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Did the 9th Circuit Just Open Pandora's Box?Justice Traynor once wrote, "The policy that precludes protection of an abstract idea by copyright does not prevent its protection by contract." Taking up where Justice Traynor left off, the Ninth Circuit recently decided Grosso v. Miramax Film Corp. (2004 U.S. App. LEXIS 18909), and the ramifications could be far-reaching. Of course, it's not the first time that the Ninth Circuit has issued a controversial decision. But if the Grosso decision holds up -- and that's not a "gimmie" either because the Ninth Circuit is the most over-turned circuit -- it certainly will be interesting to see what developments occur in IP law in the near future.The general facts before the Ninth Circuit are as follows: Plaintiff Jeff Grosso claimed that Miramax stole his ideas when, after reviewing his screenplay, Miramax made the movie Rounders. Grosso filed a lawsuit in federal court, claiming that Miramax and other defendants violated his copyright in his screenplay The Shell Game or alternatively breached an implied contract to pay the reasonable value of the material Grosso earlier had disclosed to Miramax. The trial judge didn't see merit in the claims, however, granting Miramax summary judgment on Grosso's copyright claim, and dismissing Grosso's contract claim on the ground it was preempted by the Copyright Act. On appeal, the Ninth Circuit upheld the lower court's ruling on the copyright claim, finding that the "two works [were] not substantially similar." Although the Court of Appeals acknowledged that "both works have poker settings," it went on to explain that "the only similarities in dialogue between the two works come from the use of common, unprotectable poker jargon." Having said that, the Ninth Circuit went on to reinstate Grosso's contract claim "because it alleges an extra element that transforms the action from one arising under the ambit of the federal statute to one sounding in contract." Emphasis is mine. You're probably wondering about the "extra element," right? Me too. Well, under California law, a claim for breach of implied contract may be maintained when the recipient of a "valuable idea" accepts the information knowing that compensation is expected, and subsequently uses the idea without paying for it. Desny v. Wilder (1956) 46 Cal.2d 715, 733. Yep, the Ninth Circuit actually blew the dust off an old California Supreme Court opinion and gave it new life. Unfortunately, in so doing, it raised a lot of difficult questions. For example, what will be the bright line test for distinguishing "valuable ideas" from non-compensable ones? Since the trial judge already determined that Miramax's work was not similar to Grosso's screenplay, Miramax's alleged expression of Grosso's idea will not necessarily be determinative. What if Grosso can only show that Miramax produced a film involving poker after its representatives reviewed and considered The Shell Game? Will that be enough? How far will this go? And what about damages? The Ninth Circuit cited Landsberg v. Scrabble Crossword Game Players, Inc. (9th Cir. 1986) 802 F.2d 1193, which involved the non-sanctioned use of a manuscript, as support for its decision in Grosso. While the Landsberg court acknowledged that contract damages are designed to give the non-breaching party the benefit of its bargain, or its equivalent, the Court of Appeals ultimately found that the defendant's profits were the best measure of loss for defendant's breach of contract -- not the fair market value of the defendant's use of the manuscript. So, then, in cases such as Grosso, is the trial judge supposed to disgorge any and all profits that Miramax made on Rounders even though the trial judge already found, as a matter of law, that the two works were not similar? What is the fair market value of a screenplay that is not used? What must recipients of other people's ideas now do to reduce their exposure to future claims of breach of implied contract? But I digress...and I really need to wrap this one up. In any event, to get around Miramax's preemption argument, the Ninth Circuit explained that the "bilateral expectation of compensation" for an implied contract was the so-called "extra element" that distinguished Grosso from other preemption cases, such as Del Madera Props. v. Rhodes & Gardner, Inc. (9th Cir, 1987) 820 F.2d 973. A simple review of the Del Madera opinion suggests, however, that the Ninth Circuit's conclusion is result-oriented. For instance, unlike Grosso whose copyright claim failed, Del Madera was successful in its copyright claim and sought further damages for unjust enrichment. In reaching its decision that Del Madera's state claim was preempted, the Ninth Circuit concluded that the breach of an implied promise not to use copyrightable subject matter without permission was the "equivalent to the protection provided by section 106 of the Copyright Act." How is that any different from the breach of an implied promise not to use Grosso's "idea" without permission, i.e., being compensated by Miramax? If Del Madera had brought a claim for breach of an implied contract, wouldn't the result still be the same? Can preemption be that easily defeated through artful