BY:Michael I. Rudell
(Originally published in the Entertainment Law column in the New York Law Journal, September 22, 2000.)
The motion picture “Frequency,” released several months ago in the United States, has spawned a decision that discusses claims relating to the Lanham Act and breach of an implied-in-fact contract.1 A district court has denied defendants’ motion to dismiss plaintiff’s Lanham Act cause of action, but has granted the motion to dismiss the contract claim on the grounds that it is preempted by the Copyright Act.
The complaint filed in this action alleges that during 1991 and 1992 plaintiff conceived of an idea for a theatrical motion picture and wrote a screenplay based upon that idea entitled “Doubletime.” He registered it with the Writers Guild of America and obtained a federal copyright registration.
In the summer of 1994, plaintiff’s agent submitted the screenplay and his ideas relating thereto to New Line Cinema Corporation (“New Line”). New Line advised the agent that recently it had produced a “time-travel” film and therefore was reluctant to produce another film that used transitions in time as a central element. However, the company requested that it be shown any future drafts of “Doubletime” that plaintiff wrote.
Subsequently, New Line purchased a screenplay written by Toby Emmerich entitled “Frequency” for one million dollars. Plaintiff contends that both Emmerich and New Line copied the expression of “Doubletime,” Emmerich by writing the screenplay and New Line by developing and producing the film based on it. He alleges that both the screenplay and the film “bodily appropriate and copy the original expression of the screenplay ‘Doubletime’.” He also alleges that defendants used his ideas in producing the film without compensating him or providing him with any screen credit.
Plaintiff further claims that at the time his screenplay was submitted, New Line understood that he expected to be compensated and receive screen credit if his ideas were used in the creation, development and production of the film. Based on this understanding, an implied-in-fact contract existed between plaintiff and New Line such that New Line implicitly agreed to pay him the reasonable value of his ideas and give him appropriate screen credit if any of those ideas were used to produce and distribute a film.
Plaintiff brought suit against New Line and Emmerich alleging copyright infringement, violation of the Lanham Act and breach of implied-in-fact contract. Defendants moved to dismiss the latter two causes of action.
The Court commences its discussion by noting that on a motion to dismiss for failure to state a claim, the allegations of the complaint must be accepted as true and are to be construed in the light most favorable to the non-moving party.
Plaintiff’s Lanham Act claim is that defendants’ conduct constitutes “reverse passing off” which occurs when a product is mislabeled to mask the creator’s contribution. In the Ninth Circuit, it is not enough that the mis-attributed material is substantially similar; there must be bodily appropriation which, in effect, requires that the defendant engage in copying or unauthorized use of substantially the entire work. Here, plaintiff alleges that both Emmerich’s screenplay and the film based thereon bodily appropriate and copy the original expression of the screenplay “Doubletime.”
In support of its motion, defendants provided copies of both the “Doubletime” and “Frequency” scripts. Plaintiff argues that the Court should not consider this extraneous evidence because it is unclear whether the “Frequency” screenplay attached to Emmerich’s declaration was the same screenplay that Emmerich sold to New Line or the final shooting script.
Although not necessarily adopting plaintiff’s reasoning, the Court elected to refrain from considering such evidence, concluding that it would be premature to engage in a factual comparison at that time. Plaintiff’s complaint adequately alleges that defendants violated the Lanham Act by bodily appropriating his work. Therefore, the Court denies defendants’ motion to dismiss the Lanham Act claim. The decision notes, however, that defendants may move for summary judgment on this issue after the parties have had an opportunity to engage in meaningful discovery.
The Court next turns to an analysis of the claim for breach of implied-in-fact contract in which the plaintiff alleges that the defendants impliedly agreed not to use any of his ideas in the production of any film without giving him appropriate compensation and screen credit. The Court notes that in the entertainment context, to establish such a claim, a plaintiff must allege that he or she prepared the work and disclosed it to an offeree for sale, and that it can be concluded that the offeree voluntarily accepted the disclosure knowing the conditions on which it was tendered and the reasonable value of the work. Defendants assert that this cause of action should be dismissed because it is preempted by the Copyright Act.
Section 301(a) of the Copyright Act specifies that it preempts all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified in section 106 and come within the subject matter of copyright as specified by sections 102 and 103.
Plaintiffs breach of implied contract claim purports to address defendants’ alleged use of his ideas, not merely the copying of his screenplay. The Court first analyzes whether these ideas fall within the subject matter of copyright.
