Preemption II Intro to IP – Prof Merges

Agenda Kewanee review Bonito Boats: review Preemption of publicity and trademark claims Contractual preemption (revisited)

Kewanee Oil v. Bicron The trade secret at the center of this case was a process that would create 17-inch crystals useful in detecting radiation. A division of the plaintiff firm, Harshaw Chemicals, was involved in the refining of uranium during World War II for the Manhattan Project. This resulted in massive ground pollution that is still a problem today. Both companies involved in the case were later bought out. Harshaw became a part of Engelhard Corporation, while Bicron joined with Saint- Gobain Crystals and Detectors.

Kewanee Oil “Employee mobility” case Basic question: is TS law compatible with federal statutory IP scheme?

Burger opinion State variation: 18 th century state patents Goldstein v. California: state protection for sound recordings (prior to federal statutory protection in 1972)

Potential problem Federal preemption “Dormant commerce clause” analogy – What should the courts infer from Congress’ failure to create federal TS protection?

Inference from federal inactivity Congress explicitly decided to leave something unprotected? Congress was indifferent; or believed it appropriate for states to protect the thing in question?

Kewanee holding: State trade secret law is not preempted by federal IP scheme – TS law is a “sieve”, as opposed to a “barrier” like patent law Why? Reverse engineering/independent invention; “commercial ethics” as well as innovation policy – A weaker, and quite different, form of IP law

Bonito Boats Florida anti-molding statute Tennessee defendant Held: State statute pre-empted by federal law

Bonito Boats

Boat molds

Bonito Boats Florida anti-molding statute Tennessee defendant Held: State statute pre-empted by federal law

“Florida statute endows the original boat hull manufacturer with rights against the world, similar in scope and operation to the rights accorded a federal patentee.” -- IPNTA 5 th ed. at p. 1070

Holding: “[T]he [state] statute … so substantially impedes the public use of the otherwise unprotected design and utilitarian ideas embodied in unpatented boat hulls as to run afoul of [the Sears-Compco doctrine].” -- IPNTA 5 th ed. at p. 1070

Aftermath of Bonito Boats Congress passed the Vessel Hull Design Protection Act as part of the Digital Millennium Copyright Act. The VHDPA provides copyright protections to hull designs, and many boat builders have registered their designs. The law has been incorporated into Chapter 13 of the Copyright Act.

Aftermath of Bonito Boats Congress passed the Vessel Hull Design Protection Act as part of the Digital Millennium Copyright Act. The VHDPA provides copyright protections to hull designs, and many boat builders have registered their designs. The law has been incorporated into Chapter 13 of the Copyright Act.

Subject matter covered by federal right Intentionally unprotected subject matter Unprotected, but open to state protection

Extension of preemption doctrine Right of publicity Contracts providing IP-like protection

Copyright preemption IPNTA 5 th ed. at p. See case/page citations in these slides

[A]ll 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 section[] 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 U.S.C. § 301(a).

The 2 part preemption test Claim preempted IF – (1) the subject matter of the claim comes within the “subject matter of copyright,” as defined in sections 102 and 103 of the Act, and (2) the rights granted under state law are “equivalent” to any of the exclusive rights within the general scope of copyright as defined in section 106 of the Act

BALTIMORE ORIOLES, INC. v. MAJOR LEAGUE BASEBALL PLAYERS ASSOCIATION, 805 F. 2d 663 (7 th Cir. 1986) Cited in ProCD, IPNTA 5 th ed. at 994

The district court concluded that the telecasts were copyrightable works. We agree. The many decisions that must be made during the broadcast of a baseball game concerning camera angles, types of shots, the use of instant replays and split screens, and shot selection similarly supply the creativity required for the copyrightablitiy of the telecasts.

See House Report at 52 (“When a football game is being covered by four television cameras, with a director the activities of the four cameramen and choosing which of their electronic images are sent to the public and in which order, there is little doubt that what the cameraman and the director are doing constitutes ‘authorship.’”).

Players’ aim is to share in the increasingly lucrative revenues derived form the sale of television rights for over-the-air broadcasts by local stations and national networks and for distribution by subscription and pay cable services. Contrary to the Players’ contention, the effect of this decision is not to grant the Clubs perpetual rights to the Players’ performances. The Players remain free to attain their objective by bargaining with the Clubs for a contractual declaration that the Players own a joint or an exclusive interest in the copyright of the telecasts.

The baseball clubs owned the copyrights in the telecasts, and given that the players’ rights of publicity in their game-time performances were not significantly different from the rights conferred by the copyright law, the players' rights of publicity in their performances were preempted under §301.