pleading? Did the Ninth Circuit think this one through to the end? Perhaps the United States Supreme Court will help provide some answers if Miramax decides to take this battle to the next level. Love Canal Is No MoreI don't know if I'm ready for this. Love Canal started it all.The environmental movement, that is. One of the major areas where I practice law. Now, the beginning has come to an end. Love Canal was removed from the Superfund site list. Say it ain't so. It's actually a very good thing not to be on the list. Love Canal area was the first prominent site where hazardous waste dumping was discovered, having been dumped there for ten years, from 1942-1952. Without expressing an opinion whether anyone knew or not, the waste was then covered by dirt, and a developer built houses on the waste site. Residents started to complain about chemicals seeping into basements, and the USEPA conducted studies. The local water supply was affected. 950 families evacuated. Love Canal has generally been cited as the genesis for CERCLA (the Comprehensive Environmental Response, Compensation and Liability Act), typically known as Superfund, which serves to handle abandoned hazardous waste sites. The USEPA completed its work at the Love Canal site and claims that its monitoring studies show that the cleanup goals have been met. An era has passed. Widow Wins, Loses Environmental CaseHere's an excellent legal treatise on environmental law, including that ever-elusive statute of limitations on the timeliness of environmental claims.Parker v. Scrap Metal Processors, Inc.. Seems that Mrs. Parker lived next to a junkyard. And what a junkyard it was. It caused a significant amount of contamination on Mrs. Parker's property, including PCBs and the like. But, she didn't live there all the time even though she owned the property. Foreshadowing. See, Georgia nuisance law requires full-time occupancy. The 11th Circuit Court of Appeals interpreted that to mean that Mrs. Parker couldn't recover the $1.5 million the jury wanted to award to her. This ruling is contrary to the plaintiff is a widow theory of the law, which generally holds, of course, that widows don't lose court cases. Well, Mrs. Parker did win here, and the Court didn't reverse her entire win, just the damages portion. The Court said she couldn't recover damages for the time that she didn't live there (from 1998 on). But she still will recover something. We'll just have to wait a little longer to determine how much. Mrs. Parker will be back, you can rest assured. The Court awarded her attorneys fees. Difficult DecisionsI've faced this decision several times now, and am not looking forward to facing it again, but I know I will.You may not have yet, but as time ticks on, the possibilities increase. Death. Never an easy subject. Especially when it involves loved ones. In fact, we have a whole series of euphemisms built around the experience to shield us from its pain. Having to decide - play God - whether someone lives or dies is too much power. There've been movies about the consequences. Living wills can go a long way to solve the problems, but like the New York Times story (first link) notes, they can't anticipate all situations. Where does that leave us? After reading the NYT story, I'm left with this conclusion: talk to your family members, young and old, and find out what they want. Go over a variety of scenarios. Resolve family differences. That's the one thought that resonates for me. My Dad and I didn't get along all that well late in his life, but we were able to finally reach resolution over most everything and talk to each other periodically. My brother never got to that point. When our Dad died, my brother was left with a lot of things he had wanted to get resolved, but didn't. He wishes he had. I can't imagine what it would have been like had we needed to reach the life and death decisions in the NYT story. It would have been hell. So where does this quandary leave us? Give in. Talk to your family members. Mend wounds now. You won't regret it. The Debates and Why We Hire LawyersNo one at the concert talked about the debates tonight. In fact, I'd have to say that Peter White was great. Not quite the Hollywood Bowl, but the almost-finished-being-remodeled Hyatt Newporter always puts on a good show in the outdoor amphitheater.But people did talk today. About the debates. Right. A new subject for MIPTC. I generally steer away from politics. And religion. But, I'm going to make an exception tonight. So, how did George W. do? Well, how did Kerry do? Depends on who you ask. But that's not what this post is about. I have a few observations to offer to both candidates, and they have only a little to do with performance. Let's look at presidential fashion first. Why did Bush wear a blue tie? His handlers weren't paying attention. The background was blue, and Kerry sported a red tie, correctly hitting the old red, white and blue combination with his tie, shirt and background. Bush, on the other hand, was better lit. Check out his shoulders, and compare them - look again - to Kerry's disappearing eyes. All because Kerry wasn't underlit, and Bush was backlit, giving him the halo effect. Exacting details, maybe, but someone forgot the basics of three basics of