## Facts

- Home Box Office (HBO) sought advertising concepts to address declining subscriptions and contacted Katz, Dochtermann & Epstein, Inc. (KDE), a New York advertising agency.
- KDE developed and presented an advertising campaign centered on the slogan “It’s Not TV, It’s HBO,” intending to differentiate HBO from other television programming.
- KDE created sample print ads, storyboards, advertising copy, and an original music composition implementing the campaign concept.
- KDE presented the campaign to HBO executives and left the promotional materials with HBO after the presentation.
- KDE alleged that for more than a year after the presentation, HBO continued to indicate it was considering purchasing KDE’s campaign.
- HBO later announced and began running a national campaign using the phrase “It’s Not TV, It’s HBO,” which ran continuously thereafter.
- HBO contended the campaign was independently developed by its other advertising agency, BBDO Worldwide, Inc. (BBDO).
- KDE sued HBO and BBDO asserting federal copyright infringement and state-law claims including unfair competition, unjust enrichment, and breach of an implied-in-fact contract to pay if HBO used KDE’s submission.

## Issues

1. Whether KDE’s state-law claims for unfair competition and unjust enrichment, based on defendants’ alleged unauthorized use of KDE’s advertising materials and concept, are preempted by the Copyright Act under 17 U.S.C. § 301.
2. Whether KDE’s state-law claim for breach of an implied-in-fact contract to pay for use of the submitted campaign is preempted by 17 U.S.C. § 301, or instead includes an extra element avoiding preemption.

## Decision

- The court granted in part and denied in part defendants’ motion to dismiss the state-law claims.
- The unfair competition and unjust enrichment claims were dismissed as preempted by the Copyright Act.
- The implied-in-fact contract claim was not preempted and was allowed to proceed.

## Legal Principles

- Copyright Act § 301 preempts state-law claims when (1) the work falls within the subject matter of copyright and (2) the state-law rights asserted are equivalent to the exclusive rights protected by copyright.
- Unfair competition and unjust enrichment claims predicated on unauthorized copying or use of protected expression, without a qualitatively different element, are equivalent to copyright and are preempted.
- A state-law implied-in-fact contract claim based on an alleged promise to pay for use of submitted ideas includes an extra element (a consensual promissory obligation) and is not equivalent to copyright.
- A plaintiff cannot avoid § 301 preemption by re-labeling a claim that, in substance, seeks relief for unauthorized copying of protected materials.

## Conclusion

The court held that KDE’s state-law theories seeking recovery for unauthorized use of its advertising materials were preempted by § 301, but KDE could proceed on an implied-in-fact contract theory because it sought to enforce a separate promise to pay for use of the submitted campaign.


Katz, Dochtermann & Epstein, Inc. v. Home Box Office, 50 U.S.P.Q.2d (BNA) 1957 (S.D.N.Y. 1999)