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Parsing the Copyright Preemption Issue in Claims for Breach of Implied-in-Fact Contracts

BY Stan Soocher
June 30, 2011

The U.S. Court of Appeals for the Ninth Circuit recently reconfirmed the long-established principle that, under California law, an implied-in-fact contract claim over an alleged promise to pay for use of an idea or concept isn't preempted by federal copyright law. Montz v. Pilgrim Films & Television Inc., 98 U.S.P.Q.2D (BNA) 156 (9th Cir. 2011). But for years, many studios have required parties to sign submission agreements that limit studio liability when ideas, concepts and scripts are pitched to the studios. Notably, the Ninth Circuit's decision in Montz was a reminder of the different approach that courts in the Second Circuit have taken in finding whether implied contract claims are subject to copyright preemption.

Ghost of an Idea

In Montz, parapsychologist Larry Montz and his publicist Daena Smoller alleged in a complaint in the Central District of California that, for several years beginning in 1996, they had pitched Montz's concept for a reality TV series about “paranormal investigators” to studios that included NBC Universal and what today is the SyFy Channel. But the Montz plaintiffs claimed that instead of partnering with Montz, NBC and Pilgrim Films & Television produced the paranormal-investigators series Ghost Hunters for NBC's SyFy. The district court found federal copyright law preempted both the plaintiffs' state-law claims for breach of implied-in-fact contract and of confidential relationship; later, Montz and Smoller agreed to drop their copyright infringement claim.

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