A recent suit filed by Gary Friedrich, the creator of the comic book character Ghost Rider, alter ego of Johnny Blaze raises a number of issues, one of them whether there exists a cause of action for "waste" of a copyright. Friedrich recently filed suit in Illinois against Marvel, Sony Pictures Entertainment and a few other entities over Sony's movie "Ghost Rider." There are copyright claims based on reversion rights, which I don't understand from the news reports. The waste claim is, I think, based on the heavy marketing of the film through merchandizing and other ancillary products.
The only proponent I know of for waste as a possible cause of action for authorized use of a copyrighted work is the later Professor Mel Nimmer. I have never understood the argument. Co-owners of copyright do not owe each other a duty not to “waste” the copyright. “Waste” is a real property concept inapplicable to copyright. Unlike land, where one can see and test the property's continued utility, one cannot distinguish between a copyright co-owner's efforts to vigorously exploit the work and “over exploiting” which theoretically might lead to depletion of a copyright's economic value.
This is no source of law for a duty not to waste a copyright. Federal law does not apply since the Copyright Act does not contain any such concept, nor, post-Erie, is there any relevant federal common law. This leaves state law. However, a state law (statutory or common law) prohibiting a copyright owner from exercising its federally granted rights runs afoul of field preemption. Moreover, as a practical matter, how would a finder of fact determine where the line is between normal aggressive marketing and abnormal depletion of an asset's value?