Copyright Law/State Law and Its Preemption

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Copyright Law Treatise
Table of Contents
Copyright Law Outline
History and Background
The Copyright Statutes
Copyright as an Element of Intellectual Property Law
Copyright Office and Judicial Review
The Subject Matter of Copyright
General Principles
The Distinction Between Idea and Expression
Compilations and Derivative Works
Pictorial, Graphic, and Sculptural Works
Pictorial and Literary Characters
Government Works
Duration and Renewal
The Renewal Format
Duration of Copyright Under the 1976 Act
Ownership of Copyright
Initial Ownership of Copyright
Transfer of Copyright Ownership
Termination of Transfers
Copyright Formalities
Formalities Under the 1909 Copyright Act
Copyright Notice Under the 1976 Act
Deposit and Registration
Exclusive Rights of the Copyright Owner
The Right of Reproduction
Reproduction of Music and Sound Recordings
The Right to Prepare Derivative Works
The Right of Public Distribution
The Right of Public Performance
The Right of Public Display
Visual Artists’ Rights
Secondary Liability: Contributory and Vicarious Infringement
Fair Use and Other Exemptions from the Exclusive Rights of the Copyright Owner
Fair Use
Exemptions and Compulsory Licenses
Enforcement of Copyright
Jurisdictional and Procedural Issues
Technological Protection Measures
State Law and Its Preemption
State Anti-Copying Laws
Federal Preemption

State Anti-Copying Laws[edit | edit source]

Throughout the history of copyright law in the United States, the laws of the several states—under a variety of legal theories—have afforded protection against the unauthorized copying or other use of the intellectual creations of others. Most significantly, until 1978, state law generally forbade the unauthorized first printing or public distribution of an unpublished work. This was known as common-law copyright, typically afforded by judicial development but sometimes by state statute. Since the amendment of the Copyright Act, effective January 1, 1978, which extended federal protection to all works from the moment they are “fixed in a tangible medium of expression,”[1] federal copyright has automatically attached to even unpublished works. Under the terms of section 301 of the Act, “no person is entitled to any such right or equivalent right in any such work under the common law or statutes of any State.” Because state common-law copyright afforded relief against conduct—copying or public distribution pure and simple—that is exactly the same as that proscribed by the 1976 Act, Congress determined that the exclusive rights, limitations, remedies, and federal jurisdiction that are provided through the federal act should preempt state copyright law.

There are, however, a number of other state theories that bar one person’s unauthorized use of another’s intellectual product. State laws of unfair competition forbid one person’s “passing off” his or her own work as having been created by another. This theory is frequently applied to prevent the use of a title or a character (or character name) that has become popular in identifying another person’s earlier work. State trademark law is an application of the doctrine of “passing off” to goods and services, the labeling of which would cause confusion in the consumer marketplace. Another branch of unfair competition law is known as “misappropriation.” The converse of passing off, misappropriation prevents one person from representing expressly or impliedly to be his or her own a work actually created by another person; the layman labels this as plagiarism, but the law has called this kind of typically unattributed copying “misappropriation.” The Supreme Court decision in International News Service v. Associated Press,[2] rendered as an elaboration of federal tort law in the early years of the twentieth century, articulated this doctrine and its underlying rationale, and inspired state courts in developing their own local laws of unfair competition.

States may also bar copying or other unauthorized uses of intellectual creations when such use would be in breach of contract or in breach of trust or some other fiduciary relationship. The reproduction or other use of a person’s unpublished and carefully guarded industrial formulae, business schemes, or customer lists may run afoul of a state’s trade secret laws. The publishing of another’s work might also be forbidden under various state tort theories—such as the right of privacy (e.g., when A writes a love letter to B, who publishes it), defamation (e.g., when A writes B a letter stating scurrilous things about C, and B publishes that letter), and the right of publicity (e.g., when A’s performing style is mimicked by another performer).

In addition to these state laws against copying the work of another, federal laws may often be available. The federal Patent Act[3] bars the use or sale of products, processes, or designs of useful articles for which a federal patent has been issued. Under the federal trademark statute, the Lanham Act,[4] phrases and pictorial works can be registered if they have come to identify goods or services, and federal actions may be brought to forbid their copying. Even unregistered works are protected against copying under section 43(a) of the Lanham Act if their use in connection with goods and services in interstate commerce could be viewed as a

false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which . . . is likely to cause confusion, or to cause mistake, or to deceive . . . as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person.[5]

This section creates, in effect, a federal statutory law of unfair competition.

