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Where
does the law draw a line between the U.S. Copyright Act,
on the one hand, and state law, on the other? When can
a plaintiff bring a state law cause of action for a claim
that relates to a work that falls within the subject matter
of copyright? When are such claims pre-empted by the Copyright
Act? These are not idle, procedural questions. The answers
to these questions often determine whether or not the
plaintiff's state law claim lives or dies, yet the case
law is in chaos on these issues, and there is, to date,
no logical, rational analysis to determine the answers.
Let's
start with the basics. The U.S. Copyright Act provides
extensive protections for "works of authorship fixed in
any tangible medium of expression." [1] This definition
covers works that are recorded in some permanent form,
such as books, tape recordings, films, and pictures. Throughout
this article, such works will be referred to as "Tangible
Works." Tangible Works may not qualify for copyright protection
for a host of reasons, including:
·
The tangible work must be "original" (although a very
low level of originality is required). [2]
·
The term of copyright protection may have expired. [3]
·
The Tangible Work may contain only unprotectable ideas.[4]
While a specific "expression" of an idea is protectable,
ideas themselves are not protected under the Copyright
Act.
·
The Tangible Work may have entered the public domain
through acts of the owner.
Each
of these exceptions is worthy of a separate article, but
the point here is simply that not all Tangible Works are
entitled to copyright protection. If a Tangible Work does
qualify for copyright protection, the owner of the copyright
to the Tangible Work is granted the exclusive right to exploit
the work in the following specified ways: [5]
·
To prepare derivative works. These are other Tangible
Works that are based upon or substantially similar
to the original Tangible Work.
·
To distribute copies of the Tangible Work by sale,
leasing or other transfer.
·
To perform the Tangible Work.
·
To display the Tangible Work.
·
To reproduce the Tangible Work.
Again,
this is a brief summary of a complex area of law, but
the point is that the owner of the copyright to a protected
Tangible Work is granted specific exclusive rights, and
these rights are not all-encompassing. To pick only one
example, the owner of the copyright does not have the
right to prohibit public burnings of copies of the Tangible
Work. For purposes of this article, the exclusive rights
granted by the Copyright Act will be referred to as the
"Exclusive Rights."
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2.
STATUTORY BASIS FOR PREEMPTION
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The
specific statutory basis for preemption is section 301(a),
which provides as follows:
On
or after January 1, 1978, all legal or equitable rights
that are equivalent to any of the exclusive rights within
the general scope of copyright as specified by section
106 in works of authorship that are fixed in a tangible
medium of expression and come within the subject matter
of copyright as specified by sections 102 and 103, whether
created before or after that date and whether published
or unpublished, are governed exclusively by this title.
Thereafter, no person is entitled to any such right or
equivalent right in any work under the common law or statutes
of any State.
In
summary, the Copyright Act provides that no state may
provide protections (statutory or common law) for Tangible
Works that are equivalent to the Exclusive Rights. Several
important observations:
·
As discussed above, not all Tangible Works qualify for
copyright protection, but the statute preempts state
laws even when the Tangible Work does not
qualify for copyright protection.
·
The statute does not preempt all state laws that
relate to Tangible Works; it only preempts state laws
that provide "equivalent rights" to any of the Exclusive
Rights.
·
The statute applies to all state laws, whether common
law or statutory.
There
is also a broader concept of copyright preemption that
applies merely by virtue of the existence of the Copyright
Act itself. That is, it is clear that Congress intended
to "occupy the field" of copyright protection by enacting
the Copyright Act, even apart from the specific provisions
of section 301(a). However, the case law analysis of preemption
has been substantially identical whether the courts view
the issue under the specific provisions of section 301(a)
or under the broader Copyright Act implied preemption
approach.
If
copyright preemption does not apply, the plaintiff can
bring a state law claim. The plaintiff may also be
able to bring a copyright claim as well. In other words,
while a finding of copyright preemption means a claim
must be brought under the Copyright Act or not at all,
a finding of no copyright preemption permits any manner
of claim to be brought, including a Copyright Act claim
(if one exists).
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The
treatise Nimmer on Copyright is the bible of
copyright law. Indeed, it is rare to find a decision
dealing with copyright where that treatise is not
cited. Thus, it is not surprising that the courts
have turned to that treatise in cases analyzing copyright
preemption, and the analysis provided in that treatise
has become known as the "extra element" test. In essence,
it states that a state law relating to protection
of a Tangible Work is preempted by the Copyright Act
unless liability under the state law requires
some "extra element" that goes beyond the Exclusive
Rights. The problem with this test is that it does
not provide any real guidance to the courts. There
is always some difference between the state
law and the Copyright Act, so a court that wants to
avoid preemption can always find some difference,
however small, that is the "extra element" needed
to avoid preemption. The net result is that courts
seem to first decide independently whether or not
they think preemption should apply, and then label
the result accordingly. When there is preemption,
no "extra element" is found, and when there is no
preemption, it is. Thus, the "extra element" test
has proved circular in practice, and the cases are
ad hoc, inconsistent, or wrong.
