Class 23 Copyright, Winter, 2010 State Law Claims Randal C. Picker Leffmann Professor of Commercial Law The Law School The University of Chicago Copyright © Randal C. Picker. All Rights Reserved.

October 11, 2015Copyright © Randal C. Picker2 Sec Preemption with respect to other laws n (a) u 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of copyright as specified by sections 102 and 103, whether created before or after that date and whether published or unpublished, are governed exclusively by this title.

October 11, 2015Copyright © Randal C. Picker3 Sec. 301 u 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.

October 11, 2015Copyright © Randal C. Picker4 Sec. 301 n (b) u Nothing in this title annuls or limits any rights or remedies under the common law or statutes of any State with respect to w (1) subject matter that does not come within the subject matter of copyright as specified by sections 102 and 103, including works of authorship not fixed in any tangible medium of expression; or …

October 11, 2015Copyright © Randal C. Picker5 Sec. 301 w (3) activities violating legal or equitable rights that are not equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 … n (d) u Nothing in this title annuls or limits any rights or remedies under any other Federal statute.

October 11, 2015Copyright © Randal C. Picker6 Owning Data n Hypo u Illinois passes a law providing that “no person may copy the data in telephone books distributed by phone companies.” u Entrant wants to copy incumbent’s phone book n Can the entrant do so?

October 11, 2015Copyright © Randal C. Picker7 Is This the Answer? n H.R. Rep. No : u As long as a work fits within one of the general subject matter categories of sections 102 and 103, the bill prevents the States from protecting it even if it fails to achieve Federal statutory copyright because it is too minimal or lacking in originality to qualify, or because it has fallen into the public domain.

Dance Choreography n Hypo u George B. creates dances for a living u He writes down those dances using an understandable dance notation u Photographer P takes photos of dance n Does George have a copyright in the dance? Does P infringe? October 11, 2015Copyright © Randal C. Picker8

Answer n Answer u Choreography specifically covered in the statute; see 102(a)(4), 106(4), 106(5) u Need to have standard OWA fixed in a TME but writing down the dance on paper should suffice (as would recording it) u George B should have a good copyright in the dance October 11, 2015Copyright © Randal C. Picker9

Answer n Answer u Does P infringe? u See Horgan v. MacMillan, 789 F.2d 157 (1986) (possibly) See October 11, 2015Copyright © Randal C. Picker10

Playing Jazz Flute n Hypo u James Newton, a jazz flautist, puts on a show u He plays many of his musical compositions but at one point he plays an improvised song, meaning one that he creates as he plays it n What is the copyright status of the improvised song? Does it matter if it is recorded? October 11, 2015Copyright © Randal C. Picker11

Answer n Answer u If the work is unfixed, state law could protect it w The legislative history to Sec. 301 is clear that this is the type of work left to the states under 301(b)(1) u If the work is recorded, then we have OWA fixed in a TME and full copyright October 11, 2015Copyright © Randal C. Picker12

Coaching the Lakers n Hypo u Phil Jackson writes down on paper a play for the Lakers to execute u The play works as planned u A photographer, P, takes a photo of part of the play n Does Jackson have a copyright in the play? Does P infringe? Does it matter if Kobe improvises? October 11, 2015Copyright © Randal C. Picker13

October 11, 2015Copyright © Randal C. Picker14 NBA v. Motorola n Core Facts u NBA plays games u Those games are broadcast on radio or TV u Motorola runs SportsTrax w Motorola employees to watch basketball broadcast w Type in basic factual info about the state of the game

October 11, 2015Copyright © Randal C. Picker15 NBA v. Motorola w SportsTrax distributes those accounts to pagers using wirelines, satellites and FM radio spectrum n NBA alleges copyright violations and state law misappropriation n Who wins?

Possible Copyrights n Try Three u The underlying game u The broadcast of the game u The facts of the game October 11, 2015Copyright © Randal C. Picker16

October 11, 2015Copyright © Randal C. Picker17 Copyrighting the Game n NBA Claim u NBA games are copyrightable, as such, independent of whether those games are broadcasted, so long as the games are fixed in some fashion n How should we assess this? Are games different from improvisational comedy or jazz? Are those copyrightable?

October 11, 2015Copyright © Randal C. Picker18 Copyrighting the Game n What would be the consequences of giving the NBA copyrights in the game?

October 11, 2015Copyright © Randal C. Picker19 Copyrighting the Broadcast n Broadcasting an NBA Game u Many games, one set of images transmitted to the world n What is the work? How is it classified? Is it copyrightable?

October 11, 2015Copyright © Randal C. Picker20 Answer n Yes u The work is the set of transmitted images u Will be classified as a motion picture (see 102(a)(6)) w “Motion pictures” are audiovisual works consisting of a series of related images which, when shown in succession, impart an impression of motion, together with accompanying sounds, if any.

