Cable Vision, Inc. v. KUTV, INC.

• Decision Date: 23 September 1964
• Docket Number: No. 18577.,18577.
• Citation: 335 F.2d 348
• Parties: CABLE VISION, INC., and Idaho Microwave, Inc., Appellants, v. KUTV, INC., The KLIX Corporation, et al., Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

335 F.2d 348 (1964)

CABLE VISION, INC., and Idaho Microwave, Inc., Appellants, v. KUTV, INC., The KLIX Corporation, et al., Appellees.

No. 18577.

United States Court of Appeals Ninth Circuit.

July 15, 1964.

Rehearing Denied September 23, 1964.

E. Stratford Smith, Robert E. Conn, Smith & Pepper, Washington, D. C., George Schiffer, Schiffer & Cohen, New York City, C. G. McIntyre, Parry, Robertson & Daly, Twin Falls, Idaho, for the appellants.

George M. McMillan, Salt Lake City, Utah, Edward L. Benoit, Twin Falls, Idaho, for the appellees.

Before ORR, HAMLEY and KOELSCH, Circuit Judges.

KOELSCH, Circuit Judge.

In response to an antitrust action brought against it, KLIX-TV, appellees here, filed the counterclaim which is the subject of this appeal. Claiming exclusive rights by virtue of contract to the first run of its affiliated network television programs, it asserted that under Idaho law the activities of community antenna operators, appellants here, constituted tortious interference with those contractual rights and unfair competition in that the community antenna receives identical programs broadcast by other and distant stations and distributes them for profit simultaneously with the KLIX airings.

An extended trial was had. The district judge rendered his decision by a written opinion reported in 211 F.Supp. 47 (D.C.Ida.1962). As a preliminary issue and before reaching the merits the District Court concluded that Congress had not pre-empted the adjustment of property rights in the communication field by passage of the Communications Act of 1934. We agree.

On the merits, the District Court granted relief on the alternative grounds that the activities of the antenna service constituted unfair competition and interference with contract under Idaho law. It noted the absence of state statute or relevant decision of the Idaho Supreme Court but nevertheless concluded that Idaho would recognize as part of its common law, claims for contract interference like those asserted by appellees. Additionally the court declared that appellants were guilty of both torts and issued an order based upon both grounds for the issuance of an appropriate injunction to preserve and make effective appellees' exclusive first-run rights to its affiliate network programs as against these appellants (but not against non-commercial individual antenna owners).

Before reaching its conclusion the court dealt at length with communications policy. Although it expressly recognized that Federal Communications policy was "* * * not determinative of the issues of the present case * *" (Cable Vision, Inc., v. KUTV, Inc., 211 F.Supp. 47, 55 D.C.Ida.1962), the court deemed it relevant. The court noted that Congress had as yet refused to extend F.C.C. regulation to the community antenna practice complained of despite specific proposals to the contrary. Nonetheless, the court found Congressional sanction for the result reached because Congress had not sought to "* * * abridge or alter the remedies now existing in the common law or by statute. (Sec. 414)." Cable Vision, Inc. v. KUTV, Inc., supra, 211 F.Supp. at 56.

After the appeal was taken and the matter had been submitted, the Supreme Court decided the companion cases of Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 84 S.Ct. 784, 11 L.Ed.2d 661 (1964), and Compco Corporation v. Day-Brite Lighting, Inc., 376 U.S. 234, 84 S.Ct. 779, 11 L.Ed.2d 669 (1964). On the suggestion of counsel for appellants that those decisions settled issues of law relevant to this case and were dispositive of this appeal, we vacated the order of submission and called for supplemental briefs. We also requested that the case of R. C. A. Mfg. Co. v. Whiteman, 119 4 F.2d 86 (2d Cir. 1940), cert. den. 311 U.S. 712, 61 S.Ct. 393, 85 L.Ed. 463, be evaluated to determine if it had new significance in view of the holdings in Sears and Compco. Supplemental briefs have now been filed and the case stands finally submitted.

II

At the outset, we note and emphasize that the trial court reached its conclusion "* * * without regard to and apart from any question of copyright ownership of particular program content," Cable Vision, Inc., v. KUTV, Inc. supra, 211 F.Supp. at 58. It held,

"* * * as a matter of common law under the doctrines of tortious interference with contractual rights, and under the doctrine of unfair competition as well, that one who contractually acquires, either expressly or impliedly by reference to a general industry wide custom, the exclusive right to the first call of entertainment programs, is entitled to protection of that valuable economic right, not only against the grantor, but also against acts of third persons which tortiously and unfairly prevent exploitation of the right or diminish its value." Ibid.

