## Facts

- Dr. Larry Montz and Daena Smoller developed a concept for a paranormal-investigation reality television series involving a team that visits locations and uses investigative tools to confirm or debunk paranormal reports.
- They prepared written materials and treatments and pitched the concept to studios and producers, including representatives associated with NBC and the Sci-Fi Channel.
- They alleged the pitches were made on the express condition and mutual understanding that they would be compensated (including a share of profits) if the idea was used.
- NBC Universal later partnered with Pilgrim Films to produce *Ghost Hunters* for the Sci-Fi Channel.
- Montz and Smoller alleged *Ghost Hunters* used their submitted materials and sued asserting copyright infringement and California state-law claims, including breach of implied-in-fact contract and breach of confidence.
- The district court dismissed the state-law claims as preempted by the Copyright Act; a Ninth Circuit panel affirmed; the Ninth Circuit reheard the case en banc.

## Issues

1. Whether a California *Desny*-type implied-in-fact contract claim based on an alleged promise to pay for use of an idea is preempted by Copyright Act § 301.
2. Whether a related California breach-of-confidence claim based on alleged misuse of a confidential submission is preempted by Copyright Act § 301.

## Decision

- The en banc Ninth Circuit reversed the dismissal and remanded.
- The court held the implied-in-fact contract claim was not preempted because it required proof of an extra element—mutual assent and a bilateral expectation of compensation for use of the idea.
- The court held the breach-of-confidence claim was not preempted because it required proof of an extra element—breach of a duty of trust/confidentiality.
- The court rejected the view that an expectation of a profits interest was materially different from an expectation of monetary payment for preemption purposes.

## Legal Principles

- Copyright Act § 301 preempts state-law claims only when the state right asserted is equivalent to rights within the general scope of copyright and no extra element makes the claim qualitatively different.
- A California implied-in-fact contract claim for idea submission (*Desny* claim) is not preempted when the plaintiff alleges a bilateral understanding that the idea may be used only with compensation.
- Contract-based duties arise from voluntary promises and mutual assent, not from copying alone; enforcing such obligations is not equivalent to enforcing exclusive copyright rights.
- A breach-of-confidence claim is not preempted when it turns on breach of a trust/confidential relationship, an element not required for copyright infringement.
- By contrast, claims that merely seek recovery for unauthorized use without a promise or confidential duty (such as unjust enrichment theories based solely on use) are more likely to be preempted.

## Conclusion

The Ninth Circuit held that California claims for breach of an implied-in-fact contract to pay for use of an idea and for breach of confidence can proceed alongside copyright claims because they require proof of additional elements—mutual assent to compensate and breach of trust—making them qualitatively different from copyright infringement.


Montz v. Pilgrim Films & Television, Inc., 649 F.3d 975 (9th Cir. 2011) (en banc)