Federal Preemption[edit | edit source]

When relief is sought under state law against unauthorized use of literary, artistic, or musical creations, a question arises as to the compatibility of state relief with the federal Copyright Act. For a state to forbid copying permitted under federal law, or for a state to permit copying that federal law proscribes, would equally raise questions of compliance with the Supremacy Clause of the Constitution, Article VI, Clause 2.

In a number of significant cases that arose prior to the 1976 Copyright Act, the Supreme Court dealt with claims that state anti-copying laws were preempted because of their incompatibility with either the patent or copyright law of the United States. In two well-known companion cases decided in 1964, the Court overturned, as inconsistent with federal patent law, the application of a state unfair competition law that would have forbidden the copying and marketing of lighting fixtures for which utility and design patents were unavailable or had expired. The Court stated its holding in broad terms:

[W]hen an article is unprotected by a patent or a copyright, state law may not forbid others to copy that article. To forbid copying would interfere with the federal policy, found in Art. I, § 8, cl. 8, of the Constitution and in the implementing federal statutes, of allowing free access to copy whatever the federal patent and copyright laws leave in the public domain.[6]

The Court made clear that it had no objection to state law “which requires those who make and sell copies to take precautions to identify their products as their own,”[7] i.e., state labeling laws forbidding unfair competition in the form of “passing off.”

In a later decision pointing in a somewhat different direction, the Supreme Court upheld a state law making it a crime to “pirate” (by directly dubbing sounds from) recordings manufactured by others, at a time when the federal Copyright Act had not yet extended copyright protection to “sound recordings.” In Goldstein v. California,[8] decided in 1973, the Court concluded that Congress’s omission of sound recordings was not intended to prevent states from enacting anti-piracy laws, because much potentially copyrightable subject matter is amenable to “local” regulation and because Congress had (in the time period pertinent to the case) left the matter of protection for sound recordings “unattended.”

Congress did not leave the general issue of preemption of state anti-copying laws unattended for long. In the 1976 Copyright Act, Congress incorporated elaborate preemption provisions in section 301. Section 301(a) provides:

On and 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 such work under the common law or statutes of any State.

In section 301(b), Congress reiterated that state rights and remedies are not annulled or limited if they relate to subject matter falling outside section 102 and 103, including “unfixed” works, or if the rights afforded by state law are not “equivalent to” the rights accorded by section 106.[9] To make it clear that preemption is intended only of state laws, section 301(d) provides: “Nothing in this title annuls or limits any rights or remedies under any other Federal statute.” Accordingly, it is still possible to seek anti-copying relief under, say, federal design patent law to protect the shape of useful articles, or under the Lanham Act to bar the use of words or pictures that confuse the public regarding the source of goods or services.[10]

Section 301 clearly preempts what was known as common-law copyright: the right of first publication of, typically, a literary or musical manuscript. State laws that are not preempted fall into two categories. First are anti-copying laws that relate to works not within the subject matter of copyright; the principal statutory example of this is a work not fixed in a tangible medium of expression. Thus, if a work is communicated by the author only in “live” form—such as an improvised lecture or comedy routine—the unauthorized copying of that work (e.g., by shorthand notation or by tape recording) or the unauthorized performance of that work can be forbidden by state law. To that extent, it can be said that common-law copyright continues to exist, but only with respect to works that have not been “fixed” (or that have been fixed without the author’s consent).

Pursuant to U.S. treaty obligations, the Copyright Act was amended in 1994 to add section 1101 which protects a live musical performance against unauthorized fixation, the distribution of copies or phonorecords of the unauthorized fixation, or the transmission of the performance to the public. This unique example of federal protection of an unfixed work (granting in effect a federal right of first fixation) was sustained against constitutional attack by the Court of Appeals for the Eleventh Circuit in United States v. Moghadam.[11] The court found section 1101 to be supported by the Interstate Commerce Clause. Section 1101(d) expressly provides that state common-law or statutory remedies for such wrongdoing are not preempted.

