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24
ciency of a written transfer of an exclusive license are contract right claims were not preempted because the
deemed matters of federal copyright law, not state con- general scope requirement was not met." 282
tract law."273 The commentator argues that "Supremacy
Clause preemption would occur [when] contract terms Guidance Number 13
undermine the objectives of federal copyright law."274 Although real-time data as such are not copyright-
Although some courts have refused to enforce contracts able, the majority view seems to be that a license or
that provide copyright-like protection to facts or un- other agreement with provisions restricting access to or
original databases in the belief that the Copyright Act use or dissemination of data are not preempted by the
preempts such contracts, the majority view appears to Copyright Act. The rationale is that contracts affect the
be that such contractual clauses are not preempted and rights of the parties to the contract and do not involve
are enforceable.275 exclusive rights against the world as exist under the
As the 11th Circuit has observed, "courts generally copyright laws.
read preemption clauses to leave private contracts unaf-
fected."276 The basis of the apparent majority rule is that C. Transit Agencies' Survey Responses Regarding
"[a] copyright is a right against the world," whereas Laws and Contractual Issues
"[c]ontracts...generally affect only their parties" and do
277
not "create `exclusive rights.'" For example, in ProCD, 1. Laws Applicable to Contracts and Real-Time Data
Inc. v. Zeidenberg,278 a customer purchased the plain-
The survey of transit agencies for the digest sought
tiff's CD-ROM in which ProCD had compiled informa-
to identify any laws and contractual issues of which
tion from more than 3,000 telephone directories into a
they were aware that are pertinent to transit agencies'
computer database and proceeded to resell it. The court
agreements for the collection or sharing of real-time
held that the contract or license at issue that limited
data. Twenty-seven transit agencies responding to the
the use of the program to noncommercial purposes was
survey stated that they did not know, or were unaware,
enforceable. The contract or license, which the court did
of any applicable laws or stated that the question was
not seek to distinguish, was not unenforceable on the
inapplicable. Three agencies responded that any issues
theory that Section 301(a) of the Copyright Act had pre-
would be covered by the agency's contract.283
empted the parties' ability to restrict the dissemination
One agency responded that "[t]o the best for our
of facts that Congress had decided should be in the pub-
knowledge, the only such regulations are federal in na-
lic domain. The court explained that
[O]ne function of § 301(a) is to prevent states from giving
282
special protection to works of authorship that Congress Nat'l Basketball Ass'n, 105 F.3d at 850. Firoozye v. Earth-
has decided should be in the public domain, which it can link Network, 153 F. Supp. 2d 1115, 112627 (N.D. Cal. 2001)
accomplish only if "subject matter of copyright" includes (stating that "[w]here a plaintiff's breach of contract claim only
all works of a type covered by sections 102 and 103, even asserts that a defendant violated a promise not to use a certain
279
if federal law does not afford protection to them. work, that breach of contract claim is preempted," but holding
However, the court held that, unlike the copyright that "[a] promise to pay for a work constitutes an extra ele-
ment such that a breach of contract claim is not preempted by
laws, a contract usually only affects the rights of parties
section 301"); Wolff v. Inst. of Elec. & Elecs. Eng'rs, Inc., 768 F.
to the contract and does not involve exclusive rights Supp. 66, 69 (S.D.N.Y. 1991) (contract claim preempted). See,
280
within the meaning of the Copyright Act: however, Huckshold v. HSSL, LLC, 344 F. Supp. 2d 1203 (E.D.
"[c]ontracts...generally affect only their parties; strang- Mo. 2004) (contract claim not preempted); Telecom Tech. Servs.
ers may do as they please, so contracts do not create Inc. v. Rolm Co., 388 F.3d 820, 82930 (11th Cir. 2004) (con-
`exclusive rights.'"281 tract claim not preempted); Lipscher v. LRP Publ'ns, Inc., 266
It may be noted that the Second Circuit in the Na- F.3d 1305, 1318 (11th Cir. 2001) (no preemption of contract
tional Basketball Association case, stated that "the mis- claim); Nat'l Car Rental Sys., Inc. v. Computer Assocs. Int'l,
appropriation claims [were] preempted" but that "the Inc., 991 F.2d 426, 431 (8th Cir. 1993) (restrictions on use may
constitute an additional element making a breach of contract
273
not equivalent to a copyright action); ProCD, Inc. v. Zeiden-
Id. at 33435 (footnote omitted). berg, 86 F.3d 1447, 1454 (7th Cir. 1996) (holding that a claim
274
Id. at 339 n.111 (citation omitted). for breach of contract was not equivalent to the exclusive rights
275
See ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. protected by the Copyright Act); Taquino v. Teledyne Monarch
1996). Rubber, 893 F.2d 1488, 1501 (5th Cir. 1990) (holding that be-
276
Lipscher, Inc., 266 F.3d at 1318. cause a breach of contract action involves a promise that is in
277 addition to the mere reproduction, distribution, or display of a
Huckshold, 344 F. Supp. 2d at 1207.
278 work, the contract claim was not preempted by § 301 of the
86 F.3d 1447 (7th Cir. 1996).
279
Copyright Act).
Id. at 1453 (citation omitted). 283
One agency responded that it "normally requires each
280
Id. at 1454 (citing Nat'l Car Rental Sys., Inc. v. Computer contract to contain provisions that give it rights to contract
Assocs. Int'l, Inc., 991 F.2d 426, 433 (8th Cir. 1993); Taquino v. data." BART's response was that it "address[ed] rights and
Teledyne Monarch Rubber, 893 F.2d 1488, 1501 (5th Cir. ownership in our form of agreement." Likewise, the Maryland
1990); Acorn Structures, Inc. v. Swantz, 846 F.2d 923, 926 (4th Transit Authority replied that "[r]ights in technical data are
Cir. 1988)). covered by our standard Special Conditions language[] in-
281
Id. cluded in contract solicitation packages."
