Lower courts mis-apply precedent, kills uniformity and causes market confusion.

The underlying premise of this review is, presumably, uncontroversial. When citing a higher court for a proposition and applying it in a new context, a lower court must determine whether the higher court's original rational applies. When the higher court warns lower courts to use caution when applying the proposition in a new context, the lower court must heed that caution. Lower courts risk adopting arbitrary and/or random rules by failing to consider the rationale and use caution. The bare citation of a higher court's proposition out of context provides no support for a lower court's conclusion or, for that matter, a lawyer's assertion. Applying a higher court's ruling to a new factual context requires consideration of whether that precedent fits the new circumstances. In Sony, the Supreme Court provided a rationale for apply a patent rule to copyright law and accompanied it with a caution. The rationale was that both patent and copyright law are based on the premise that the primary object of exclusive patent and copyrights is providing the public with the benefits of innovation and original expressive works. To achieve these benefits, intellectual property law awards exclusive rights to inventors and authors. When considering the adoption of a new rule or interpretation, courts should, therefore, consider the balance between incentives to create and society's interest in the free flow of ideas, information, and commerce. Caution must be used, however, to ensure that patent and copyright law are similar enough in their structure and design that treating them the same way is appropriate. The cases cited by the Supreme Court illustrate the balancing process and ways in which the differences between copyright and patent law require different treatment or the similarities permit the transfer of rules from one regime to the other. Thirty-seven cases have cited the historic kinship between copyright and patent law as support for their interpretation of the law. Table I reveals that only two cases, Harris v. Emus Records Corp.17 and In re Independent Service Antitrust Litigation" both apply the Supreme Court's rationale and consider the Supreme Court's caution. Two groups of opinions should also be excluded from the list of those opinions that have abused the Supreme Court's precedent by failing to consider the rationale and use caution when applying the Sony rule. In the first, the lower court is consider the same issue of vicarious liability and substantial non-infringing use the Court was addressing in Sony. If the context does not change in any relevant way, citing the precedent without repeating the analysis is not problematic. Of the thirtyseven cases, three opinions were related to vicarious liability or substantial non-infringing use. These are the vicarious liability cases discussed in Part III, infra. In the second group, the lower court cites the "historic kinship" when facing a legal issue in a context already addressed by an authoritative (higher) court cited by the lower court. Being as generous as possible, perhaps nine cases involving the issue of intellectual property licensing, fall into this category. These are the licensing cases discussed in Part III, infra. In these opinion, a citation to the controlling authority would be sufficient support for applying the rule that higher court borrowed from another regime. There would be no independent need for the lower court to cite Sony, as each of these opinions does. The vast majority of the cases citing the "historic kinship" fail to do so properly. Removing the two cases with adequate analysis, the three cases properly relying on Sony in the vicarious liability context, and the eight licensing cases relying, however adequately, on precedent, leaves almost two-thirds of the cases (twenty-four of thirty-seven) abusing the Supreme Court precedent. This analytical failure may lead to new rules in patent and copyright law that are not determined by reason or principle.