Given the wide range of the categories of works listed in sections 102 and 103, it is difficult to imagine any fixed work that falls outside the scope of the federal act. Nonetheless, the statute, or unambiguous legislative history, makes it clear that certain components within the covered categories are not eligible for federal copyright protection. The most obvious example is “any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work,” which section 102(b) declares unprotected. Some courts have concluded that because Congress excluded ideas and concepts from the subject matter of copyright, it follows that states may outlaw their copying.[12] Most courts, however, take what would appear to be the clearly correct view, that Congress in section 102(b) was articulating an affirmative policy of making ideas and concepts available for all to copy, such that state anti-copying laws embracing such subject matter would be inconsistent with the federal scheme.[13] As the Court of Appeals for the Fourth Circuit concluded, denying state relief for the alleged copying of ideas and methods developed in a Ph.D. dissertation, the “scope” (i.e., subject matter) of the Copyright Act and its “protection” are not synonymous: “[T]he shadow actually cast by the Act’s preemption is notably broader than the wing of its protection.”[14] Even if a work is within the categories of federally copyrightable subject matter and is fixed in a tangible medium of expression, a state may forbid unauthorized use of such works provided that such use is not “equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106.” If, for example, a state were to attempt to forbid the copying or the public performance of a “fixed” dramatic work, the defendant could properly move to dismiss on the ground of preemption under section 301 of the Copyright Act. If, however, the state’s ban on copying or public performance rests upon a theory that is not “equivalent” to federal copyright, state jurisdiction and law can be effective.

Section 301 does not expressly itemize the “nonpreempted” state causes of action. Nonetheless, an earlier version of the copyright revision bill did,[15] and the itemization is useful, for despite some confusing subsequent legislative history (in the form of a colloquy on the floor of the House of Representatives), there is good reason to believe that the deletion of the list from the bill was not intended as a repudiation. Included in the earlier version, as nonequivalent and nonpreempted state claims, were “rights against misappropriation not equivalent to any of such exclusive rights [in section 106], breaches of contract, breaches of trust, trespass, conversion, invasion of privacy, defamation, and deceptive trade practices such as passing off and false representation.”

What appears to link these nonpreempted state claims is the presence of a significant element in the theory of relief that goes beyond “mere” copying or public performance (or some other right set forth in section 106 of the Copyright Act). As has been stated by the Court of Appeals for the Second Circuit:

When a right defined by state law may be abridged by an act which, in and of itself, would infringe one of the exclusive rights, the state law in question must be deemed preempted. Conversely, when a state law violation is predicated upon an act incorporating elements beyond mere reproduction or the like, the rights involved are not equivalent and preemption will not occur.[16]

This has come to be known as the “extra element” test for nonpreemption.[17]

Thus, a plaintiff’s claim that the defendant has copied a work in violation of a contractual promise, or in violation of an obligation of trust imposed by the state law of fiduciary obligations, is based on a state policy different from the economic-incentive policy underlying the Copyright Act; there are additional elements (above and beyond the copyright claim) to be proved to establish the state cause of action, and state remedies can protect interests beyond those protected by copyright.[18] Moreover, state relief in such contract and fiduciary cases reaches the conduct of only one or a very limited number of persons bound to the plaintiff in the special relationship; the state anti-copying relief does not bar members of the public more generally.[19] Some courts, however, have been more inclined than others to find preemption in situations in which the alleged contract breach is nothing more than the reproduction of expressive materials.[20]

Conversion of a physical manuscript—the wrongful assertion of ownership in the tangible property—could give rise to an unpreempted state cause of action, but conversion of “literary” property in the manuscript would be preempted, for the latter is essentially another name for copyright protection.[21] That is also true for a claim of “interference with contractual relationships” when the interference takes the form of a third person’s refusal to print the plaintiff’s book because the defendant has already marketed an unauthorized copy; the refusal to print is simply an element of the plaintiff’s damages that are compensable in a copyright infringement action.[22] Similarly, the plaintiff will ordinarily not be able to avoid the preemptive thrust of section 301 by claiming under the state anti-copying law that the defendant had acted intentionally, or had been unjustly enriched by tapping into the plaintiff’s effort and expense, or had behaved in a “commercially immoral” manner.[23] Although none of these elements of the claim is technically a requisite for a copyright claim under section 106, they are generally regarded as incidental to and not markedly different in substance from a claim for infringement.[24]

