Federal Preemption of Shrinkwrap and On-Line Licenses

University of Dayton Law Review, Vol. 22, p. 511, 1997

35 Pages Posted: 29 May 2009

See all articles by Dennis S. Karjala

Dennis S. Karjala

Arizona State University College of Law

Date Written: 1997


For works that have been widely distributed, the fundamental copyright balances are not subject to private reordering under state contract law. Judge Easterbrook's overreliance on narrow law-and-economics reasoning caused him to miss the critical public interest analysis when he upheld the shrinkwrap license in ProCD, Inc. v. Zeidenberg. This article stresses the important distinction between commercialized and noncommercialized works. It argues that United States copyright law is and should remain philosophically based firmly in instrumentalist rather than natural rights views, but that in any event there is no denying the strong public interest not only in rewarding past creators but also in nurturing current and future creators. The decision in the 1976 Copyright Act to bring unpublished works into the federal scheme did not change any of the fundamental policy tradeoffs for widely distributed, but represented a federalization for housekeeping and efficiency purposes of the old common law right of first publication. The policy balances with respect to such rights of first publication are very different from those governing widely distributed works, and in that sense we actually still have two copyright laws operating in parallel.

Once that foundation has been laid and the public nature of the policy tradeoffs applicable to widely distributed works brought into focus, it follows directly that state enforcement of purported contracts or licenses that restrict basic users' rights reserved to the public by the copyright statute would fundamentally frustrate the federal scheme. The article therefore concludes that state contract law must, to this extent, be preempted by federal copyright. It is clear that the correct answer can be achieved only through full and fair consideration of the public benefits that flow from the free use of information as well as from the incentives supplied by intellectual property law to the creators of information products. Judicial validation of contracts that wholly tilt the balance in favor of the producers at the expense of users and the general public cannot be right.

Keywords: Copyright, 1976 Copyright Act, ProCD, Inc. v. Zeidenberg

Suggested Citation

Karjala, Dennis S., Federal Preemption of Shrinkwrap and On-Line Licenses (1997). University of Dayton Law Review, Vol. 22, p. 511, 1997. Available at SSRN: https://ssrn.com/abstract=1411451

Dennis S. Karjala (Contact Author)

Arizona State University College of Law ( email )

Box 877906
Tempe, AZ 85287-7906
United States
480-965-4010 (Phone)
480-965-2427 (Fax)

HOME PAGE: http://www.public.asu.edu/~dkarjala

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