IDEA SUBMISSION CASES: ALTERNATIVE THEORIES

FOR THE PROTECTION OF IDEAS

Jessie F. Beeber

Frankfurt Kurnit Klein & Selz, P.C.

488 Madison Avenue, 9^th Floor

New York, New York 10022

(212) 826-5561

jbeeber@fkks.com

I. What do we mean by idea submission cases?

A. General Scenario: The Pitch Meeting: “Ideas” in the entertainment world are bought and sold, often before there is any tangible expression of the ideas.

B. To “sell” ideas, oral pitches or treatments are used, often consisting of bare bones summaries of story content. Many are so general that they probably aren’t protectable under copyright law.

C. To sell your story, you have to tell your story. To tell it, however, is to risk losing it. Few will “buy” or promise anything until they have heard the idea and once they hear it (without having obtained such a promise) you may have “lost the result of [your] labor, definitely and irrevocably.” Desny v. Wilder, 46 Cal. 2d 715, 754 (Sup. Ct. Cal. 1956) (dissent).

D. To account for this reality of exchange of ideas for money, various theories have been used to imply and enforce a promise to pay for an idea on a contract or other theory.

II. Why aren’t these copyright infringement cases?

A. Rationale for Copyright Protection: owner’s monopoly vs. encouragement of other artists. The copyright law allows the owner of a copyright in a work to exert a monopoly over that work (for a limited period of time). This necessarily takes that work out of circulation for others to use and build upon without the owner’s permission (and payment). But another goal of copyright law is the encouragement of the arts and sciences, including using and building on the ideas of others.

B. Idea/Expression Dichotomy:

1. One way that the copyright law balances these two goals is that it does not protect an idea, only the expression of that idea (in a tangible medium). Section 102 of the Copyright Act.

2. Limited number of “original” ideas: Many scholars argue that there are a limited number of story ideas from which all plots flow, so “borrowing” and reference to earlier works is inevitable.

3. Judge Learned Hand expressed the idea/expression dichotomy as an “abstraction test”: “Upon any work . . . a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out. The last may be no more than the most general statement of what the (work) is about, and at times might consist only of its title; but there is a point in this series of abstractions where they are no longer protected, since otherwise the playwright could prevent the use of his ‘ideas,’ to which, apart from their expression, his property is never extended.” Nichols v. Universal Pictures Corp., 45 F.2d 119, 121 (2d Cir. 1930).

4. Public domain: It is important for the future development of creative works that the public domain be protected – there is a certain well of material that all of us are free to draw upon without limitation.

C. Ideas are “as free as the air.” Desny v. Wilder, 46 Cal. 2d 715, 731 (1956).

D. BUT: In the entertainment business, ideas are commodities. There is a voracious appetite for new ideas, and they are routinely bought and sold. Courts can be uncomfortable with allowing someone to commercially exploit someone else’s “idea” without compensation.

“There can be circumstances when neither air nor ideas may be acquired without cost. The diver who goes deep in the sea, even as the pilot who ascends high in the troposphere, knows full well that for life itself, he . . . must arrange for air . . . [t]he theatrical producer likewise may be dependent for his business life on the procurement of ideas from other persons as well as the dressing up and portrayal of his self-conceptions; he may not find his own sufficient for survival.” Desny, 46 Cal. 2d at 731.

E. Middle Ground: various theories have sprung up to strike a middle ground between comprehensive protection of copyright and a complete denial of legal protection for ideas. These include theories based on breach of contract and misappropriation of property.

III. Express Contract: This is a scenario where the person to whom idea has been submitted has expressly promised to pay if it is used.

A. Buchwald v. Paramount Pictures, Corp., No. C 706083, 1990 Cal. App. LEXIS 634, 13 U.S.P.Q.2d (BNA) 1497 (Sup. Ct. Cal. Jan. 31, 1990).

B. Facts:

1. Art Buchwald writes an 8-page screen treatment in 1982, titled It's A Crude, Crude World. Buchwald’s treatment, inspired by a state visit of the Shah of Iran, is a political satire about the adventures of a foreign dignitary in the U.S.

