Patricia Kennedy & Co. v. Zam-Cul Enterprises

• Decision Date: 23 August 1993
• Docket Number: Civ. A. No. 92-12772-Z.
• Citation: 830 F. Supp. 53
• Court: U.S. District Court — District of Massachusetts
• Parties: PATRICIA KENNEDY & COMPANY, INC., Plaintiff, v. ZAM-CUL ENTERPRISES, INC. Ambulance Systems of America, Inc., Defendants.

830 F. Supp. 53

PATRICIA KENNEDY & COMPANY, INC., Plaintiff, v. ZAM-CUL ENTERPRISES, INC. Ambulance Systems of America, Inc., Defendants.

Civ. A. No. 92-12772-Z.

United States District Court, D. Massachusetts.

July 1, 1993.

Memorandum and Order on Denial of Reconsideration August 23, 1993.

Hugh A. Starkey, Simonds, Winslow, Willis & Abbott, Boston, MA, for plaintiff.

Robert B. Gordon, Eric Jaeger, Ropes & Gray, Boston, MA, Gregory F. Galvin, South Weymouth, MA, for defendants.

MEMORANDUM AND ORDER

COLLINGS, United States Magistrate Judge.

Introduction

In its complaint, the plaintiff Patricia Kennedy & Company, Inc. (hereinafter "Kennedy & Co.") alleged that the defendants Zam-Cul Enterprises, Inc. and Ambulance Systems of America, Inc. (hereinafter collectively "ASA") had infringed its rights under the federal copyright law and, further, had engaged in unfair or deceptive practices in violation of Massachusetts General Laws Chapter 93A. During a three-day trial in early May of this year, the copyright claim was tried to a jury while the Chapter 93A claim simultaneously was tried to the Court. On May 12, 1993, in answer to special interrogatories, the jury returned a verdict in favor of Kennedy & Co., awarding the plaintiff eighteen thousand seven hundred and fifty dollars ($18,750.00) as damages to compensate it for the economic harm caused by the defendants' infringement.

After the jury was discharged, a conference was held with counsel to discuss the remaining state law claim. At that time, the Court queried whether the plaintiff's Chapter 93A claim was preempted by the Copyright Act. In the ensuing colloquy, it was agreed that this threshold legal issue should be resolved before the merits of the plaintiffs claim were addressed. At the Court's direction, the parties have filed memoranda of law on the preemption question and the issue now is ripe for decision.

Discussion

The federal Copyright Act incorporates an explicit preemption provision, to wit:

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. 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.

17 U.S.C. § 301(a).

The seeming breadth of this provision is circumscribed by section 301(b), which provides in pertinent part:

Nothing in this title annuls or limits any rights or remedies under the common law or statutes of any state with respect to ... activities violating legal or equitable rights that are not equivalent to any of the exclusive rights within the general scope of copyright as specified in section 106.

17 U.S.C. § 301(b)(3).

To complete the statutory framework, section 106 sets forth the exclusive rights that an owner enjoys in copyrighted works as follows: (1) the right to reproduce the copyrighted work; (2) the right to prepare derivative works; (3) the right to distribute, by sale or otherwise, copies of the copyright work; (4) with respect to particular types of artistic works, the right to publicly perform them; and (5) the right to publicly display the copyrighted works. 17 U.S.C. 106(1)-(5); See generally, Computer Associates International, Inc. v. Altai, Inc., 982 F.2d 693, 716 (2 Cir., 1992).

Parsed to its essentials, section 301 establishes a bipartite test for the preemption of state statutory or common law claims. The first consideration is that "the work of authorship in which rights are claimed must fall within the `subject matter of copyright' as defined in §§ 102 and 103 of the Act." Harper & Row, Publishers, Inc. v. Nation Enterprises, 723 F.2d 195, 200 (2 Cir., 1983), rev'd on other grounds, 471 U.S. 539, 105 S.Ct. 2218, 85 L.Ed.2d 588 (1985); see also Data General Corporation v. Grumman Systems Support Corporation, 795 F.Supp. 501, 505 (D.Mass., 1992); Quincy Cablesystems, Inc. v. Sully's Bar, Inc., 650 F.Supp. 838, 849 (D.Mass., 1986). There is no question that the first prong of the preemption test is met in the instant case, the jury having found that Kennedy & Co. was the owner of an original work protected by the Copyright Act. See, Jury Verdict #29, question 1.

The second consideration in the two-part preemption analysis is whether the state law asserted by a claimant creates "legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106." 17 U.S.C. § 301(a). This requirement has been construed as meaning

When a right defined by state law may be abridged by an action which, in and of itself, would infringe one of the exclusive rights, the state law in question must be deemed preempted. Conversely, when a state law violation is predicated upon an act incorporating elements beyond mere reproduction or the like, the rights involved are not equivalent and preemption will not occur.