It remains to be seen whether courts will uphold state claims that are framed as “misappropriation not equivalent to any of [the] exclusive rights” in section 106 (borrowing the language that had appeared in the earlier copyright revision bill). It is, for example, doubtful whether a modern-day equivalent of the theory fashioned by the Supreme Court in International News Service v. Associated Press[25]— reaping where one had not sown in the reporting of uncopyrightable news—could be sustained against a preemption defense by a state (or federal) court applying state tort law.[26] But if the state misappropriation tort is narrowly enough circumscribed, it may survive preemption because it is not equivalent to copyright. So the Second Circuit Court of Appeals held in National Basketball Ass’n v. Motorola, Inc.,[27] when it stated “that only a narrow ‘hot-news’ misappropriation claim survives preemption for actions concerning material within the realm of copyright.”[28] In the court’s view, such a nonpreempted claim would have to have the following elements:

(i) the plaintiff generates or collects information at some cost or expense; (ii) the value of the information is highly time-sensitive; (iii) the defendant’s use of the information constitutes free-riding on the plaintiff’s costly efforts to generate or collect it; (iv) the defendant’s use of the information is in direct competition with a product or service offered by the plaintiff; (v) the ability of other parties to free-ride on the efforts of the plaintiff would so reduce the incentive to produce the product or service that its existence or quality would be substantially threatened.[29]

Although the bulk of the decided cases dealing with the issue of preemption of state law focus, naturally enough, upon the application of the explicit preemption provisions in section 301 of the Copyright Act, a number of cases have invoked a broader theory of preemption based upon a conflict with some substantive term or policy of the federal statute. As with preemption situations generally, beyond copyright, the question for the court is whether the federal policies reflected in some provision of the Copyright Act would be “set at naught, or its benefits denied” by the application of state law, or whether state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.”[30]

This “conflict preemption” might concern such issues as ownership and transfers of rights—matters that do not raise issues of “equivalence” to the exclusive rights set forth in section 106. For example, a state statute purporting to give copyright ownership to an employee who had prepared a literary work within the scope of his employment would disrupt the allocation of ownership rights dictated by Congress and would thus be an obstacle to the policies reflected in the Copyright Act. So too would a state law that would enforce an author’s transfer of a copyright despite the absence of a signed writing.

Some courts are more willing than others to effect an “accommodation” of the federal and state laws, and thus to deny that the state law is preempted. Two examples are instructive. One deals with the community-property laws in eight states, which raise the question whether the initial copyright ownership given by the Copyright Act to the “author” of a work must be shared in some way with that author’s spouse. Despite arguments that such a forced sharing would dilute and conflict with federal policy, which is designed to ensure financial rewards that foster creativity, it has been held that state law resulting in co-ownership of the copyright is not preempted; the non-author spouse will share equally in the proceeds from copyrighted works created during the marriage (and even from post-divorce derivative works), although the author–spouse alone will have the right to “manage” the copyright through licensing and transfers.[31]

Different courts of appeals have reached different conclusions on the question whether the 35-year termination power granted by section 203 of the Copyright Act preempts state laws that allow for the termination at will of all contracts (typically oral) that fail to specify a termination date. The Court of Appeals for the Ninth Circuit found a conflict and held that California law was preempted.[32] But the Seventh and Eleventh Circuits, noting the extensive academic criticism of that sistercircuit decision, viewed section 203 as author-protective and as setting a maximum and not a minimum term of a copyright grant, so that state laws more generous to authors and termination were not in conflict and so not preempted.[33]

References[edit | edit source]

