Harvard Business Review

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The courts are all over the board on this issue. It comes down to the interpretation of Section 301 of the Copyright Act that governs pre-emption of state law claims that conflict with federal policies embedded in the Copyright Act. Contracts are essentially instruments recognized and interpreted by state law. How they should be interpreted in light of federal policy (i.e., fair use) that may directly contradict the intent of the parties is the central issue here. Professor Nimmer provides the best summary of the current state of the law when he writes in Section 1.01[B][1][a] of his treatise that: "although the vast majority of contract claims will presumably survive scrutiny....nonetheless preemption claims should continue to strike down claims, that though denominated 'contract',nonetheless complain directly about the reproduction of?expressive materials."