June Toney v. L’Oreal, 406 F.3d 905 (7 th Cir. 2005) – IPNTA 5 th ed. at p (Note) Toney authorized Johnson Products Company to use her likeness on the packaging of a hair- relaxer product called "Ultra Sheen Supreme" from November 1995 until November In addition, Toney authorized the use of her likeness in national magazine advertisements for the relaxer from November 1995 until November 1996.

Toney asserted that L'Oreal, Wella Corporation, and Wella Personal Care of North America, Inc., (collectively, "defendants") used her likeness in connection with the packaging and promotion of the Ultra Sheen Supreme relaxer product beyond the authorized time period. Specifically, she claimed that the defendants thereby violated (1) her right to publicity in her likeness as protected under the Illinois Right of Publicity Act, 765 Ill. Comp. Stat. 1075/1-60 ("IRPA"), and (2) the Lanham Trademark Act of 1946, 15 U.S.C. § 1125(a).

The district court found that the IRPA-based claim met the conditions set out in § 301 of the Copyright Act ("Act"), 17 U.S.C. § 301, and was therefore preempted.

The subject matter of such a claim "is not a particular picture or photograph of plaintiff. Rather, what is protected by the right of publicity is the very identity or persona of the plaintiff as a human being." J. Thomas McCarthy, 2 RTS. OF PUBLICITY & PRIVACY § 11:52 (2d ed.2004)

We will first determine whether the work at issue is fixed in a tangible form and whether it comes within the subject matter of copyright as specified in § 102. Second, we consider whether the right is equivalent to the general copyright protections which are set out in § 106.

Toney's identity is not fixed in a tangible medium of expression. There is no "work of authorship" at issue in Toney's right of publicity claim. A person's likeness -- her persona -- is not authored and it is not fixed. The fact that an image of the person might be fixed in a copyrightable photograph does not change this. From this we must also find that the rights protected by the IRPA are not "equivalent" to any of the exclusive rights within the general scope of copyright that are set forth in § 106. Copyright laws do not reach identity claims such as Toney's. Identity, as we have described it, is an amorphous concept that is not protected by copyright law; thus, the state law protecting it is not preempted.

The Toney court sought to clarify the distinctions between its holding and the Baltimore Orioles opinion. The court said that the earlier case does not simply stand for the proposition that state right of publicity laws are preempted in all instances by federal copyright law. Rather, the case holds that state laws that intrude on the domain of copyright are preempted even if the particular expression is neither copyrighted nor copyrightable. Such a result is essential in order to preserve the extent of the public domain established by copyright law.

Therefore, states may not create rights in material that was published more than 95 years ago, even though that material is not subject to federal copyright. Also, states may not create copyrightlike protections in materials that are not original enough for federal protection, such as a telephone book with listings in alphabetical order.

Baltimore Orioles itself makes clear that a player's right of publicity in his name or likeness would not be preempted if a company, without the consent of the player, used the player's name to advertise its product. Thus the plaintiff's claim under the Illinois right of publicity statute is not preempted by federal copyright law.

Idea Submission cases Wrench LLC v. Taco Bell Corp., 256 F.3d 446 (6th Cir 2001), IPNTA 5 th ed. at 998 Murray v. National Broad. Co., 844 F.2d 988, 993 (2d Cir. 1988) – cited in Nadel v. Play-by- Play Toys, IPNTA 5 th at 1006

Wrench 1 st prong: subject matter – is satisfied here; ideas are within the ambit of copyright But 2 nd prong, equivalent right, fails; the “additional element” of K law applies here

One idea... [E]ven though the ideas embodied in a work covered by the Copyright Act fall outside copyright protection, this does not mean that they fall outside the Act’s scope, regarding its subject matter.

Subject matter covered by federal right Intentionally unprotected subject matter Unprotected, but open to state protection

Nimmer Treatise A breach of contract action, whether such contract involves a mere idea or a fully developed literary work, is not predicated upon a right that is equivalent to any of the exclusive rights within the general scope of copyright… This [sic], for the reason that a contract right may not be claimed unless there exists an element in addition to the mere acts of reproduction, performance, distribution or display. The additional element is a promise—express or implied—on the part of the Defendant.

Preemption of Contract Terms Two categories – Immutable statutory rules: no contracting around (example: patent and copyright term) – “Default rules”: contracting around permitted (e.g., K term saying licensor keeps royalty payments made before patent or copyright found invalid)