Section 102 of the Copyright Act provides that copyright protection extends only to original works of authorship fixed in any tangible means of expression and expressly excludes ideas. The Fourth Circuit has held, however, that the ideas embodied in a work covered by the Copyright Act are nevertheless within the subject matter of copyright for purposes of preemption because scope and protection are not synonymous.
At least one Ninth Circuit decision has adopted this reasoning. In that case the court declined to allow a plaintiff who developed the concept and format for a television program to sue a production company that produced that program for copyright infringement and breach of contract, noting that it would be impermissible to allow the plaintiff to plead two bites at the apple.2
The Court does not need to adopt a sweeping interpretation of section 102 that would place all ideas within the subject matter of copyright for purposes of preemption. It does conclude, however, that merely because ideas are what plaintiff claims are the subject matter of his breach of -implied-in-fact contract cause of action does not remove them from the subject matter of copyright.
Here, plaintiff’s breach of implied-in-fact contract claim is based on the uncopyrighted ideas underlying his copyrighted screenplay. He claims that defendants impliedly promised not to use those ideas in any work for which he would receive no credit or compensation. Based upon authorities reviewed by the Court in the decision, it concludes that his ideas fall within the subject matter of copyright.
The Court next examines the concept of equivalent rights. In determining whether a claim brought under a state law asserts rights equivalent to the exclusive rights protected by the Copyright Act, the critical inquiry is whether the claim contains an “extra element” that changes the nature of the action. For example, under California law a claim by a producer for fraud against an author and production company contains the extra element of misrepresentation and is not preempted by the Copyright Act. However, the Ninth Circuit has not decided under what circumstances, if any, a claim for breach of an express contract or an implied-in-fact contract is preempted.
Noting that a majority of courts have found that a breach of contract claim generally is not preempted, the Court reviews two distinct approaches that have been used to reach this conclusion. The first is that the promise to perform the contract constitutes an extra element. Courts employing this view have concluded that a defendant’s very promise to refrain from using a plaintiff’s idea or copyrighted material without compensation provides the extra element. However, the Court states that the troubling aspect of this analysis is that conceivably the promise may not really be an additional element.
The second approach focuses on the difference in the scope of protection afforded by copyright as opposed to contract. The phrase “equivalent to any of the exclusive rights within the general scope of copyright” referred to section 301(a) of the Copyright Act relates to rights established by law – rights that restrict the options of persons who are strangers to the author. A copyright is a right against the world. By contrast, contracts generally only affect their parties; strangers may do as they wish so long as contracts do not create “exclusive rights.” The Court cites cases in which a number of hypothetical situations are presented in which it clearly would be inequitable to allow a promissor to breach his promise by invoking the preemption doctrine as a barrier to suit. However, those examples are distinguishable from the facts in this case, because they involve either conduct other than copying or a contract that creates rights qualitatively difference from the rights protected by the Copyright Act.
The opinion then indicates that, without explicitly adopting a different or third rationale for refusing to preempt a contract claim, some courts have premised their analysis neither on the existence of an express promise nor the conceptual difference between contract rights and copyrights, but on whether the specific contract alleged in the complaint protects or creates any rights that are not equivalent to the exclusive prohibitions contained in the Copyright Act.
The opinion cites Nimmer on Copyright as lending support to this method of analysis: “At times a breach of contract cause of action can serve as a subterfuge to control nothing other than the reproduction, adaptation, public distribution, etc., of works within the subject matter of copyright…. Although the vast majority of contract claims will presumably survive scrutiny…nonetheless preemption should continue to strike down claims that, although denominated ‘contract,’ nonetheless complain directly about the reproduction of expressive materials.”
The Court elects to adopt the fact-specific approach which requires an analysis of whether the right in question is infringed by the mere act of reproduction, performance, distribution or display.
In the instant case, plaintiff’s claim alleges only that defendants promised to compensate him and give him appropriate screen credit if his ideas were utilized by defendants to produce and distribute a theatrical motion picture. Defendants’ alleged promise to refrain from using his ideas does not prohibit any conduct that is beyond that prohibited by the Copyright Act. This being so, the rights protected by the alleged contract were equivalent to the exclusive rights protected by the Copyright Act and accordingly, plaintiff’s claim for breach of contract is preempted.
For the above reasons, the Court grants defendants’ motion to dismiss with prejudice as to plaintiff’s cause of action for breach of implied-in-fact contract.
1 Selby v. New Line Cinema Corporation, U.S. District Court for the Central District of California, 2000 U.S. Dist. LEXIS 6045 (March 6, 2000).
2 Endemol Entertainment B.V. The Twentieth Television, Inc., 1998 U.S. Dist. LEXIS 19049, 48 U.S.P.Q.2D (BNA) 1524.