Ultraflo Corp. v. Pelican Tank Parts, Inc., No. 15-20084 (5th Cir. Jan. 11, 2017)
A nice citation for the proposition that §301 preemption covers both copyrightable and uncopyrightable matter. Ultraflo argued that Pelican engaged in unfair competition by misappropriation claim by stealing Ultraflo’s drawings showing how to design valves and then used them to make duplicate valves. Ultraflo argued that its claim escaped preemption because its valve design, when separated from the drawing itself, was uncopyrightable. But “copyright preemption prohibits state interference with Congress’s decision not to grant copyright protection just as much as it protects a decision to provide protection.”
The drawings of the valves were copyrightable; they were the basis of a copyright infringement claim rejected by the jury below. But the misappropriation claim was based on copying the valve design, not copying the drawings. The valve design was either a useful article or an idea, and not copyrightable, but preemption covers more than copyrightable works; §301 preempts state protection for works within copyright’s subject matter, including useful articles, whether or not they are copyrightable. “[S]cope and protection are not synonyms.” The court noted that “the exclusion of useful articles from copyright protection is a corollary of the idea-expression dichotomy”; allowing state-law protection for useful articles would undermine their deliberate exclusion from the federal scheme.
Was plaintiff claiming a right equivalent to that granted by copyright? The Copyright Act doesn’t grant the owner of a drawing of a useful article to control the making of the useful article—but preemption is more general than just what would infringe copyright. “The question is not whether state law provides a right identical to federal copyright law, but whether state law provides a right akin to those ‘within the general scope of copyright as specified by section 106’” (emphasis added). And the exclusive rights generally include the right to make derivative works. Indeed, §113(b), by making clear that the owner of the copyright in technical drawings can’t prevent making the articles, “recognizes that such derivative use may otherwise be protected by the copyright laws.” The key issue was not the rights Congress actually provided but “the type of rights it has the power to confer. Withholding a particular right is part of the balance Congress struck between the need for copyright incentives and the value in public access to ideas.” The exclusion also protected the patent/copyright line.
Unfair competition by misappropriation lacked the necessary extra element to escape preemption. Sweat equity, use against a competitor, and intent don’t count as extra elements.