The key litigated issues on appeal in Forest Park Pictures v. Universal Television Network, Inc. were:

In 2005, the plaintiffs, Forest Park Pictures, developed a concept for a television show called "Housecall." The premise of "Housecall" focused on a doctor who gets expelled from the medical community for treating patients who could not pay, moves to Malibu, California and becomes a concierge doctor to rich and famous patients. Forest Park wrote a series treatment for this idea with character biographies, themes and storylines and mailed the written material to Alex Sepiol of USA Network. After sending the series treatment, Forest Park and Sepiol met for the express purpose of Forest Park pitching their show. Sepiol and Forest Park communicated for about a week and then communication between the parties stopped.

Less than four years later, USA Network produced and aired "Royal Pains," a television show featuring a doctor who gets expelled from the medical community for treating patients who could not pay and becomes a concierge doctor to rich and famous patients in the Hamptons. Forest Park did not consent to the production of "Royal Pains" and USA Network did not compensate Forest Park for using their idea for the show.

Forest Park sued USA Network and Universal Television Network for breach of contract. The defendants moved to dismiss the complaint on the grounds that the Section 301 of the Copyright Act preempted the claim and that the contract was too vague to be enforced. The Copyright Act preempts state laws governing activities that are equivalent to any of the exclusive rights within the general scope of copyright.

The US District Court for the Southern District of New York held the claim preempted and dismissed Forest Park's complaint without addressing the vagueness issue.

The Second Circuit held that Section 301 of the Copyright Act does not preempt Forest Park's breach of contract claim. Section 301 specifies that a state claim is preempted if:

For the first prong, the court acknowledged that the scope of copyright for preemption purposes extends beyond the scope of available copyright protection. This means that a work may fall within the subject matter of copyright, and therefore be subject to preemption, even if the work contains uncopyrightable material, such as ideas. In this case, the work consisted of Forest Park's idea for "Housecall," as embodied in the series treatment and other written materials that Forest Park sent USA Network. Other circuit courts have held that ideas when fixed in writing as a treatment are within the subject matter of copyright. Since the complaint alleges that USA Network used the ideas embodied in the written works, the court found that the subject matter prong has been met.

For the second prong, the court applied the extra element test. Under the extra element test, there is no preemption if an extra element is required instead of or in addition to the acts of reproduction, performance, distribution or display, to constitute a state-created cause of action. The court compared Forest Park's alleged breach of contract with a copyright violation claim and noted the following differences:

Forest Park's complaint specifically alleges that the contract includes an implied promise to pay for using Forest Park's idea. This alleged contract distinctly requires USA Network to pay for using the ideas, which is an extra element that is different from a suit based on one of copyright's exclusive rights. Since the extra element test has been met, the court found that preemption does not apply.

The court also held that Forest Park had alleged an enforceable implied-in-fact contract including a promise to pay under California contract law. USA Network argued that the implied-in-fact agreement is not enforceable because it lacked a definite price term. However, in applying California law as the jurisdiction with the "center of gravity" of the contract, the court rejected this argument. It cited California courts that enforce contracts without exact price terms as long as the parties' intentions can be ascertained. The court found that the conduct between Forest Park and USA Network in submitting the series treatment, scheduling a meeting, pitching the content and communicating after the meeting sufficiently pleaded a claim under California contract law.

This case aligns the Second Circuit with the US Court of Appeals for the Ninth Circuit. In its 2010 decision in Montz v. Pilgrim Films & Television, Inc., the Ninth Circuit also held that an implied contract claim in the idea submission context was not preempted by the Copyright Act.

With breach of contract claims surviving preemption challenges in both the Ninth and Second Circuits, writers may find it easier to assert implied contract claims against producers, networks and studios for the use of their submissions.

Counsel for producers, networks and studios may therefore consider taking a strong stance in advising clients to obtain a release from any party submitting a proposal or concept for consideration. The release agreement can include an express acknowledgment that any submission or pitch meeting does not create an implied agreement between the parties and that the receiving party may receive a similar submission or pitch from others and will not be liable for the use of these ideas. To avoid an unenforceablity challenge, the release could include a waiver for breach of contract claims but not limit a party's right to pursue copyright infringement claims for protected expressions.

Counsel for parties submitting ideas or pitches should evaluate any proposed releases and, if possible, seek a formal agreement compensating the author for any use of submitted ideas.