Law School Case Brief
Pollstar v. Gigmania Ltd. - 170 F. Supp. 2d 974 (E.D. Cal. 2000)
In the context of preemption, it is generally agreed that a "hot news" claim survives preemption. The elements central to a "hot news" claim are (1) the plaintiff generates or collects information at some cost or expense, (2) the value of the information is highly time-sensitive, (3) the defendant's use of information constitutes free-riding on the plaintiff's costly efforts to generate or collect it, (4) the defendant's use of the information is in direct competition with a product or service offered by the plaintiff, (5) the ability of the other party to free-ride on the efforts of the plaintiff would so reduce the incentive to produce the product or service that its existence or quality would be substantially threatened.
Plaintiff Pollstar created and developed up-to-the-day time sensitive concert information and published that information daily on its web site, www.pollstar.com. Users of the website could download and use information pursuant to conditions of a license agreement. According to Pollstar, defendant Gigmania Ltd. copied information from pollstar.com and posted it on its own website, www.gigmania.com. Pollstar filed a lawsuit against Gigmania in federal district court alleging claims for common law misappropriation, unfair competition under Cal. Bus. & Prof. Code § 17200, and breach of contract of the license agreement. Gigmania filed a motion to dismiss for failure to state a claim.
(1) Were Pollstar's misappropriation and unfair competition claims preempted by the Copyright Act? (2) Did Pollstar's breach of contract claim fail as a matter of law?
(1) No; (2) No.
The court denied Gigmania's motion to dismiss. The court ruled that Pollstar's misappropriation claim was not preempted by the Copyright Act ("Act") because Pollstar had sufficiently pleaded that claim as a "hot news" claim. The court further ruled that Pollstar's unfair competition claim was not by the Act because Pollstar had asserted reverse palming off. This changed the nature of the unfair competition claim for misappropriation of time and effort. The court was unwilling to decide that the breach of contract claim failed because it lacked mutual consent as asserted by Gigmania. As to the breach of contract claim, the court held that while users of Pollstar's website were not immediately confronted with the notice of the license agreement, that lack of notice did not dispose of Pollstar's breach of contract claim. Noting federal appellate decisions on similar matters, the court was hesitant to declare the invalidity and unenforceability of Pollstar's browse wrap license agreement.
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