Warner 10$ for the right to sing Happy Birthday each time their movie airs on TV, that contract is likely still in effect. Consideration (what one party gives in a contract) is measured at the point of formation, not years later. An agreement to not to sue someone is not premised on the validity of that theoretical lawsuit. An agreement to not attempt something is still an agreement even if said attempt would prove futile. There are cases where a contracting party has been forced to shell out for something anyone else could use for free. So if anyone reading this has signed a licensing agreement, talk to your lawyer before ripping it up.

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"Fyi, for anyone that has paid for a license. The fact that the copyright is dead does not necessarily mean licensing contracts are also void. "

Well, this is true for copyrights, but 100% false for patents. You cannot collect royalties for expired patents, for example. Attempts to do so by contract are void.

But you can keep royalties received on patents that are later found to be invalid, which I think is what the parent is trying to say.

Yes. And if you have an agreement that makes no mention of the patent, that just says "I will give you money every time I sell a product" then you may still have to shell out long after the patent has expired. Everyone is free to draft contracts between parties going well beyond the limits of IP law.

That means the payer is getting something else besides the right to use the patent. So whatever product or service the payee is providing, they have to continue providing it even though their patent is invalid. That doesnt seem like such a problem, except for the fact that when the contract was drafted, there may have been less competition for the service the payee offered.

You have to actually get something in return for this to be a valid contract. If it's not IP rights, what is it?

Because otherwise, i'd just breach the contract. In fact, this is what has happened in numerous cases.

Sure, but actually, most patent agreements that get signed nowadays include clauses to deal with this :)

You can via contract. If I invent a new super-viagra, I can ask a drug company to pay me 1$ for each pill they sell in perpetuity. That contractual obligation could survive the patent expiring and maybe a drug company would take that deal in exchange for them being the first on the market.

100% false if these are found to be patent royalties.

This was most recently reaffirmed in June when the supreme court denied cert in Kimble v. Marvel.

This rule has been in place since Brulotte et al. v. Thys Co., which addressed this question square on.

Past that you are basically saying "you can try to contract around and pretend it's not patent royalties"

This is, of course, true in theory, but this doesn't really work in practice.

This is why patent trolls and others don't actually do it. Because a judge will look at you sideways, and then just let me out of the agreement or give you no damages when i breach it.

Which is why one must be careful in wording agreements to make sure they are license agreements (renting a thing) rather than forbearance (promise not to sue). Now if I were working for someone who had a shady possibly invalid copyright, I might attempt to draft a forbearance-style agreement. I've been hunting around for HappyBirthday agreements to check for this but haven't found any recent actual documents, just summaries.

> The fact that the copyright is dead does not necessarily mean licensing contracts are also void.

i.e. licensing something you don't own and have no rights to is fine, legally speaking.

The more I learn about the law, the more bizarre it is.

Which is probably why they mentioned starting a class action lawsuit based on this ruling.

Any citations?

Why would I agree to pay someone per performance, instead of paying someone for a license to each performance?

If I break the license agreement, Warner can void my license, and then pursue their copyright claim against me.

The classic case involves the mouthwash Listerine. The guy who invented it kept it as a trade secret (no patent). He formed a contract with a manufacturer that said, in short, that they would pay him money for each bottle sold using the formula. They all thought this would go on forever. But then the secret got out and others started selling products using the same formula. Since there was no tradesecret anymore the manufacture argued the contract was void. It wasn't.

"But that does not mean that one who acquires a secret formula or a trade secret through a valid and binding contract is then enabled to escape from an obligation to which he bound himself simply because the secret is discovered by a third party or by the general public."

Warner-Lambert v. Reynolds 178 F. Supp. 655 (1959) http://law.justia.com/cases/federal/district-courts/FSupp/17...

Now this is tradesecret, not copyright, and an old case, but the principal remains. Contracts can be drafted between parties that go beyond the rights created by IP law. Any attorney worth his wage learned of this quirk of contract law during school and should have drafted any licensing agreements to accommodate ... but just maybe they didn't.

But in the case of Happy Birthday licenses the contract would have been agreed to on false pretense, wouldn't that count for something?

Looks like a fine line - it seems elsewhere sandworm is pointing out that Warner would have to engage in fraud, or willful deception, in order to validate the contract.

The wrinkle I'd like to consider is that if Warner provided the evidence during discovery that was material to the copyright being ruled abandoned, meaning it was in their possession all along, then does willful ignorance manifested in strong-arming payment for the rights to lyrics un-owned matter? Hmmm.

They did. Very late. And they most likely deliberately 'smeared' the one part of the page that showed that they had, all along, evidence that they did not own the copyright.

It seems the takeaway is that if you're going to sign a contract because you're concerned about copyright/patent infringement, then you should get an IP lawyer because law is weird (and also make sure they're aware if you think there's an question about the validity of the copyright/patent claim).

On the other hand there's now the option to pursue them in court for recovery of all the royalties already paid, since they didn't have the right to claim them in the first place. I think we'll be seeing a lot of that in the near future.

Only if they sold something they knew they did not own. Then there is a debate re fraud. But such arguments only work where they attempted to sell an actual license. If they simply agreed not to sue, forbearance rather than license, those contracts may well remain valid.

Not a lawyer, but here's how I see it:

Lawsuit: "You approached me and gave me false information that has cost me money. Pay me to cover all my losses resulting from this false information."

How (or even whether) the defendent benefited from the losses doesn't even need to come into it, as far as I can tell.

While I think what you are saying is true it would depend on whether the wording of the contract said they owned the copyright. I guess that's what you meant by "does not necessarily mean".

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