Grosso v. Miramax Film Corp.
2004 WL 1977668, 383 F.3d 965 (2004)
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Rule of Law:
A state law claim for breach of an implied-in-fact contract to pay for the disclosure of an idea is not preempted by the federal Copyright Act because the required promise to pay constitutes an "extra element" that makes the claim qualitatively different from a copyright infringement claim.
Facts:
- Jeff Grosso wrote a screenplay titled 'The Shell Game'.
- Grosso submitted his screenplay and its ideas to Miramax Film Corp. for their consideration.
- The submission was allegedly made with the understanding and expectation, known to Miramax, that Grosso would be compensated if Miramax used his work.
- Grosso alleges that Miramax voluntarily accepted the disclosure of his work knowing the conditions upon which it was tendered.
- Subsequently, Miramax produced and released the movie 'Rounders'.
- Grosso believed that 'Rounders' utilized the ideas and themes from his screenplay, 'The Shell Game'.
- Miramax did not compensate Grosso for the alleged use of his ideas.
Procedural Posture:
- Jeff Grosso filed a lawsuit against Miramax Film Corp. in a federal district court, alleging copyright infringement and breach of an implied state-law contract.
- Miramax filed a motion for summary judgment on the copyright infringement claim.
- The district court granted Miramax's motion for summary judgment, finding the works were not substantially similar.
- Miramax also filed a motion to dismiss the state law contract claim under FRCP 12(b)(6), arguing it was preempted by the federal Copyright Act.
- The district court granted the motion to dismiss the state law claim.
- Grosso, as the appellant, appealed both the summary judgment and the dismissal to the U.S. Court of Appeals for the Ninth Circuit.
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Issue:
Does the federal Copyright Act preempt a state law claim for breach of an implied-in-fact contract to pay for the use of an idea embodied in a screenplay?
Opinions:
Majority - Schroeder, C.J.
No. A state law claim for breach of an implied-in-fact contract is not preempted by the Copyright Act. The Copyright Act preempts state law claims only when the work is within the subject matter of copyright and the state law rights are equivalent to the exclusive rights of copyright. To determine equivalency, the state law claim must contain an 'extra element' that makes it qualitatively different from a copyright claim. Here, the implied promise to pay for the disclosure of the idea, as required for a California 'Desny' claim, is that extra element. The claim is based on the contractual promise, not the unauthorized use of the copyrighted work itself, thus transforming the action from one under federal copyright law to one sounding in contract.
Analysis:
This decision clarifies the scope of Copyright Act preemption within the Ninth Circuit, particularly for idea submission claims common in the entertainment industry. It affirms the viability of state law implied contract claims (like California's 'Desny' claim) as a separate avenue for creators to seek compensation. By establishing that the promise to pay for an idea is an 'extra element' beyond the rights protected by copyright, the court ensures that creators can enforce contractual expectations even when their underlying work or idea does not succeed on a copyright infringement claim. This ruling reinforces the critical distinction between property rights in a creative work (copyright) and personal rights arising from an agreement (contract).
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