  1. 17 U.S.C. § 102(a).
  2. 248 U.S. 215 (1918).
  3. 35 U.S.C. §§ 101 et seq.
  4. 15 U.S.C. §§ 1051 et seq.
  5. Id. § 1125.
  6. Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234, 237 (1964) (citing Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 (1964)). The Court reiterated these views in Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989).
  7. Compco, 376 U.S. at 238.
  8. 412 U.S. 546 (1973).
  9. Also sheltered against preemption are state causes of action arising before January 1, 1978 (long since barred by the three-year statute of limitations in section 507(b) of the Copyright Act), and state laws prohibiting the reproduction of sound recordings that were fixed before February 15, 1972, the effective date of the federal statute first barring such “record piracy.” See 17 U.S.C. § 301(c).
  10. But see Dastar Corp. v. Twentieth Century Fox Film, 539 U.S. 23 (2003) (Lanham Act is narrowly construed so as to deny relief for unattributed copying of video footage).
  11. 175 F.3d 1269 (11th Cir. 1999). District courts in other circuits are divided on the issue. See Kiss Catalog, Ltd. v. Passport Int’l Prods., Inc., 405 F. Supp. 2d 1169 (C.D. Cal. 2005); United States v. Martignon, 346 F. Supp. 2d 413 (S.D.N.Y. 2004) (appeal pending).
  12. E.g., Dunlap v. G & L Holding Group, Inc., 381 F.3d 1285 (11th Cir. 2004); Past Pluto Prods. Corp. v. Dana, 627 F. Supp. 1435 (S.D.N.Y. 1986). See also Storch Enters. v. Mergenthaler Linotype, 202 U.S.P.Q. 623 (E.D.N.Y. 1979) (state protection against copying of typeface, despite legislative history showing Congress’s desire not to afford protection).
  13. E.g., Harper & Row Publishers, Inc. v. Nation Enters., 723 F.2d 195 (2d Cir. 1983), rev’d on other grounds, 471 U.S. 539 (1985).
  14. United States ex rel. Berge v. Bd. of Trustees of Univ. of Ala., 104 F.3d 1453, 1463 (4th Cir. 1997).
  15. See H.R. Rep. No. 94-1476, at 131–32 (1976).
  16. Harper & Row, 723 F.2d at 200.
  17. E.g., Wrench LLC v. Taco Bell Corp., 256 F.3d 446 (6th Cir. 2001). This test has been criticized as conclusory. See Ritchie v. Williams, 395 F.3d 283 (6th Cir. 2005).
  18. ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996); Acorn Structures, Inc. v. Swantz, 846 F.2d 923 (4th Cir. 1988); Smith v. Weinstein, 578 F. Supp. 1297 (S.D.N.Y.), aff’d without opinion, 738 F.2d 419 (2d Cir. 1984). See Computer Assocs. Int’l, Inc. v. Altai, Inc., 982 F.2d 693 (2d Cir. 1992) (trade secret).
  19. See ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996), for a particularly thoughtful—if not uncontroversial—analysis. Zeidenberg enforced, on a state contract theory, the terms of a so-called shrinkwrap license wrapped with a mass-distributed CDROM and barring commercial use of the largely uncopyrighted material (white-page telephone information) embedded thereon.
  20. Taco Bell, 256 F.3d 446; Kabehie v. Zoland, 125 Cal. Rptr. 2d 721 (2d Dist. 2002).
  21. Ehat v. Tanner, 780 F.2d 876 (10th Cir. 1985).
  22. Harper & Row Publishers, Inc. v. Nation Enters., 723 F.2d 195 (2d Cir. 1983), rev’d on other grounds, 471 U.S. 539 (1985).
  23. E.g., Mayer v. Josiah Wedgwood & Sons, 601 F. Supp. 1523 (S.D.N.Y. 1985).
  24. For all such “equivalent” and preempted state claims, some federal courts have applied the doctrine of “complete preemption,” which results not only in a dismissal, but also in a “recharacterization” of the state claims as federal copyright claims, which thus fall within the exclusive (and removal) jurisdiction of the federal courts. See Ritchie v. Williams, 395 F.3d 283 (6th Cir. 2005).
  25. 248 U.S. 215 (1918).
  26. The House Report, however, contemplates the nonpreemption of state misappropriation laws that bar the unauthorized use of electronic means to steal a computer database. H.R. Rep. No. 94-1476, at 133 (1976) (citing International News).
  27. 105 F.3d 841 (2d Cir. 1997).
  28. Id. at 852.
  29. Id. (citations omitted).
  30. For a comprehensive treatment of the issue, see Foley v. Luster, 249 F.3d 1281 (11th Cir. 2001) (Florida law regarding indemnification is not preempted as applied to joint copyright infringers).
  31. Rodrigue v. Rodrigue, 218 F.3d 432 (5th Cir. 2000) (applying Louisiana law); In re Marriage of Susan M. & Frederick L. Worth, 241 Cal. Rptr. 135 (1st Dist. 1987) (applying California law, leaving open the question of licensing and transfer rights).
  32. Rano v. Sipa Press, Inc., 987 F.2d 580 (9th Cir. 1993).
  33. Walthal v. Rusk, 172 F.3d 481 (7th Cir. 1999) (Illinois law); Korman v. HBC Fla., Inc., 182 F.3d 1291 (11th Cir. 1999) (Florida law).