In Montz v. Pilgrim Films, 2010 U.S. App LEXIS 11255 (9th Cir. June 3, 2010), the plaintiffs claimed that they offered to partner with NBC Universal and the Sci-Fi network in the broadcast and distribution of plaintiffs' conception of a reality television program in which a team of investigators would investigate reports of "paranormal activity." In making their "pitch" to NBC and Sci-Fi, plaintiffs alleged that they had presented screenplays, videos, and other materials relating to their program concept. After passing on the offer, NBC partnered with Pilgrim Films and others to produce a series on the Sci-Fi network called "Ghost Hunters" based, according to plaintiffs, on the materials plaintiffs had presented.
Among the causes of action in the complaint were state law claims for breach of implied contract and breach of confidence. The district court concluded that these state law claims were preempted by federal copyright law and dismissed them with prejudice and without leave to amend.
The Ninth Circuit affirmed the judgment of the district court, reasoning that Section 301 of the Copyright Act, 17 U.S.C. § 301 sets forth two conditions for preemption: (1) that the state law claim asserts rights in "works of authorship that are fixed in a tangible medium of expression" and are within the statutory subject matter of copyright; and (2) that the rights asserted under state law are equivalent to the exclusive rights of copyright owners to use and authorize use of their work.
Relying on the Court's holding in Grosso v. Miramax Film Corp., 383 F3d 965 (9th Cir. 2004), Plaintiffs argued that because their state law claims were predicated on Defendants' implied promise to pay for use of the Plaintiffs' ideas, the claims contained an "extra element" outside of the rights set forth in copyright law, and were therefore not preempted by federal law. The Court of Appeal rejected this argument, reasoning that Plaintiffs' expectation of profits was premised on the fact that plaintiffs would retain control over their work; thus, the right to receive profits and credit was simply derivative of the rights at issue, i.e., the plaintiffs' exclusive right to use and authorize use of their work.
Here, the state law claims consisted of allegations that plaintiffs presented their ideas in confidence for the express purpose of partnering with NBC and Sci-Fi in the broadcast and distribution of the conceptualized program, and that NBC and Sci-Fi breached an implied agreement not to exploit the ideas without plaintiffs' consent and to share profits and credit for plaintiffs' ideas and concepts. The Court held that the "gravamen" of the state claims was "that the defendants used the plaintiffs' work, without authorization, to create (and profit from) a new television program." 2010 U.S. App. LEXIS 11255 *1, *7. The Ninth Circuit held that the rights asserted under the state law claims were thus equivalent to the federal rights of copyright owners to use and authorize use of their work.
The availability of state law claims is of more than academic interest, since they can be the basis of punitive damages, whereas damages in copyright cases are tightly circumscribed under Section 504 of the Copyright Act, 17 U.S.C. § 504. Copyright lawyers should therefore carefully analyze (and carefully draft) potential state law claims before adding them to a complaint that may subject the pleading to motion. Correspondingly, if responding to a complaint, carefully review "boilerplate" state law claims that may not be supportable.