Harper & Row, Publishers, Inc. v. Nation Enterprises, supra, 723 F.2d at 200 (citations omitted); Computer Associates International, Inc. v. Altai, Inc., supra, 982 F.2d at 716; Data General Corporation v. Grumman Systems Support Corporation, supra, 795 F.Supp. at 505; Quincy Cablesystems, Inc. v. Sully's Bar, Inc., supra, 650 F.Supp. at 849. The "extra element" necessary to prove the state law claim must be such as to render that claim "qualitatively different" from a copyright claim in order to avoid preemption. Harper & Row, Publishers, Inc. v. Nation Enterprises, supra, 723 F.2d at 201; Computer Associates International, Inc. v. Altai, Inc., supra, 982 F.2d at 716. In other words, "an action will not be saved from preemption by elements such as awareness or intent, which alter `the action's scope but not its nature ...'" Computer Associates International, Inc. v. Altai, Inc., supra, 982 F.2d at 717 (citation omitted). The issue is whether the nature of the state-created right is so qualitatively similar to the rights protected by the Copyright Act as to be deemed equivalent and, consequently, preempted. Data General Corporation v. Grumman Systems Support Corporation, supra, 795 F.Supp. at 505.

In applying the section 301 preemption provision, courts focus not upon the label affixed to the state cause of action, but rather upon "`what plaintiff seeks to protect, the theories in which the matter is thought to be protected and the rights sought to be enforced.'" Computer Associates International, Inc. v. Altai, Inc., supra, 982 F.2d at 716 (citation omitted). For example, in the Quincy Cablesystems case, a cable program provider, NESN, alleged that the defendants' unauthorized reception of its satellite signals and subsequent presentation of NESN programs to their patrons constituted conversion. The Court concluded that the rights NESN sought to protect by virtue of its state law claim, i.e., the rights of distribution, performance and display, fell squarely within the rights protected by section 106 of the Copyright Act. Because the state and federal rights were equivalent, the conversion claim was preempted. Quincy Cablesystems, Inc. v. Sully's Bar, Inc., supra, 650 F.Supp. at 848-850; see also Harper & Row Publishers, Inc. v. Nation Enterprises, supra, 723 F.2d at 199-201.

A conversion claim was also asserted in the Data General case. However, in that situation, Data General alleged that the defendant physically took possession and retained copies of copyrighted software owned by the plaintiff. Although the defendant argued that Data General's true complaint was that it had copied and used the software, the Court concluded that Data General had stated a viable conversion claim for the wrongful possession of physical property that was not preempted by section 301. Data General Corporation v. Grumman Systems Support Corporation, supra, 795 F.Supp. at 505-506.

Similarly, courts have determined that state law causes of action premised on theories such as misappropriation or unfair competition wherein the allegations are concerned solely with the copying or replication of protected works of authorship are preempted. See, e.g., Computer Associates International, Inc. v. Altai, Inc., supra, 982 F.2d at 717; Durham Industries, Inc. v. Tomy Corporation, 630 F.2d 905, 918-919 (2 Cir., 1980); Data General Corporation v. Grumman Systems Support Corporation, supra, 795 F.Supp. at 506; Peckarsky v. American Broadcasting Co., Inc., 603 F.Supp. 688, 695-696 (D.D.C., 1984); Schuchart & Associates v. Solo Serve Corporation, 540 F.Supp. 928, 943-945 (W.D.Tex., 1982). However, when an "extra element" qualitatively differentiates the nature of the state-created interest sought to be protected, the claim is not abrogated by section 301. See, e.g., National Car Rental System, Inc. v. Computer Associates International, Inc., 991 F.2d 426, 430-434 (8 Cir., 1993); Computer Associates International, Inc. v. Altai, Inc., supra, 982 F.2d at 717-719; Data General Corporation v. Grumman Systems Support Corporation, supra, 795 F.Supp. at 506-507; Intown Enterprises, Inc. v. Barnes, 721 F.Supp. 1263, 1267 (N.D.Ga., 1989); Stillman v. Leo Burnett Company, Inc., 720 F.Supp. 1353, 1361-1363 (N.D.Ill., 1989); Nash v. CBS, Inc., 704 F.Supp. 823, 832-833 (N.D.Ill., 1989); Schuchart & Associates v. Solo Serve Corporation, supra, 540 F.Supp. at 945.

Massachusetts General Laws Chapter 93A prohibits "unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." M.G.L.A. ch. 93A § 2. There is caselaw to support the proposition that not every copyright infringement establishes a violation of Chapter 93A. In Williams v. Arndt, 626 F.Supp. 571 (D.M...