Monday, July 27, 2015

Pre-emption of state trade secret law by federal copyright law

From the JDSupra post Fifth Circuit Revisits Copyright Preemption of Trade Secret Law :

On appeal, the Fifth Circuit analyzed preemption in two steps. First, the court determined “whether [the claim] falls within the subject matter of copyright.” Second, “the cause of action is examined to determine if it protects rights that are ‘equivalent’ to any of the exclusive rights of a federal copyright.” The Fifth Circuit joined other circuit courts (including the First, Third, Seventh, and Ninth Circuits) in finding that “state law claims based on ideas fixed in tangible media are preempted by § 301(a).” It found that the Spear Marketing’s claims were within this scope of preemption because: 1) computer software is a tangible medium; and 2) input/output data from VaultWorks is a trade secret. When addressing the second prong, the court found that the allegations of copying, communicating, and transmitting were equivalent to the reproduction and distribution rights under Copyright Law.

One wonders if the trend of courts requiring greater specificity in trade secrets (which might be advanced by fixing the ideas in tangible media), will run afoul of preemption?


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