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25
ture. They can be found in FTA Circular 4220.1f and 2. Contractual Issues Regarding the Sharing of Real-
the FTA Master Grant Agreement." The referenced Time Data
Federal Transit Administration (FTA) Circular, Third
Transit agencies were asked to identify any contrac-
Party Contracting Guidance, "provides contracting
tual issues that the agencies had considered to maxi-
guidance for the recipient of financial assistance
mize revenue from real-time data or to restrict the fur-
awarded by the [FTA] when using those funds to fi-
ther dissemination of the data.
nance their procurements (third-party contracts)."284 The
One agency said that it had a contract to provide a
Circular includes provisions regarding FTA's rights in
live feed to Google Transit.290 Another agency stated
data. For example, "when FTA provides Federal assis-
that it had an information-sharing agreement with its
tance to support the costs of a research, development,
transit partners, which it identified as FTA subrecipi-
demonstration, or a special studies project, FTA gener-
ents. The Maryland Transit Administration responded
ally seeks sufficient rights in the data developed so that
that "[t]his has only come up in relation to static sched-
the resulting data can be made available to any FTA
ule data, not real-time data. We recently executed a no-
recipient, subrecipient, third-party contractor, or third-
cost licensing agreement with Google Transit for sched-
party subcontractor."285 (One transit agency (AC Tran-
ule data and itinerary planning."
sit) stated that funds from a federal grant paid for the
BART's response was that
initial cost of its AVL system.) Although the Circular
seems relevant to a development project involving the [S]ince BART has been sharing data with others for so
long...it always seemed antithetical to begin charging for
collection of real-time data, it does not seem particu-
it. Our license agreement is very straightforward
larly relevant to the collection of real-time data after a (http://bart.gov/dev/schedules/license.htm).
system is implemented.
We've closely watched other transit agencies attempt to
Another agency cited the New York Public Authori-
monetize schedule and real-time data for years. Like
ties Law 1265-A that governs acquisitions that do not
every other public agency, we're always interested in de-
involve the acquisition of real property. The statute veloping viable revenue streams.
applies, inter alia, to "all purchase contracts for sup-
plies, materials or equipment involving an estimated But we've never seen a transit data revenue model that
expenditure in excess of fifteen thousand dollars and all can scale well, generate enough revenue to offset admini-
stration and legal costs, and not stir up a negative public
contracts for public work involving an estimated expen-
286 backlash against the agency (an often overlooked factor in
diture in excess of twenty-five thousand dollars." The
the cost-benefit analysis). At some point, agencies must
law provides that contracts "shall be awarded by the weigh the benefits of serving customers, and the public's
authority to the lowest responsible bidder after obtain- expectation of transparency, against the hopes for a big
ing sealed bids in the manner hereinafter set forth."287 revenue stream that has yet to materialize.
As the law provides, contracts may be let without com-
Twenty-seven agencies responded that they were
petitive bidding in the event of an emergency, as de-
unable to identify any contractual issues.
fined in the statute,288 or when "the authority wishes to
experiment with or test a product or technology or new 3. Transit Agencies' Other Actions for Protecting Real-
source for such product or technology or evaluate the
Time Data
service or reliability of such product or technology...."289
The referenced statute does not appear to be relevant to Transit agencies were asked to identify other steps
legal arrangements for the use and control of real-time they take to protect their rights to the information they
data. collect. Of the 34 agencies responding that they are col-
Finally, the Washington Metropolitan Area Transit lecting real-time data, 24 did not identify any steps or
Authority (WMATA) advised that it "is not subject to actions that they are taking to protect their data. Some
any local acquisition laws and regulations on this mat- agencies responded that they would rely on their pro-
ter." curement laws; that they would stipulate in any agree-
ment for sharing real-time data that the agency re-
tained ownership of the data; that they would use data-
284
U.S. Dep't of Transp., Fed. Transit Admin., FTA Circular encryption and limit access to data only to authorized
4220.1f, Third Party Contracting Guidance (Nov. 1, 2008, rev. personnel; or that they would make information avail-
Apr. 14, 2009), available at http://www.fta.dot.gov/laws/ circu- able only through the agency's Web site.
lars/leg_reg_8641.html, last accessed on Jan. 3, 2010. The re- The Long Island Rail Road's (LIRR) response was
vised Circular "incorporates the new procurement provisions of that
the Safe, Accountable, Flexible, Efficient Transportation Eq-
uity Act: A Legacy for Users (SAFETEALU), and includes the [I]nformation extracted from our operational systems,
most current available guidance for the Federal public trans- such as TIMACS, is stored in the LIRR Data Warehouse
portation program as of the date of publication." Id. (DW). DW is a collection of non-volatile subject oriented,
285 time-variant, integrated data, stored and maintained for
Id. ¶ 2(i)(2).
286
N.Y. PUB. AUTH. L. § 1265-a(2)(a) (2009). 290
287
A copy of license agreements being used by transit
Id. agencies may be obtained at Google Transit Data Feed,
288
Id. § 1265-a(4)(a) (2009). http://code.google.com/p/googletransitdatafeed/wiki/PublicFeeds,
289
Id. § 1265-a(4)(a) (2009). last accessed June 30, 2010.
