USDC N.D. California, January 5, 2009 (not for publication)

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The District Court for the Northern District of California dismissed plaintiff’s state law breach of contract claim, relating to an “open source” software license, because it is preempted by the Copyright Act.

The plaintiff owns the copyright to software that allows model railroad enthusiasts to use their computers to program the decoder chips that control model trains. The plaintiff provides his software on a web site for free, pursuant to an Artistic License. The terms of the license allow a user to make modifications to the program and distribute the program provided that the user follows the restrictive terms of the Artistic License, which include the need for any modification of plaintiff’s software to contain certain disclosures and explanation of changes.

In a prior decision in this case, the district court ruled that plaintiff could challenge defendants’ violation of the open source license as a breach of contract, but not as copyright infringement. The Court of Appeals for the Federal Circuit vacated that decision and remanded the case to the district court, holding that the copyright owner for the licensed material had made out a prima facie case for infringement. Jacobsen v. Katzer, 535 F.3d 1373 (Fed. Cir. 2008). (We summarized the Federal Circuit’s decision in August, 2008.)

Here, defendants moved to dismiss plaintiff’s breach of contract claim, as well as to dismiss claims of patent infringement and violation of the Digital Millennium Copyright Act (DMCA). Defendants also moved to strike plaintiff’s prayer for attorney’s fees. Plaintiff moved for a preliminary injunction against defendants’ willful copyright infringement.

The court dismissed plaintiff’s breach of contract claim on alternative grounds: failure to state a claim under FRCP 12(b)(6) and preemption. The court first granted defendants’ motion to dismiss the state law cause of action for failure to state a claim, finding that plaintiff had “failed to allege a specific harm that was proximately caused by the alleged breach of the terms of the Artistic License.”

The court then discussed preemption as alternative grounds for dismissing the claim. Applying the first prong of the two-part test for preemption under Section 301 of the Copyright Act, the court found that the breach of contract claim, which related to use of plaintiff’s decoder definition files, addressed subject matter within the Copyright Act. The contract claim also satisfied the second prong of the preemption test because the contract claim had no “extra element” protecting rights qualitatively different from exclusive rights protected under Section 106 of the Act. Specifically, the court found that the contract claim asserted rights identical to the “exclusive right to reproduce, distribute and make derivative copies.”

The court granted defendants’ motion to dismiss plaintiff’s patent infringement claim as moot because defendants disclaimed the disputed patent. Defendants’ motion to dismiss plaintiff’s claim under the DMCA was denied, as was defendants’ motion to strike plaintiff’s prayer for attorney’s fees. The court also denied plaintiff’s motion for preliminary injunction against defendants’ willful copyright infringement because plaintiff failed to put forward any evidence of actual injury to support his claim of irreparable injury.