Keith Mack
The issue of contract claims being preempted by copyright law is a complex and inconsistent area of law. The case law on this issue varies across different circuits, with some favoring preemption in breach of contract cases, while others disagree. The key question often revolves around whether the contract claim is 'equivalent' to the rights or remedies provided under the Copyright Act. However, some legal scholars, like Professor Guy Rub, argue that the focus should be on whether contracts undermine federal copyright policies rather than their equivalence to copyright. This approach, known as conflict preemption, involves examining the alignment of state law interests with federal copyright interests and the potential conflicts between them. While the expression of ideas is protected by copyright law, the ideas themselves are generally not, and lawsuits related to idea theft are often based on contract law. The interplay between contract law and copyright law, specifically in the context of preemption, presents a challenging legal landscape that requires careful navigation.
| Characteristics | Values |
|---|---|
| Contract claims preempted by copyright law | Breach of contract claims are often challenged as being preempted by federal copyright law. |
| Copyright law preemption test | Circuit Courts examine whether a breach-of-contract claim includes an "extra element" that makes it qualitatively different from a copyright infringement claim. |
| Examples | ML Genius v. Google, ProCD v. Zeidenberg |
| Federal copyright protection | Section 301(a) of the Copyright Act provides that state law cannot govern legal or equitable rights in copyrightable material if those rights are “equivalent” to the exclusive rights of the Copyright Act. |
| State law protection | State laws are preempted and abrogated for works that fall within the subject matter of copyright as specified in Sections 102 and 103, regardless of publication or copyright status. |
| Common law copyright protection | Section 301(b) preserves common law copyright protection for works that are not fixed in a tangible medium of expression, such as unrecorded choreography or extemporaneous speeches. |
| Contract law and idea theft | While ideas themselves are generally not protected by copyright law, some states allow idea theft lawsuits based on contract law, including implied-in-fact contracts. |
| Implied-in-fact contracts | New York and California courts agree that idea theft claims based on implied-in-fact contracts are not preempted by copyright law, with New York requiring proof of novelty. |
| Tortious interference with contract | The Sixth Circuit found that a plaintiff's tortious interference with a contract claim was not preempted. |
| Bilateral expectation | The Ninth Circuit suggested that an implied contractual right was not preempted due to the plaintiff's "bilateral expectation" of compensation, an essential element. |
| Mutual assent and consideration | The Federal Circuit, applying First Circuit law, suggested that mutual assent and consideration required by a contract claim render it qualitatively different from copyright infringement. |
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What You'll Learn
The 'equivalency' maze of copyright preemption analysis
The concept of preemption in the context of copyright law refers to the idea that certain topics, including copyright, need to be addressed uniformly at a national level rather than varying by state. In the United States, Article I of the Constitution specifically reserves this field to the federal government, "preempting" any substantive state-based involvement.
Section 301 of the Copyright Act of 1976 adds a statutory layer to this constitutional foundation, expressly preempting any state law "equivalent" to copyright. However, determining what is "equivalent" to copyright is a complex and challenging task. This is what Professor Guy Rub refers to as the "fiendishly hard 'equivalency' maze of copyright preemption analysis".
Traditionally, preemption analysis focuses on whether a state law or contract claim is "equivalent" to the rights or remedies under the Copyright Act. This analysis typically involves a two-pronged test: first, examining how closely the state law's interests align with federal copyright interests; and second, looking at the potential conflicts between the state law and copyright. The closer the alignment and the greater the conflicts, the more likely preemption will occur. However, this test has proven challenging to apply consistently, with different circuit courts interpreting and applying the test differently.
Professor Rub proposes a fresh approach to preemption analysis, suggesting that instead of focusing on equivalence, we should evaluate whether contracts or state laws undermine federal copyright policies. This approach, known as "conflict preemption", shifts the focus from a strict comparison of rights and remedies to an examination of the underlying policies and interests at play. By considering the potential conflicts between state laws or contracts and federal copyright policies, this approach offers a more nuanced understanding of preemption and how it should be applied.
In conclusion, the equivalency maze of copyright preemption analysis is a complex and challenging aspect of copyright law. While the traditional approach focuses on the equivalence of rights and remedies, Professor Rub's proposed framework shifts the focus to the potential conflicts between state laws or contracts and federal copyright policies. This fresh perspective offers a helpful path through the maze, providing a more consistent and effective approach to preemption analysis.
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Conflict preemption
The concept of conflict preemption stems from the idea that certain topics, such as copyright, need to be addressed uniformly at a national level rather than varying by state. Article I of the US Constitution reserves specific fields, including copyright, for the federal government, preempting substantive state-based involvement. This is further supported by Section 301(a) of the Copyright Act of 1976, which expressly preempts any state law "equivalent" to copyright.
Professor Guy Rub has proposed a fresh perspective on conflict preemption, suggesting that the focus should shift from simply determining equivalence to evaluating whether contracts undermine federal copyright policies. This approach aims to navigate the complex maze of copyright preemption analysis. According to Professor Rub, conflict preemption analysis involves two key steps. Firstly, it examines how closely the state law's interests align with federal copyright interests. The closer the alignment, the more likely the state law will be preempted. Secondly, it considers the potential conflicts between the state law and copyright. The greater the conflicts, the higher the likelihood of preemption.
