Copyright and Contract – The Thorny Problem of “Preemption”
May 16, 2024
Privacy Plus+
Privacy, Technology and Perspective
This week, let’s look at an interesting observation being circulated by Professor Guy Rub of Ohio State, courtesy of Eric Goldman’s reliably-interesting Technology & Marketing Law Blog.
What “Preemption” Means
Preemption means that federal law overrides state law when the two are in conflict. The idea behind preemption is that certain topics need to be addressed uniformly at a national level rather than varying by state. Examples include decisions of war and peace, coinage, international treaties, and the fields of copyright and patent. Article I of the Constitution specifically reserves these and certain other fields to the U.S. government, “preempting” any substantive state-based involvement. Section 301(a) of the Copyright Act of 1976 adds a statutory layer to the constitutional foundation, expressly preempting any state law “equivalent” to copyright.
But what is “equivalent” to copyright, especially since in preempted fields like copyright, what the federal law doesn’t forbid is usually read to mean, “expressly permitted?”
When is “Breach of Contract” Preempted?
Breach of contract is perhaps the state-based cause of action most often challenged as being preempted by federal copyright law. Typically, the defendant argues that the plaintiff’s contract claim is preempted because it is “equivalent” to the rights or remedies under the Copyright Act. This means the defendant either has an absolute right to their actions, or the plaintiff must file suit under the Copyright Act in federal court. This may be difficult due to registration requirements or other reasons, or impossible because the actor is a state entity.
The case law on this is assorted and inconsistent. Generally, the Second Circuit has favored preemption in breach of contract cases (e.g. ML Genius v. Google), and we sense that the Fifth Circuit has leaned that way. The Seventh Circuit seems to disagree (e.g. ProCD v. Zeidenberg), however, and the Ninth Circuit seems to follow the Seventh in this.
“Conflict Preemption”
Professor Rub, along with others, argues that focusing on whether contracts are "equivalent" to copyright is misguided. Instead, he suggests we should ask if the contract undermines the policies underlying copyright law, which states are not permitted to do. Preventing a state-based contract from undermining federal copyright policy is known as "conflict preemption."
How Conflict Preemption Works
Professor Rub and others observe that conflict preemption analysis first examines how closely the state law's interests align with federal copyright interests—the closer they are, the more likely the state law will be preempted. Next, it looks at the potential conflicts between the state law and copyright—the greater the conflicts, the more likely preemption will occur. For example, if the state law aims to protect uniquely state-based interests, like privacy or trade secrets/confidentiality, it is less likely to conflict with federal copyright policy and be preempted.
Our Thoughts
We are intrigued by this analysis, and – mindful of Mark Twain’s famous line that “only one thing is impossible for God, and that is to make sense of any copyright law on this planet” – we believe it offers a fresh, helpful path through the fiendishly hard “equivalency” maze of copyright preemption analysis.
To read Professor Rub’s article in its entirety, see his excellent blog here:
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Hosch & Morris, PLLC is a boutique law firm dedicated to data privacy and protection, cybersecurity, the Internet and technology. Open the Future℠.