The unexamined premise in the holding and the cases cited in support of it is that common-law theories of recovery may be asserted to redeem what are in essence copyright interests. As we read Sears and Compco, however, only actions for copyright infringement or such common-law actions as are consistent with the primary right of public access to all in the public domain will lie.

In Compco, the court emphasized that the federal policy found in Art. I, § 8, Cl. 8 of the Constitution and in the implementing federal statutes is to allow "* * * free access to copy whatever the federal patent and copy-right laws leave in the public domain." 376 U.S. at 237, 84 S.Ct. at 782. The public domain was broadly delineated in Sears: that which is either not copyrighted, not copyrightable or on which the copyright has expired is in the public domain. 376 U.S. at 231, 84 S.Ct. 784.¹ See also Flamingo Telefilm Sales, Inc. v. United Artists Corp., 32 U.S. L.Week 2579 (May 12, 1964). Thus when an article is unprotected by a patent or copyright, state law may not forbid a person not the originator to merely copy and commercially exploit that article, for such a law would enable the originator to accomplish with the left hand of state authority what he was unable to accomplish with the right hand bearing the authority of the primary federal interest. Sears, Roebuck & Co. v. Stiffel Co., supra, 376 U.S. at 232-233, 84 S.Ct. 784. No state intrusion of the federal field is permissible unless the law of the state meshes in purpose and effect with the announced objectives of federal copyright law. Sears, Roebuck & Co. v. Stiffel Co., supra, 376 U.S. at 231, 84 S.Ct. 784. A limited ambit of operation is accorded state law but it may be exercised only insofar as consistent with the paramount federal interest. Compco Corp. v. Day-Brite Lighting, supra, 376 U.S. at 238, 84 S.Ct. 779. Accordingly, the Supreme Court expressly mentioned the state common-law action of unfair competition with the element of "palming off," an element Mr. Justice Holmes, concurring in International News Service v. Associated Press, referred to as "* * * an infusion of fraud * * * necessary to turn a flavor into a poison * * *" so as to permit "* * * a remedy from the law * * * without legislation * * *" (248 U.S. 215 at 247-248, 39 S.Ct. 68, at 75, 63 L.Ed. 211) as surviving its decision.² And state courts have subsequently decided that a state action based upon common-law copyright also survives (See Edgar H. Woods Associates Inc. v. Skene, Mass., 197 N.E.2d 886 May 19, 1964; Columbia Broadcasting System, Inc. v. Documentaries Unlimited, Inc., 42 Misc.2d 723, 248 N.Y.S.2d 809 April 14, 1964, a position which finds explicit support in Sears, 376 U.S. at n. 7, p. 231, 84 S.Ct. 784.

III

Applying Sears and Compco's composite thesis to the case at hand, we view it as dispositive of appellees' two grounds for relief. Save for the limited protection accorded the creator of literary and intellectual works under the Copyright Act or its exceptions — and here appellees concede they are not asserting a claim for copyright infringement — anyone may freely and with impunity avail himself of such works to any extent he may desire and for any purpose whatever subject only to the qualification that he does not steal good will, or, perhaps more accurately stated, deceive others in thinking the creations represent his own work.

Here the District Court enjoined activity that lacked the element of palming off. It is incontrovertible that all broadcasts are received and distributed by the community antenna without any modification of program content; therefore no question of "implied misrepresentation" by failing to give the originator proper credit, a misrepresentation present in International News Service v. Associated Press, supra, 248 U.S. 215, 39 S.Ct. 68 (1918), is involved in this case. We are clear that there is lacking that taint "necessary to turn a flavor into a poison" justifying judicial relief without Congressional authorization. To the extent, then, that the District Court holding extended a new protectible interest beyond what the copyright laws confer, it "* * * interfered with the federal policy * * * of allowing free access to copy whatever the federal patent and copyright laws leave in the public domain."³ Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234, 237, 84 S.Ct. 779, 782 (1964). This same principle likewise applies to appellees' claim of contract interference. Parties by the mere expedient of an exclusive contract can not "bootstrap" into existence rights from subject matter which at their source lie in the public domain. Desclee & CIE, S. A., v. Nemmers, 190 F.Supp. 381, 389 (D.C.Wis. 1961). Cf. Field v. True Comics, 89 N.Y.S.2d 35 (N.Y.Sup.Ct.1949). To allow these appellees relief on an alternative ground not substantially differing in gravamen from other relief foreclosed in operative effect by the Supreme Court's explicit holding would be to enshrine form at the expense of substance.

In sum,

"`The general rule of law,\' says Mr. Justice Brandeis International News Service v. Associated Press, supra, 248 U.S. at 250, 39

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