The
goal of this article is to suggest a framework of
analysis, with the long-term goal (I can dream, can't
I?) of creating some consistency in the case law on
this issue.
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4.
SUGGESTED PREEMPTION ANALYSIS
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The
simplest way to summarize my suggested preemption analysis
is to review the flow chart below or SEE
the PDF format of the flow chart.
Preemption
Analysis
1.
Does the claim involve a "Tangible Work"? [1f]>>>>>>>>>>>>>>>
NO >>>>V
V
V
V
V
YES V
V
V
V
V
2. Is plaintiff the owner of any exclusive rights to the
Tangible Work?>>>> NO >>V
V V
V V
YES V
V V
V V
3. Does the act complained of come within the "Exclusive
Rights" [2f]
with respect
to the Tangible Work? >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
NO >>>>>V
V
V
V
V
YES V
V
V
V
V
4. Is the action based on actual contract (express or
implied-in-fact)
or breach of express trust? >>>>>>>>>>>>>>>>>>>>>>>>>>>>
YES>>>>>V
V
V
V
V
NO V
V
/
V /
[Copyright Act Preemption]
[No
Preemption] [3f]
As
set forth on the flow chart, the first inquiry should
be whether the claim involves a Tangible Work. This may
seem self-evident, but it is at least worth making this
initial inquiry for precision. With minor exceptions,
if there is no Tangible Work in sight, then copyright
preemption can not apply. Again, it is important to emphasize
that this analysis applies even if the Tangible Work is
not protected by the Copyright Act.
The
next inquiry (and the one most often lacking in the courts'
analyses) is whether the plaintiff is the owner of any
exclusive rights to the Tangible Work, since copyright
preemption should only apply in that case. Some examples
will highlight this logic:
If
I take a picture of my law school students and use it
to market a new brand of soup (by putting their picture
on the label, and calling it "Smart Soup"), the students
are not the owner of any exclusive rights to the Tangible
Work (the picture), so when they sue me under state law
(presumably for violation of their right of publicity),
this claim should not be preempted by the Copyright
Act. This point seems self-evident, but in a remarkably
bad decision, the Seventh Circuit held that copyright
preemption prohibited baseball players from bringing a
right of publicity claim based on television broadcasts
of their games. [6] It appears that the court desperately
wanted to rule against the baseball players and grasped
at straws in coming up with the copyright preemption rationale.
What the court should have done is to rule that the right
of publicity claim was not preempted by the Copyright
Act, but the baseball players should have lost on the
theory of implied consent to the broadcast. Professional
baseball players can hardly say that they did not know
the games would be broadcast when they signed on. Unfortunately,
the stated rationale of the case has worked its way into
other cases, and even the venerable Judge Kozinsky of
the Ninth Circuit relied on it in his dissent in a case
that upheld a right of publicity claim by the actors in
"Cheers." [7]
Here
are some other examples:
-
Assume
that an enthusiastic film producer has a great idea
for a film that she has never written down, and she
tells this great idea to a studio executive over lunch.
The studio executive then goes back to his office and
writes a script based on the idea and proceeds to make
a film based on the script. The producer then brings
a state law claim (alleging misappropriation, conversion,
unjust enrichment, fraud, and other nasty things). Putting
aside the question of whether or not the producer
should ultimately win the case, the producer should
not be prohibited from bringing the state law
claim on the basis of copyright preemption, because
the producer does not own any exclusive rights to the
Tangible Work (i.e., either the script written by the
studio executive or the film produced by the studio).
Unfortunately,
the case law to date does not ask whether the plaintiff
is the owner of any exclusive rights to the Tangible Work,
and the case law is rather muddled as a result.
The
next inquiry should be whether or not the act complained
of comes within the Exclusive Rights that are protected
by the Copyright Act (e.g., copying, performing, etc.).
For example, if someone steals a script I wrote, I can
sue them for theft under state law, because the Exclusive
Rights to do not cover stealing a script. As another example,
assume that Bad Company stationed an employee at a baseball
game that was broadcast on television, and the employee
had a mini-cam and recorded the game, which Bad Company
simultaneously broadcast on the Internet. Even though
the baseball team owns the televised broadcast, the acts
Bad Company did not violate the Exclusive Rights with
respect to the televised broadcast. Rather, Bad Company
may have violated the baseball team's rights under state
law to the live game itself. [8]
The
final inquiry should be whether or not the action is based
on contract, in which case it should not be preempted,
since in this case the action is based on rights provided
in the contract, not under state law, so preemption can
not logically apply. However, in order to avoid preemption,
a contract action should be based on an actual contract,
whether written, oral, or implied-in-fact by conduct.
On the other hand, a plaintiff should not be able to side-run
the Copyright Act by alleging a claim based on equitable
notions such as "quasi-contract" or "implied in law" contract,
both of which phrases really mean "no contract." An implied-in-fact
contract requires that the parties by their conduct expressly
reach agreement on all the material terms of the contract.