October 11, 2015Copyright © Randal C. Picker21 Answer w “Audiovisual works” are works that consist of a series of related images which are intrinsically intended to be shown by the use of machines or devices such as projectors, viewers, or electronic equipment, together with accompanying sounds, if any, regardless of the nature of the material objects, such as films or tapes, in which the works are embodied.

October 11, 2015Copyright © Randal C. Picker22 Answer n Fix through simultaneous recording at time of broadcast u A work consisting of sounds, images, or both, that are being transmitted, is “fixed” for purposes of this title if a fixation of the work is being made simultaneously with its transmission.

Copyrighting the Facts n The NBA’s Claim u These are facts created by us, just like the facts created in the Seinfeld Aptitude Test case u These are not facts that just exist out there somewhere waiting to be discovered u We should hold a copyright in the underlying facts of the game just like the SAT n Yes? No? October 11, 2015Copyright © Randal C. Picker23

October 11, 2015Copyright © Randal C. Picker24 The Misappropriation Claim n Key Question u Under what circumstances, if any, should a state be able to create additional protections?

October 11, 2015Copyright © Randal C. Picker25 Legis History n H.R. Rep. No u “Misappropriation” is not necessarily synonymous with copyright infringement, and thus a cause of action labeled as “misappropriation” is not preempted if it is in fact based neither on a right within the general scope of copyright as specified by section 106 nor on a right equivalent thereto. For example, state law should have the flexibility to afford a remedy (under traditional principles of equity) against a consistent pattern of unauthorized appropriation by a competitor of the facts (i.e., not the literary expression) constituting “hot” news, whether in the traditional mold of International News Service v. Associated Press, 248 U.S. 215 (1918), or in the newer form of data updates from scientific, business, or financial data bases.

October 11, 2015Copyright © Randal C. Picker26 2 nd Cir Test in Motorola n Five Elements u Plaintiff gathers info at a cost u Info is time-sensitive u Defendant free-rides on plaintiff’s efforts u Defendant’s service competes with that offered by plaintiff u Free-riding would “substantially threaten” plaintiff’s incentives to produce the product in question

October 11, 2015Copyright © Randal C. Picker27 Identifying the Relevant Products n Three Possibilities u NBA Games u TV and Radio Broadcasts of NBA Games u Additional Add-On Products, such as SportsTrax

October 11, 2015Copyright © Randal C. Picker28 Court’s Final Answer n Yes, time-sensitive, and yes NBA has directly competing service, Gamestats n But: u SportsTrax does not compete with games or broadcasts u No free-riding by Motorola on Gamestats; Motorola gets info on its own from broadcasts n Motorola wins

October 11, 2015Copyright © Randal C. Picker29 ProCD v. Zeidenberg n Core Facts u CD of 3000 telephone directories u Assumed not copyrightable after Feist u License attempted to segregate users into serious business users and casual consumer users

October 11, 2015Copyright © Randal C. Picker30 Basic Structure of Interaction n Forming the Contract u ProCD sells CD u Box states software comes with license u Running software triggers appearance of license u In normal course, must click “yes” to get access to the software u Disagree? Return software for full refund

October 11, 2015Copyright © Randal C. Picker31 Possible Views n Z. and the Lower Court u CD in box on shelf constitutes offer u Purchase constitutes acceptance u License irrelevant? n 7 th Circuit View u Offer not made at store, rather made at point of click-through u Click-through constitutes acceptance

October 11, 2015Copyright © Randal C. Picker32 Contract Questions n Key Question u Was a contract formed? u When? u On what terms? n Not Today

October 11, 2015Copyright © Randal C. Picker33 The Value of Price Discrimination in IP Goods n Cost Structure of IP Goods u Substantial fixed costs, here more than $10 million to create database u Next to zero marginal costs n Need Pricing Mechanism to Cover Fixed Costs

October 11, 2015Copyright © Randal C. Picker34 Assume Contract n Does 301 preempt it?

October 11, 2015Copyright © Randal C. Picker35 Writing 301(b)(3) n Starts with u Nothing in this title annuls or limits any rights or remedies under the common law or statutes of any State with respect to …

October 11, 2015Copyright © Randal C. Picker36 Writing 301(b)(3) u The Adopted Version w (3) activities violating legal or equitable rights that are not equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106; u A Prior Draft Version w (3) activities violating rights that are not equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106, including breaches of contract, breaches of trust, invasion of privacy, defamation, and deceptive trade practices such as passing off and false representation.

October 11, 2015Copyright © Randal C. Picker37 Legis History on Draft Version n H.R. Rep. No u Nothing in the bill derogates from the rights of parties to contract with each other and to sue for breaches of contract; however, to the extent that the unfair competition concept known as “interference with contract relations” is merely the equivalent of copyright protection, it would be preempted.

October 11, 2015Copyright © Randal C. Picker38 Easterbrook’s Key Point on Equivalence n Copyright v. Contract u Copyrights are rights good against the world u Contractual rights usually only bind the contracting parties u The ProCD restrictions limit Zeidenberg, but not third parties u Hence not “equivalent” to copy rights, hence not preempted