Transcript Standard Setting in High

Class 19
Copyright, Winter, 2014
State Law Claims
Randal C. Picker
James Parker Hall Distinguished Service Professor of Law
The Law School
The University of Chicago
773.702.0864/[email protected]
Copyright © 2005-14 Randal C. Picker. All Rights Reserved.
Sec. 301. Preemption with
respect to other laws

(a)
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,
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Sec. 301
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whether published or unpublished, are governed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.
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Sec. 301

(b)
Nothing
in this title annuls or limits any rights or
remedies under the common law or statutes of
any State with respect to
 (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 …
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Sec. 301
 (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 …

(d)
Nothing
in this title annuls or limits any rights or
remedies under any other Federal statute.
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Owning Data

Hypo
Illinois
passes a law providing that “no person
may copy the data in telephone books distributed
by phone companies.”
Entrant wants to copy incumbent’s phone book

Can the entrant do so?
July 21, 2015
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Is This the Answer?

H.R. Rep. No. 94-1476:
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.
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Contracting about Data

Hypo
Illinois
has a general law of contracts
Illinois applies that law to contracts about public
domain data
Entrant receives data on CD subject to contract
and wants to copy it

Can the entrant do so?
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ProCD v. Zeidenberg

Core Facts
CD
of 3000 telephone directories
Assumed not copyrightable after Feist
License attempted to segregate users into serious
business users and casual consumer users
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Basic Structure of Interaction

Forming the Contract
ProCD
sells CD
Box states software comes with license
Running software triggers appearance of license
In normal course, must click “yes” to get access to
the software
Disagree? Return software for full refund
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Possible Views on Contract
Formation

Z. and the Lower Court
CD
in box on shelf constitutes offer
Purchase constitutes acceptance
License irrelevant?
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Possible Views on Contract
Formation

7th Circuit View
Offer
not made at store, rather made at point of
click-through
Click-through constitutes acceptance
Control abuse through right of return
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Contract Questions

Key Question
Was
a contract formed?
When?
On what terms?

Not Today
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The Value of Price Discrimination
in IP Goods

Cost Structure of IP Goods
Substantial
fixed costs, here more than $10
million to create database
Next to zero marginal costs

Need Pricing Mechanism to Cover Fixed Costs
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Assume Contract

Does 301 preempt it?
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Writing 301(b)(3)

Starts with
Nothing
in this title annuls or limits any rights or
remedies under the common law or statutes of
any State with respect to …
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Writing 301(b)(3)
The
Adopted Version
 (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;
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Writing 301(b)(3)
A
Prior Draft Version
 (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.
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Legis History on Draft Version

H.R. Rep. No. 94-1476
“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.”
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Two Step Analysis for 301

Is the thing in question “within the subject
matter of copyright”?
Feist-type
facts treated as such even though no
protection under Title 17

Is the right in question equivalent to any of the
rights under Section 106?
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Easterbrook’s Key Point on
Equivalence

Copyright v. Contract
Copyrights
are rights good against the world
Contractual rights usually only bind the
contracting parties
The ProCD restrictions limit Zeidenberg, but not
third parties
Hence not “equivalent” to copy rights, hence not
preempted
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Dance Choreography

Hypo
George
B. creates dances for a living
He writes down those dances using an
understandable dance notation
Photographer P takes photos of dance

Does George have a copyright in the dance?
Does P infringe?
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Answer

Answer
Choreography
specifically covered in the statute;
see 102(a)(4), 106(4), 106(5)
Need to have standard OWA fixed in a TME but
writing down the dance on paper should suffice
(as would recording it)
George B should have a good copyright in the
dance
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Why is Dance Choreography
Covered by Copyright?

S. Rep. 94-473 at page 51:
“The
historic expansion of copyright has also
applied to forms of expression which, although in
existence for generations or centuries, have only
gradually come to be recognized as creative and
worthy of protection. The first copyright statute in
this country, enacted in 1790, designated only
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Why is Dance Choreography
Covered by Copyright?

S. Rep. 94-473 at page 51:
“‘maps,
charts, and books’; major forms of
expression such as music, drama, and works of
art achieved specific statutory recognition only in
later reenactments. Although the coverage of the
present statute is very broad, and would be
broadened further by the added recognition of
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Why is Dance Choreography
Covered by Copyright?

