Are DMCA Claims Arbitrable?

Common law judges expressed a negative view toward arbitration, apparently based on a belief that such alternative dispute resolution ousted the court’s jurisdiction. In the United States, the legal landscape fundamentally changed with the passage in 1925 of the Federal Arbitration Act. The purpose of the FAA “was to reverse the longstanding judicial hostility to arbitration agreements that had existed at English common law and had been adopted by American courts, and to place arbitration agreements upon the same footing as other contracts.”

The Copyright Act has no provision regarding arbitrable of claims that arise under title 17. Based on the grant of original and exclusive jurisdiction to district courts, litigants in the past argued that no copyright dispute can be arbitrated. The issue was settled long ago, most prominently in Judge Posner's opinion in Saturday Evening Post Co. v. Rumbleseat Press Inc., 816 F.2d 1191 (7th Cir. 1987). Motions to compel arbitration for a wide variety of claims arising under the Copyright Act are now routinely granted, so long as the dispute is encompassed by the agreement to arbitrate, so it is surprising to hear the "copyrght claims can't be arbitrated" argument raised.

In Packeteer Inc. v. Valencia Systems, Inc., 2007 WL 707501 (N.D. Cal. March 6, 2007), Judge Whyte rejected the argument that DMCA claims (as well as traditional copyright infringement claims) are not arbitrable regardless of the language of the arbitration provision:

Valencia contends that the issue is simply whether the agreement to arbitrate encompasses the copyright and DMCA claims in dispute. Valencia, naturally, asserts that the arbitration clause requires these claims to be arbitrated. Packeteer, on the other hand, argues that the arbitration clause only requires arbitration of breach of contract and other claims related directly to the SLADA.

The relevant language in the arbitration clause, “any dispute concerning this Agreement or the Parties' respective obligations hereunder,” creates a broad scope of arbitration and encompasses all claims which arise from the parties' obligations under the SLADA. The copyright and DMCA claims at issue are based upon Packeteer's alleged creation and distribution to its customers of a patch based on having reverse-engineered a portion of Valencia's object-code, which was distributed to Packeteer under the terms of the SLADA.