final question in the preemption analysis, whether the rights Philips-Miller seeks to vindicate under state law are equivalent to exclusive federal rights. A state law right is equivalent to a right protected by the Copyright Act if (1) it is infringed by the mere act of reproduction, performance, distribution, or display; or (2) it requires additional elements to make out a cause of action, but the additional elements are not different in kind from those necessary for copyright infringement. Baltimore Orioles, 805 F.2d at 678 n.26.
The question of whether a claim for the tort of misappropriation is preempted by the copyright act has split the courts in this district. However, the weight of the authority favors preemption of misappropriation claims.
While several courts have held that claims for misappropriation are preempted, see CEO Marketing Promotions v. Heartland Promotions, 739 F. Supp. 1150, 1152 (N.D. Ill. 1990) (claim for misappropriation of advertising materials preempted); Nash v. CBS, 704 F. Supp. 823, 833-35 (N.D. Ill. 1989) (state misappropriation claim for story about John Dillinger preempted by § 301), aff'd, 899 F.2d 1537 (7th Cir. 1990); Weigel Broadcasting Co. v. Topel, No. 83 C 7921, 1985 WL 2360 (N.D. Ill. filed Aug. 21, 1985) (Marshall, J.) (misappropriation claim concerning engineering data preempted), other courts have noted that while copyright protects against wrongful reproduction or another's work, misappropriation focuses on whether the tortfeasor actually used, not copied, another's property, and is therefore not preempted. See, e.g., McNabb Bennett & Associates v. Terp Meyers Architects, No. 85 C 8792, 1987 U.S. Dist. LEXIS 1787, 1987 WL 7817, *5 (N.D. Ill. March 10, 1987) (Williams, J.); Rand McNally & Co. v. Fleet Management Systems, 591 F. Supp. 726, 739 (N.D. Ill. 1983).
The legislative history shows that most, but not all misappropriation claims are preempted by section 301. In Nash, Judge Grady held that all misappropriation claims except those specifically excluded by Congress are preempted by section 301. Nash, 704 F. Supp. at 835 (citing H.R. 1476, 94th Cong., 2d sess., reprinted in, 1976 U.S.C.C.A.N. 5659). Thus, unless a misappropriation claim involves "'hot news'" or "valuable stored information," it is preempted under the Nash approach. Id. Under the McNabb and Rand McNally approach, however, a misappropriation claim is preempted where it seeks damage for copying but not where it seeks damages for the wrongful use of an idea.
In the present case, whether Philips-Miller's misappropriation claim seeks damages for wrongful copying or for wrongful use is not as simple as it might at first appear. Philips-Miller's counterclaim alleges that Searle "wrongfully adopted and used" Philips-Miller's proposal. (Def.'s Counterclaim P 10.)
Though Philips-Miller argues in its Supplement Memorandum that its misappropriation claim seeks damages for improper use of its idea, the way Philips-Miller has gone about proving its case muddies the water on this issue substantially. Though Philips-Miller argues that the present case is distinct from Nash because Nash involved the copying of a literary work, Philips-Miller has used precisely the same methods to prove its case as the plaintiff did in Nash: side-by-side comparisons of portions of the text. Cf. Def.'s Local Rule 12(n) at P 48, with Nash, 704 F. Supp. at 830. Philips-Miller's side-by-side comparison of numerous aspects of its March 1990 proposal with those of McAdam's August 1991 proposal certainly casts Philips-Miller's claim, at least in part, as one for improper copying.
In order to prevail in this case, Philips-Miller simply must prove that Searle reproduced and/or distributed Philips-Miller's 1990 proposal to McAdams. If Philips-Miller cannot do so, it will not be able to prevail over Searle's independent development defense. Thus, the very heart of Philips-Miller's misappropriation claim is that Searle wrongfully distributed its proposal to McAdams. As we noted above, a state right is equivalent to federal copyright protections if it is violated by, among other things, the mere "distribution" of the material. Baltimore Orioles, 805 F.2d at 677.
As we note above, determining whether's Philips-Miller's misappropriation claim is for "use" or for "copying" is not an easy task. However, whether it is characterized as improper "use" or improper "copying," the claim is the same as the one presented in CEO, and we believe that this claim is preempted:
CEO's explanation for its employment of the misappropriation tort is to protect against Heartland's "misuse of the Advertising Materials" . . . The alleged misuse was distribution of these advertising materials to Bankcard customers for enclosure to their cardholders. This is clearly equivalent to seeking copyright protection.
CEO Marketing, 779 F. Supp. at 1152.
Our decision is supported by a close reading of the legislative history of section 301. The House Report reveals that there was opposition to including unpublished advertising materials in the scope of section 301:
Representatives of printers, while not opposed to the principle of section 301, expressed concern about its potential impact on protection of preliminary advertising copy and layouts prepared by printers. They argued that this material is frequently "pirated" by competitors, and that it would be a substantial burden if, in order to obtain full protection, the printer would have to make registrations and bear the expense and bother of suing in Federal rather than State courts.