television - lighting, lighting and more lighting. OK, that's all fine and dandy, but can we have a little bit of substance here? Let's see if I can do this without favoring one over the other. I'm going to pick on one missed opportunity, without trying to endorse either candidate. I'm just offering some 20/20 hindsight, Friday night quarterbacking. Alright. Here it is. But just one, tantalizing thought. Bush had the chance to really zing Kerry, but he dropped the ball. Here's the setup: Kerry lambastes Bush for not building a coalition in attacking Iraq. This accusation is not news - Kerry's been making the charge for some time. Kerry has also pushed bilateral talks with Korea. Also not news. No comment here on why Bush wasn't ready to attack these two points. So, when Kerry took both positions in the first debate, why did Bush hold back? Bush could have picked Kerry apart for taking inconsistent positions during the very debate he was in. To push bilateral talks with North Korea ignores the coalition Bush has built with China, South Korea and Russia - the exact opposite of Kerry's criticism of Bush's "lack" of a coalition in attacking Iraq. A skilled litigator would have made mincemeat of the flip-flop in positions, building further on Bush's main criticism of Kerry. A missed opportunity. Groan. "I agree." No, I Didn't Really Mean To, Though.How many times have you signed up to use an internet service and just clicked on the "I agree" button? Lots, if you're like me.But the real question is: do you read online agreements? Do I? Well, sometimes - especially if it's a bank or financial institution. But for the average, run of the mill website, admittedly, I don't. Ok, so sue me. That's exactly what happened to this guy. He signed up for AOL, put his email address book (1,500 addresses) online and ran into problems. Then, the inevitable call to tech support hell, with the person on the other end of the line that speaks an entirely different version of English. Long and short: our hero lost his 1,500 email addresses when he followed instructions to delete a folder. Whoops! So, being a lawyer (who else?), he sued for $5,000. And won. At least so far. AOL promises an appeal, based on prior precedent. Others, though, have different ideas. The lawyer filed the small claims case in New York, and the judge issued a written decision disagreeing with AOL's argument that venue was proper only in Virginia, where AOL's 91-page agreement says venue is proper. As Mark Fass of the New York Law Journal noted in the Judge's opinion, "'The general policy of giving effect to forum-selection clauses must yield to the scheme enacted by the Legislature specifically to ensure that civil justice is meaningfully accessible to those seeking the adjudication of small claims,' wrote [Civil Court Judge Debra R.] Samuels in her eight-page decision, Scarcella v. America Online, 1168/04." Did you catch that? An eight-page, written decision in a small claims case. You've got to know that Judge knew she was going to be appealed. As my disclaimer states, I'm not giving legal advice here. But I may start reading the fine print a little more closely. Nah. Taxing Tobacco To Tie Tongues?Is it legal to tax a business and then use that tax money to discourage people to buy from that business?Apparently so. California has a tax that takes money from the $0.87 per pack tax from R.J. Reynolds and Lorillard Tobacco Company, and then uses that tax money to run anti-smoking advertisements. The tobacco companies don't like the government spending their money to advocate quiting smoking. They claim it violates their First Amendment rights. But the Ninth Circuit didn't agree. "The implication of the tobacco companies' argument is that industries subject to an excise tax are entitled to a special veto over government speech funded by the tax," said Judge Raymond C. Fisher. The Court split, and ruled 2-1 in favor of California. The dissent in the case started its argument with a quote from Thomas Jefferson (who I frequently quote here). The quote read: "To compel a man to furnish contributions of money for the propagation of opinions which he disbelieves is sinful and tyrannical." The tobacco companies agreed with dissenter Judge Trott. You're right. This isn't the end of the story. You can be sure they'll be an appeal to the Supreme Court, challenging the Ninth Circuit's ruling. Tobacco wants to regulate the government's speech, and the government wants to regulate tobacco's sales. What do the rest of us want? Some want to smoke, and others don't want to - and don't want others to smoke, either. The First Amendment says I can say what I want - and I usually do here. But there are many instances of the government limiting what can't be said. Now the Supreme Court will have to determine whether the government can use our money to argue against our own speech. Next thing you know, the government will use my tax money to start a blog. Once A Marine, Always A MarineHere's an interesting website on the Viet Nam war. If you're interested in doing a bit of research, this is a good place to start.Plus, it's got a great audio lead-in of actual, spine-tingling radio communications and photographs. OohRah!.
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