There’s a Way to Protect Your Great Ideas From Theft

By Tamara L. Manask Have you ever had a great idea for a reality show? Have you ever thought about pitching that idea, but were afraid that it would get stolen? Have you ever had an idea about a creation of some sort but did not tell anyone because you were afraid someone was going to steal your idea and become a millionaire? The breadth of idea protection includes all forms of idea submission from product design to a business model or a literary work. Yet, idea theft is a common fear among many creative people since neither trademark nor copyright law protects ideas. The examples above simply illustrate the inherent difficulties in protecting unique and often lucrative creative ideas. It is axiomatic or at least should be that if you create the product, you should receive some sort of compensation for your idea if it is used for profit. Unfortunately, the general public is often misinformed about how to protect creative ideas. Many assume that a creation is only protected once it is registered as a trademark, patent or copyright. Others believe that to protect your idea from ‘free riders,’ the idea can only be disclosed pursuant to a nondisclosure or confidentiality agreement. While registration of an idea through traditional intellectual property methods is often necessary, there are times when an idea may not meet the requisite elements to support a patent or the “substantial similarity” necessary to prevail on a copyright infringement claim. This is where an implied-in-fact contract claim becomes essential. What then is an implied-in-fact contract? Simply put, an implied-in-fact contract is established once you prove the following: – You created the idea; – You disclosed the idea for sale; – Under all circumstances attending disclosure, it can be concluded that the recipient voluntarily accepted the disclosures knowing the conditions on which it was tendered (voluntary acceptance of the idea); – The idea has reasonable value; and – The recipient made unauthorized use of the idea. The seminal case in California for implied contracts is Desny v. Wilder 46 Cal.2d 715; 299 P.2d 257 (Cal. 1956). Desny was a writer who submitted a brief synopsis of a proposed movie based upon the life and death of Floyd Collins to a producer, Wilder. Desny read the synopsis to Wilder’s secretary over the telephone so that she could take it down in shorthand. Desny, on his part, told the secretary that defendants could use the story only if they paid him. Sometime later, Wilder created his own movie script, unquestionably similar to Desny’s synopsis. As a result, Desny brought a lawsuit against Wilder. In a nutshell, Desny claimed that he created a story, albeit based on historical facts, which was subsequently used by the person he disclosed it to without any compensation to Desny. The court held that Desny had enough facts to establish an implied-in-fact contract. Desny’s case also illustrates the benefits of the implied-in-fact contracts when copyright protection fails. Would Desny be successful in a copyright suit? No. Copyright law requires a degree of originality to an extent not required under the Desny rule. The Court in Desny held that “even though the idea disclosed may be ‘widely known and generally understood,’ it may be protected by an express contract providing that it will be paid for regardless of its lack of novelty.” Additionally, Desny’s script was similar to Wilder’s but not to the more arduous level of “substantial similarity” required under copyrights. Nonetheless, there is a level of interplay between copyright and implied-in-fact contracts. In fact, Desny was called into question after the 1976 Copyright Act passed. The Copyright Act essentially stated that all legal rights that were equivalent to any of the exclusive rights within the scope of copyright were pre-empted by the federal copyright law. As a result, the utility of an implied in fact contract was significantly undermined when numerous courts across the country held that certain claims, such as implied-in-fact contracts, must be brought under copyright law. It was not until the recent and much debated Grosso case that the Ninth Circuit, which includes California, finally determined the pre-emption point. Grosso brought suit against defendants, Miramax Film Corp. for alleged breach of implied contract and violation of his copyright in his screenplay “The Shell Game.” Grosso claims that Miramax stole the ideas and themes of his work when they made the movie “Rounders.” In the Grosso decision, the Ninth Circuit held that Grosso could not sustain a copyright claim. The two works at issue were not substantially similar because they did not have substantially similar genre, mood, and pace. However, on the issue of implied-in-fact contract, the court held that this claim was not preempted by copyright because Grosso’s claim sought “compensation not for the actual written script, but for the idea allegedly embodied in the script and shared with Miramax.” Since Grosso, there has been a rise in the number of idea submission cases brought in California. In many respects, copyright cases are still preferable because of the greater potential for damages and attorney’s fees but conversely the standards for a copyright claim are much higher. As a result, implied-in-fact contracts are a very useful tool in a creator’s arsenal. Tamara L. Manask is an attorney at the law firm of Greenberg & Bass, who specializes in intellectual property and entertainment disputes.