§ 301 Preemption Exercises
To test your understanding of the §301 preemption rules, determine whether §301 would preempt each cause of action. These problems appear on page 929 of the textbook.
1. The Cool Chicks, a rock band, sue Dave, their former manager, for unjust enrichment. As the basis for this claim, the Cool Chicks allege that Dave improperly retained certain master recordings belonging to the band and exploited these recordings for his own benefit.
While it is unclear exactly how Dave is exploiting the recordings — i.e., whether Dave is selling copies of the recordings or licensing unauthorized performances of the musical compositions — the gravamen of the claim appears to be that Dave is exercising rights that belong to the Cool Chicks under §106, so the claim is preempted.
2. The Cool Chicks, a rock band, sue Dave, their former manager, for unjust enrichment. As the basis for this claim, the Cool Chicks allege that Dave improperly managed the band’s artistic properties and has failed to account for royalties due from the band’s recordings.
Unlike the first unjust enrichment claim, this claim does not center on the unauthorized exploitation of copyrighted works, but rather on the receipt and retention of monetary benefits to which Dave was not entitled. The gravamen of the claim is that Dave owes the Cool Chicks an accounting, and this claim is not preempted.
3. The Cool Chicks, a rock band, sue Dave, their former manager, for conversion. As the basis for this claim, the Cool Chicks allege that Dave has improperly retained certain master recordings belonging to the band.
This claim alleges conversion of physical property, not intangible property. It is not preempted.
4. Hilltop, a software company, sues Valley Software, its main rival, for unfaircompetition. As the basis for this claim, Hilltop alleges that Valley has approachedits main customers and falsely represented that Valley’s own software program,which costs less than Hilltop’s, will perform the same functions as Hilltop’sprogram.
This claim is grounded on an allegedly false representation by Valley about the capabilities of its software as compared to Hilltop’s software. It is not preempted.
5. Hilltop, a software company, sues Valley Software, its main rival, for unfair competition. As the basis for this claim, Hilltop alleges that Valley has approached its main customers and offered to sell them a program that will perform the same functions in the same way as Hilltop’s program, but for a lower price. In fact, Valley’s program does perform the same functions in the same way as Hilltop’s program.
Unlike the first unfair competition claim, this claim seems merely to allege that Valley copied Hilltop’s software and is seeking to compete with Hilltop in the marketplace. It is preempted.
6. Jack and Jill, the principals of Hilltop, decide to dissolve their business partnership. Jill, who managed the financial side of the business, sues Jack, who managed the technical side of the business, for breach of fiduciary duty. As the basis for this claim, Jill alleges that Jack sold hundreds of copies of Hilltop’s software ‘‘out the back door’’ without reporting the sales. Jack responds that he is the sole author of the program in question and that Jill’s claim is preempted by §101 of the Copyright Act, which defines the requirements for joint authorship.
Although Jack is trying to make it appear as though Jill is simply asserting an authorship claim that she does not have and seeking an accounting as a coauthor, that is not what Jill is arguing. Nor is Jill simply complaining about unauthorized copying. Instead, Jill is arguing that Jack’s obligations as a fiduciary for the partnership required him to account for the sales that he made. This latter claim is not preempted.