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Practice Management Information Corporation (“Practice Management”) appeals from a partial summary judgment and preliminary injunction forbidding it from publishing a medical procedure code copyrighted by the American Medical Association (“the AMA”). 1

Over thirty years ago, the AMA began the development of a coding system to enable physicians and others to identify particular medical procedures with precision. These efforts culminated in the publication of the Physician’s Current Procedural Terminology (“the CPT”), on which the AMA claims a copyright.

The current edition of the CPT identifies more than six thousand medical procedures and provides a five-digit code and brief description for each. The CPT is divided into six sections—evaluation, anesthesia, surgery, radiology, pathology, and medicine. Within each section, procedures are arranged to enable the user to locate the code number readily. In the anesthesia section, procedures are grouped according to the body part receiving the anesthetic; in the surgical section, the procedures are grouped according to the body system, such as the digestive or urinary system, on which surgery is performed. The AMA revises the CPT each year to reflect new developments in medical procedures.

In 1977, Congress instructed the Health Care Financing Administration(“HCFA”) to establish a uniform code for identifying physicians’ services for use in completing Medicare and Medicaid claim forms. Rather than creating a new code, HCFA contracted with the AMA to “adopt and use” the CPT. The AMA gave HCFA a “non-exclusive, royalty free, and irrevocable license to use, copy, publish and distribute” the CPT. Id. p 3(a). In exchange, HCFA agreed “not to use any other system of procedure nomenclature ... for reporting physicians’ services” and to require use of the CPT in programs administered by HCFA, by its agents, and by other agencies whenever possible.

HCFA published notices in the Federal Register incorporating the CPT in HCFA’s Common Procedure Coding System, and adopted regulations requiring applicants for Medicaid reimbursement to use the CPT.

Practice Management, a publisher and distributor of medical books, purchases copies of the CPT from the AMA for resale. After failing to obtain the volume discount it requested, Practice Management filed this lawsuit seeking a declaratory judgment that the AMA’s copyright in the CPT was invalid for two reasons: (1) the CPT became uncopyrightable law when HCFA adopted the regulation mandating use of CPT code numbers in applications for Medicaid reimbursement, and (2) the AMA misused its copyright by entering into the agreement that HCFA would require use of the CPT to the exclusion of any other code. The district court granted partial summary judgment for the AMA and preliminarily enjoined Practice Management from publishing the CPT. Practice Management appeals.

Practice Management’s argument that the CPT became law and entered the public domain when HCFA by regulation required its use rests ultimately upon Banks v. Manchester, 128 U.S. 244, (1888), which held that judicial opinions are uncopyrightable. Banks in turn rests upon two grounds, neither of which would justify invalidation of the AMA’s copyright.

The first ground for the Banks holding that judicial opinions are not subject to copyright is that the public owns the opinions because it pays the judges’ salaries. The second is that as a matter of public policy, “the whole work done by the judges constitutes the authentic exposition and interpretation of the law, which, binding every citizen, is free for publication to all....”

The first ground is clearly not applicable to the CPT. The copyright system was not significant in Banks because judges had no proprietary interest in their opinions. The copyright system is of central importance in this case because the AMA authored, owns, and maintains the CPT and claims a copyright in it.

The copyright system’s goal of promoting the arts and sciences by granting temporary monopolies to copyrightholders was not at stake in Banks because judges’ salaries provided adequate incentive to write opinions. In contrast, copyrightability of the CPT provides the economic incentive for the AMA to produce and maintain the CPT. “To vitiate copyright, in such circumstances, could, without adequate justification, prove destructive of the copyright interest, in encouraging creativity,” a matter of particular significance in this context because of “the increasing trend toward state and federal adoptions of model codes.” As the AMA points out, invalidating its copyright on the ground that the CPT entered the public domain when HCFA required its use would expose copyrights on a wide range of privately authored model codes, standards, and reference works to invalidation.5 Non-profit organizations that develop these model codes and standards warn they will be unable to continue to do so if the codes and standards enter the public domain when adopted by a public agency.

The second consideration underlying Banks—the due process requirement of free access to the law—may be relevant but does not justify termination of the AMA’s copyright. There is no evidence that anyone wishing to use the CPT has any difficulty obtaining access to it. Practice Management is not a potential user denied access to the CPT, but a putative copier wishing to share in the AMA’s statutory monopoly. Practice Management does not assert the AMA has restricted access to users or intends to do so in the future.