An implied-in-law contract simply means that the court
finds that it is "unfair" for the defendant not to pay
the plaintiff something, so it is merely another form
of sate law, which is subject to preemption. These two
concepts are obviously light years apart, yet in analyzing
Copyright Act preemption, most courts to date treat them
the same. [9] Similarly, a claim for breach of
express trust (whether written or oral) should not be
preempted by the Copyright Act since this is a species
of contract claim. On the other hand, the term "constructive
trust" really means "no trust" and is simply an equitable
remedy for an otherwise "unfair" result - another form
of state law that is subject to preemption. Again, plaintiffs
should not be able to side-run the Copyright Act with
a claim of "constructive trust," yet to date the courts
have sometimes permitted it.
Let's
try applying the foregoing analysis to several fact patterns:
·
Assume that one news service releases news bulletins,
and another competing news service copies those bulletins
and sells them to its customers. [10] In this
case, the first news service is the owner of exclusive
rights to a Tangible Work (its news bulletin), the act
complained of comes within the Exclusive Rights (copying),
and the action is not based on an actual contract or
express trust. Thus, any state law claim should be preempted
by the Copyright Act (and the first news service should
hopefully win under the Copyright Act).
·
If someone reads "Gone With the Wind" and decides to
write a new book called "The Wind Done Gone" from the
perspective of the slaves, any cause of action brought
by the owner of the original book (a Tangible Work)
should be governed exclusively by the Copyright Act.
The owner of the original book is complaining that the
new book comes within the Exclusive Rights (preparation
of derivative works), and the action is not based on
an actual contract or express trust. Whether the owner
of the original book wins under the Copyright Act is
a difficult question. [11]
·
A film producer submits a written idea to a studio,
and the studio runs off and makes a film based on the
idea. The producer should be limited to a claim under
the Copyright Act based on preemption. The producer
is the owner of exclusive rights to the Tangible Work
(the written submission), and the act complained of
comes within the Exclusive Rights (preparation of a
derivative work). Although several cases have held that
the studio's conduct creates an "implied contract,"
the cases are clearly using that term in the sense of
an implied-in-law contract (i.e., "no contract") and
not under the more rigorous "implied-in-fact" standard
required for an actual contract.
·
Paid actors in a film complain that their right of publicity
is being violated by advertisements for the film. The
actors do not own exclusive rights to the Tangible Work
(the film), so their claim should not be preempted by
the Copyright Act. (However, they better darn well lose
their claim under state law on the basis of implied
consent!).
The
finding that preemption does or does not apply does not
stop the inquiry. If preemption limits a plaintiff to claims
under the Copyright Act, the plaintiff may or may not win
for a variety of factors that depend on the actual claim
and the provisions of the Copyright Act. Similarly, the
fact that the plaintiff is permitted to bring a state law
claim does not mean that the plaintiff will win the
state law claim. Again, winning or losing depends on the
facts and the particular state law right in question. Many
cases incorrectly hold that the plaintiff loses based on
copyright preemption, when the plaintiff should have lost
the state law claim on the merits.
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In
summary, the current case law in this area is a tangled
web that is based on application (or misapplication) of
Nimmer's "extra element" test. For an accurate and consistent
analysis, the courts should apply a multi-step analysis,
as suggested in this article, in order for the case law
to be consistent and predictable in this important area
of law.
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1
Copyright Act section 102(a). Henceforth,
all section references shall be to the Copyright Act unless
otherwise noted.
2 §
102(a).
3 §
302.
4 §
102(b).
5
§ 106.
6
Baltimore Orioles, Inc. v. Major League Baseball
Players Association, 805 F.2d 663 (7th Cir. 1986),
cert. denied, 480 U.S. 941 (1987).
7 Wendt
v. Host International, Inc., 125 F.3d 805 (9th Cir.
1997).
8
For a fascinating case on similar facts, where
the court did not follow this analysis, see National
Basketball Association v. Motorola, Inc., 105 F.3d
841 (2d Cir. 1997).
9 For
a rare case that gets it right and clearly distinguishes
between implied-in-law and implied-in-fact contracts,
see Wrench LLC v. Taco Bell Corp., 256 F.3d 446
(6th Cir. 2001).
10 INS
v. Associated Press, 248 U.S. 215 (1918) (permitting
a state law claim, but before preemption applied).
11
Suntrust Bank v. Haughton Mifflin Co.,
Case Number 01-12200 (11th Cir., May 25, 2001)
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7.
FOOTNOTES FOR PREEMPTION ANALYSIS
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[1f]
"Tangible Work" means tangible works of authorship
under section 102, whether or not protected (e.g., public
domain, term expired, containing only unprotectable ideas,
or not original).
[2f]
"Exclusive Rights" means the exclusive
rights protected under section 106 (e.g., copying, preparing
derivative works, displaying publicly).
[3f]
This does not mean plaintiff wins.
Many cases hold that plaintiff loses because of copyright
preemption, when they should lose on the merits anyway.
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