S. Rep. 94-473 at page 51:
“choreography
there are unquestionably other
areas of existing subject matter that this bill does
not propose to protect but that future Congresses
may want to.”
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Answer

Answer
Does
P infringe?
See Horgan v. MacMillan, 789 F.2d 157 (1986)
(possibly)
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Playing Jazz Flute

Hypo
James
Newton, a jazz flautist, puts on a show
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

What is the copyright status of the improvised
song? Does it matter if it is recorded?
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Answer

Answer
If
the work is unfixed, state law could protect it
 The legislative history to Sec. 301 is clear that
this is the type of work left to the states under
301(b)(1)
If the work is recorded, then we have OWA fixed
in a TME and full copyright
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Legis History on Improvised
Works

S. Rep. at page 51:
“As
will be noted in more detail in connection with
section 301, an unfixed work of authorship, such
as an improvision or an unrecorded choreographic
work, performance, or broadcast, would continue
to be subject to protection under State common
law or statute, but would not be eligible for Federal
statutory protection under section 102.”
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Coaching the Lakers

Hypo
Phil
Jackson writes down on paper a play for the
Lakers to execute
The play works as planned
A photographer, P, takes a photo of part of the
play
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Coaching the Lakers

Does Jackson have a copyright in the play?
Does P infringe? Does it matter if Kobe
improvises?
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NBA v. Motorola

Core Facts
NBA
plays games
Those games are broadcast on radio or TV
Motorola runs SportsTrax
 Motorola employees to watch/listen to basketball
broadcasts
 Type in basic factual info about the state of the
game
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NBA v. Motorola
 SportsTrax
distributes those accounts to pagers
using wirelines, satellites and FM radio
spectrum


NBA alleges copyright violations and state law
misappropriation
Who wins?
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Possible Copyrights

Try Three
The
underlying game
The broadcast of the game
The facts of the game
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Copyrighting the Game

NBA Claim
NBA
games are copyrightable, as such,
independent of whether those games are
broadcasted, so long as the games are fixed in
some fashion

How should we assess this? Are games
different from improvisational comedy or jazz?
Are those copyrightable?
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Copyrighting the Game

What would be the consequences of giving the
NBA copyrights in the game?
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Copyrighting the Broadcast

Broadcasting an NBA Game
Many
games, one set of images transmitted to the
world

What is the work? How is it classified? Is it
copyrightable?
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Answer

Yes
The
work is the set of transmitted images
Will be classified as a motion picture (see
102(a)(6))
 “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.
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Answer
 “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.
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Answer

Fix through simultaneous recording at time of
broadcast
“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.”
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Copyrighting the Facts

The NBA’s Claim
These
are facts created by us, just like the facts
created in the Seinfeld Aptitude Test case
These are not facts that just exist out there
somewhere waiting to be discovered
We should hold a copyright in the underlying facts
of the game just like the SAT
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Copyrighting the Facts

Yes? No?
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The Misappropriation Claim

Key Question
Under
what circumstances, if any, should a state
be able to create additional protections?
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Legis History

H.R. Rep. No. 94-1476
“‘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.”
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Legis History

H.R. Rep. No. 94-1476
“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
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Legis History

H.R. Rep. No. 94-1476
“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.”
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nd
2

Cir Test in Motorola
Five Elements
Plaintiff
gathers info at a cost
Info is time-sensitive
Defendant free-rides on plaintiff’s efforts
Defendant’s service competes with that offered by
plaintiff
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nd
2

Cir Test in Motorola
Five Elements
would “substantially threaten” plaintiff’s
incentives to produce the product in question
Free-riding
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Identifying the Relevant Products

Three Possibilities
NBA
Games
TV and Radio Broadcasts of NBA Games
Additional Add-On Products, such as SportsTrax
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Court’s Final Answer


Yes, time-sensitive, and yes NBA has directly
competing service, Gamestats
But:
SportsTrax
does not compete with games or
broadcasts
No free-riding by Motorola on Gamestats;
Motorola gets info on its own from broadcasts

Motorola wins
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