The AMA’s right under the Copyright Act to limit or forgo publication of the CPT poses no realistic threat to public access. The AMA has no incentive to limit or forgo publication. If the AMA were to do so, HCFA would no doubt exercise its right to terminate its agreement with the AMA. Other remedies would also be available, including “fair use” and due process defenses for infringers, and, perhaps most relevant, mandatory licensing at a reasonable royalty could be required in light of the great public injury that would result if adequate access to the CPT were denied.

The Supreme Court has not considered a case in which the author asserted a proprietary interest in material adopted by the government as law. However, the First and Second Circuits have declined to enjoin enforcement of private copyrights in these circumstances.

We are not prepared to hold that a state’s reference to a copyrighted work as a legal standard for valuation results in loss of the copyright. While there are indeed policy considerations that support CCC’s argument, they are opposed by countervailing considerations. For example, a rule that the adoption of such a reference by a state legislature or administrative body deprived the copyright owner of its property would raise very substantial problems under the Takings Clause of the Constitution. We note also that for generations, state education systems have assigned books under copyright to comply with a mandatory school curriculum. It scarcely extends CCC’s argument to require that all such assigned books lose their copyright—as one cannot comply with the legal requirements without using the copyrighted works. Yet we think it unlikely courts would reach this conclusion. Although there is scant authority of CCC’s argument, Nimmer’s treatise opposes such a suggestion as antithetical to the interests sought to be advanced by the Copyright Act.

For the reasons we have stated earlier, as well as those relied upon by the First and Second Circuits, we affirm the district court’s conclusion that the AMA’s copyright in the CPT should be enforced.

Practice Management argues that the AMA misused its copyright by negotiating a contract in which HCFA agreed to use the CPT exclusively. We have implied in prior decisions that misuse is a defense to copyright infringement. See Triad Sys. Corp. v. Southeastern Express Co., 64 F.3d 1330, 1337 (9th Cir.1995); Supermarket of Homes, Inc. v. San Fernando Valley Bd. of Realtors, 786 F.2d 1400, 1408 (9th Cir.1986). We now adopt that rule.

On the undisputed facts in the record before us, we conclude the AMA misused its copyright by licensing the CPT to HCFA in exchange for HCFA’s agreement not to use a competing coding system. The AMA argues it did not insist HCFA use only the CPT; rather, HCFA decided to use a single code to take advantage of natural efficiencies. However, the plain language of the AMA’s licensing agreement requires HCFA to use the AMA’s copyrighted coding system and prohibits HCFA from using any other. The exclusivity requirement is a part of the consideration in exchange for which the AMA agreed to grant HCFA a “non-exclusive, royalty free, and irrevocable license to use, copy, publish and distribute” the CPT. Although HCFA apparently had nothing to gain from inclusion of the exclusivity provision, which side urged its inclusion is of no consequence. Cf. Anchor Serum Co. v. Federal Trade Comm., 217 F.2d 867, 870 (7th Cir.1954) (rejecting argument that exclusive dealing contract did not violate section 3 of the Clayton Act because buyer initiated negotiations and seller did not impose the contract terms on buyer). The controlling fact is that HCFA is prohibited from using any other coding system by virtue of the binding commitment it made to the AMA to use the AMA’s copyrighted material exclusively. The absence of the agreement would not preclude HCFA from doing what the AMA suggests would be proper—deciding on its own to use only the AMA’s system. What offends the copyright misuse doctrine is not HCFA’s decision to use the AMA’s coding system exclusively, but the limitation imposed by the AMA licensing agreement on HCFA’s rights to decide whether or not to use other forms as well. Conditioning the license on HCFA’s promise not to use competitors’products constituted a misuse of the copyright by the AMA.

The adverse effects of the licensing agreement are apparent. The terms under which the AMA agreed to license use of the CPT to HCFA gave the AMA a substantial and unfair advantage over its competitors. By agreeing to license the CPT in this manner, the AMA used its copyright“in a manner violative of the public policy embodied in the grant of a copyright.”

The AMA argues the copyright misuse defense fails because Practice Management did not establish an antitrust violation. We agree with the Fourth Circuit that a defendant in a copyright infringement suit need not prove an antitrust violation to prevail on a copyright misuse defense.

We also reject the AMA’s argument that the Noerr-Pennington doctrine immunized its actions. Because Practice Management need not establish an antitrust violation, we need not consider the AMA’s antitrust defenses. Moreover, because the AMA did not lobby HCFA to adopt the CPT, the AMA’s First Amendment right to petition the government is not at stake.

We affirm the district court’s ruling that the AMA did not lose its copyright when use of the CPT was required by government regulations, but reverse the ruling with respect to copyright misuse. We hold that Practice Management established its misuse defense as a matter of law, vacate the preliminary injunction, and remand for entry of judgment in favor of Practice Management.