Editorial Photocolor Archives, Inc. v. Granger Collection

94 A.D.2d 347, 464 N.Y.S.2d 506, 1983 N.Y. App. Div. LEXIS 17995

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: June 30, 1983
• Status: Published

Opinions

OPINION OF THE COURT

Kupferman, J. P.

The plaintiff, Editorial Photocolor Archives, Inc. (EPA), is in the business of leasing and licensing quality film transparencies and photographs for reproduction in books, magazines, films, etc. Among other things, EPA represents established archives of film and photographs, including that of Scala Instituto Fotográfico Editoriale (Scala), a repository located in Florence, Italy, which has photographs and transparencies for most of Europe’s major museums. In 1978' Scala granted EPA North American exclusivity for its materials.

The defendant, the Granger Collection (Granger), maintains a similar organization in direct competition with EPA.

In 1982, the plaintiffs, EPA and Scala, commenced this action alleging, as a first cause, that the defendant Granger had appropriated several Scala transparencies of famous works of art, removed the protective frame containing the Scala name and mark from the transparencies and replaced that frame with another bearing the Grangér name. It went on to complain that there were 11 such transparencies and that they were wrongfully being held out to the public as items for which Granger held the reproduction rights. It was contended that the acts involved constituted unfair competition and misappropriation against which an injunction was sought.

The second cause of action alleged piracy and appropriation of a business asset acquired by EPA from Scala and enhanced.

A third cause of action alleged violation under the anti-dilution statute, section 368-d of the New York General Business Law.

Injunctive relief, an accounting, compensatory and punitive damages were sought.

With the service of the summons and complaint, the plaintiffs moved, by order to show cause, for a temporary restraining order which was granted upon defendant’s default and which restrained Granger from acquiring or altering Scala transparencies or from selling or leasing the reproduction rights thereto.

Thereafter, the plaintiffs’ attorney wrote to the defendant informing it of the restraining order pending a determination of the motion for a preliminary injunction, which preliminary injunction was thereafter granted on default. Granger then moved to vacate the preliminary injunction and asserted affirmative defenses, among which was that the State court had no jurisdiction over the subject matter, because the three causes of action were grounded in copyright law and that, therefore, the field was pre-empted. Another affirmative defense was that the transparencies were in the public domain available for anyone’s use.

As to the default, it was contended by the defendant that it did not realize the time factor that was involved, and that due to irreparable harm, the preliminary injunction should be vacated.

The court at Special Term considered the matter as one to vacate the default in opposing a motion for a preliminary injunction and excused the default, but denied the motion to vacate.

It is in this posture that the matter comes before us on appeal.

The pre-emption provision with respect to the law of copyright (US Code, tit 17, § 301) has, as an exception thereto, “(b) * * * (3) activities violating legal or equitable rights that are not equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106.”

The purpose of the pre-emption was to bring some system of order into the protection of the copyright interest so that, among other things, State jurisdiction under common-law copyright should be subsumed by the Federal jurisdiction. (See Mentlik, Federal Preemption in the Field of Intellectual Creations — An End to the Common Law Copyright, 23 ASCAP Copyright Law Symposium 115; Goldstein, Federal System Ordering of the Copyright Interest, 69 Col L Rev 49.) In a similar vein, there has been established a new Court of Appeals for the Federal Circuit for patent matters to avoid substantial differences in the various Federal courts in the results of patent litigation and to provide nationwide uniformity in patent law. (See 37 Record of Assn of Bar of City of NY 732 [Dec., 1982]; Neuner, Patent and Trademark Law, NYLJ, June 8,1982, p 1, col 1.)

The issue is whether the Federal legislation was intended completely to pre-empt the field. (See Kewanee Oil Co. v Bicron Corp., 416 US 470,480; Goldstein v California, 412 US 546; Matter of Westinghouse Elec. Corp. v Tully, 55 NY2d 364, 372; The Preemption Doctrine: Shifting Perspectives on Federalism and the Burger Court, 75 Col L Rev 623, 639; Note, A Framework for Preemption Analysis, 88 Yale LJ 363.)

In Roy Export Co. Establishment of Vaduz, Liechtenstein v Columbia Broadcasting System (672 F2d 1095 [CA2d, 1982], cert den_US_, 103 S Ct 60), the court rejected a claim that the plaintiffs’ cause of action for unfair competítion was pre-empted by Federal copyright law. Of course, this was all in the Federal court so that it could be a pendent claim.

In the present situation and in view of the initial default by the defendant, we have a claim which is basically one for unfair competition, passing off and dilution. Until such time as it may be established that there is a substantial copyright question involved, which could not be asserted in the State court, the State court should continue to have jurisdiction. (Cf. RX Data Corp. v Department of Social Servs., 684 F2d 192 [CA2d, 1982];

* Fox v Wiener Laces, 74 AD2d 549 [concurring opn]; United States Trotting Assn. v Chicago Downs Assn., 665 F2d 781, 785, n 6.) For example, while copying a copyrighted photograph can be an infringement for which cause of action jurisdiction is in the Federal courts, obtaining a copy for the purpose of copying is not necessarily a copyright violation as the physical property has a distinct life of its own apart from the intellectual property. (See Rohauer v Killiam Shows, 551 F2d 484, 494, cert den 431 US 949.)

The order of the Supreme Court, New York County (Blyn, J.), entered August 17, 1982, which denied the defendant’s motion to vacate a preliminary injunction entered in the Supreme Court, New York County (B. Altman, J.), on June 21, 1982, should be affirmed with costs.

In this case, the court acknowledged that “even an infringement claim will not invoke federal jurisdiction when the claim is merely incidental to a primary dispute over copyright ownership under state law.” (684 F2d, at p 196.)