For example, if a state law aims to protect unique state-based interests, such as privacy or trade secrets, it is less likely to conflict with federal copyright policy and be preempted. On the other hand, if a state contract claim directly contradicts or interferes with the rights and remedies provided under federal copyright law, conflict preemption is more likely to occur. This analysis provides a nuanced approach to determining when state contract claims are preempted by federal copyright law.
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Common law copyright protection
In the United States, copyright protections are primarily defined and exist by virtue of the federal Copyright Act. Prior to the 1976 amendments to the Copyright Act, there was a legal doctrine called common law copyright law that provided copyright protection based on old English law and state-level copyright laws. Until these amendments, common law copyrights protected unpublished works of authorship, while published works were protected by the earlier versions of the Copyright Act.
Common law copyright law provided two essential protections: the right to prevent others from copying or using unpublished works, and the right to control the first publication of the work. However, after the first publication, common law copyright protections ended, and statutory protections for published works became applicable.
The 1976 amendments to the Copyright Act abolished and preempted the common law and most state laws with respect to copyrights. The Act states that exclusive rights with respect to original works of authorship shall be "governed exclusively" by the Copyright Act, regardless of whether the works are published or unpublished. Despite these amendments, there is still room" for state and common law copyright laws to operate, and occasionally, copyright infringement cases are brought based on a state statute or common law.
Section 301(a) of the Copyright Act governs "legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright". It states that all corresponding state laws, whether common law or statutory, are preempted and abrogated. However, Section 301(b) explicitly preserves common law copyright protection for works that have not been "fixed in any tangible medium of expression". These include unrecorded improvisational works, such as choreography, extemporaneous speeches, and original works of authorship communicated solely through conversations or live broadcasts.
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Contract claims and breach of contract
A breach of contract occurs when one party in a binding agreement fails to deliver according to the terms of the agreement. A plaintiff bringing a lawsuit to court for a breach of contract must first establish that a contract existed between the parties. The simplest way to prove that a contract exists is to have a written document that is signed by both parties. However, some contracts can be oral, partly written and partly oral, or even implied from the situation. Oral contracts, however, must be noted with caution as certain types of agreements will require a written contract to carry any legal weight. These include the sale of goods for more than $500, the sale or transfer of land, and contracts that remain in effect for more than a year after the date when the parties sign the agreement.
Once the existence of a contract is established, the plaintiff must demonstrate how the defendant failed to meet the requirements of the contract. The plaintiff must also show that they themselves performed the duties under the contract. The court will then assess whether there was a legal reason for the breach, such as the defendant claiming that the contract was signed under duress. If the plaintiff shows all of the above, they must then show that they have been damaged in some way and the amount.
The goal of contract law is to ensure that anyone who is wronged is basically left in the same economic position that they would have been in had no breach occurred. If it can be proved that a contract was breached, the remedy would generally be to give the victim what they were initially promised. A breach of contract is not considered a crime or a tort, and punitive damages are rarely awarded for failing to perform promised obligations.
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The role of Circuit Courts
The Circuit Courts play a pivotal role in interpreting and applying the law in cases involving the interplay of contract claims and copyright law. The courts are divided on whether the Copyright Act preempts breach-of-contract claims arising from a contractual promise not to copy. While all circuits employ the same preemption test, examining whether a breach-of-contract claim includes an "extra element" that makes it distinct from a copyright infringement claim, they disagree on the outcome.
For instance, the Second Circuit has generally favoured preemption in breach of contract cases, as seen in ML Genius v. Google, where it agreed that Genius's breach-of-contract claim was preempted by the Copyright Act. The Fifth Circuit appears to lean towards preemption as well. On the other hand, the Seventh Circuit seems to disagree with preemption, as indicated in ProCD v. Zeidenberg. The Ninth Circuit seems to align with the Seventh Circuit's stance.
The Sixth Circuit has positively cited precedent in deciding that a plaintiff's tortious interference with a contract claim was not preempted. The Ninth Circuit has suggested adopting the Sixth and Second Circuit's approach in acknowledging that a case involving an implied contractual right was not preempted due to the plaintiff's "bilateral expectation" of compensation. This "essential element" differentiated the claim from "preempted claims for use of copyrighted material."
The Federal Circuit, applying First Circuit law, has referred to Seventh Circuit precedent, noting that "the mutual assent and consideration required by a contract claim" makes it distinct from copyright infringement. However, in the same case, the Federal Circuit ruled that the breach-of-contract claim was not preempted due to its basis on a license agreement prohibiting reverse engineering.
The Circuit Courts' decisions highlight the complexities and inconsistencies in case law regarding contract claim preemption by copyright law. The courts' interpretations guide lower courts and influence the outcomes of cases involving the intersection of contract law and copyright infringement.
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Frequently asked questions
Preemption in this context refers to the application of federal copyright law over state law or contract law in cases involving copyrighted material.
Preemption typically applies when the rights or remedies being sought under contract law are considered "`equivalent`" to those provided under the Copyright Act. However, there is ongoing debate about the criteria for preemption, with some arguing that the focus should be on whether contracts undermine federal copyright policies rather than their equivalence to copyright.
Yes, there are certain situations where contract claims are not preempted by copyright law. For example, implied-in-fact contract claims for idea theft are not preempted, as they require proof of an implied contract and an implied condition of payment for the use of an idea. Additionally, breach-of-contract claims based on license agreements prohibiting certain activities, such as reverse engineering, may also not be preempted.