2. Buchwald’s friend Alain Bernheim suggests that the principal character be African-American. Bernheim meets with Jeffrey Katzenberg, then head of Paramount Pictures, to “pitch” the story as a vehicle for Eddie Murphy.

3. In early 1983, Katzenberg has Paramount secure an option to make movie “based upon” what is now called King for a Day. The option is renewed 3 times while the screenplay is being written.

4. After Katzenberg has left for Disney, in 1985 Paramount gives up the option, and Buchwald and Bernheim sell the story to Warner Bros.

5. Warner Bros. cancels the project in early 1988 when it learns Paramount is shooting a movie called Coming to America starring Eddie Murphy. Murphy receives a story credit for the movie.

C. Holding: Option agreement between Buchwald and Paramount is 100% enforceable.

1. Court identifies the case as “primarily a breach of contract case between Buchwald and Paramount (not Murphy) which must be decided by reference to the agreement between the parties and the rules of contract construction as well as the principals of law enunciated in the applicable legal authorities.” Buchwald, 1990 Cal. App. LEXIS 634, at *18.

2. The Agreement provides that Buchwald is entitled to payment only if Paramount produces a movie “based upon” Buchwald’s work.

3. Even though this is not a copyright case, the Court looks to copyright law to determine whether Coming to America was “based upon” Buchwald’s treatment.

4. The Court finds access and quantitative and qualitative similarity. Id. at *31-2.

5. Given the overwhelming evidence of access, the language of the contract and the law that liability in a contract case can arise even if a non-substantial element is copied, the Court holds that the similarities are sufficient to impose contract liability on Paramount.

D. Defenses to Express Contract Claims

1. Lack of Consideration: Some have argued that because an idea is not protectable, the giving of the idea is not consideration and therefore the contract for payment in exchange for an idea fails. But some courts have held that the disclosure of the idea itself can be sufficient consideration for the promise to pay. See, e.g., High v. Trade Union Currier Publ. Corp., 69 N.Y.S. 2d 526 (Sup. Ct. N.Y. Co. 1946), aff’d, 89 N.Y.S.2d 527 (1st Dep’t 1949); Desny, 46 Cal.2d at 729 (“[T]he act of disclosing an unprotectable idea, if that act is in fact the bargained-for exchange for a promise, may be consideration for the promise.”)

2. Statute of Frauds:

a. Applies to oral agreements only.

b. Contracts that cannot be performed within a year violate the statute of frauds and are unenforceable. See, e.g., N.Y. Gen. Oblig. Law § 5-701(a)(1) (McKinney 2001). This defense can apply if the understanding between the parties is oral and by its terms cannot be completed within a year.

3. Vagueness: Contracts must be certain as to their essential terms.

a. Baer v. Chase, 392 F.3d 609 (3d Cir. 2004).

b. Plaintiff sought compensation for his role in the creation and development of the successful TV series The Sopranos.

c. Among other things, the plaintiff introduced defendant David Chase, credited as the creator of the series, to Tony Spirito. Mr. Spirito shared stories of being in the New Jersey mafia with Chase, including power struggles with “Big Pussy” Russo. These characters were allegedly included in the series as Tony Soprano and Big Pussy Bonpensiero.

d. For purposes of summary judgment, Chase admitted to having an oral contract with the plaintiff.

e. The terms of their contingent oral agreement were that Baer “would perform the services while assuming the risk that if the show failed Chase would owe me nothing. If, however, the show succeeded he would remunerate me in a manner commensurate to the true value of my services.”

f. Lower court finds the express agreement too vague to be enforced, because it is not fixed in terms of duration or price. Note: Appellate court also finds that even if the agreement is implied-in-fact rather than express, it still must be sufficiently definite. This one is too vague.

IV. Implied-in-Fact Contract: This applies to a situation where, while there is no express agreement between the parties, the mutual assent of the parties to buy and sell the idea is nonetheless clear – it is expressed through deeds, not words.

A. Basically, the Court looks at the surrounding circumstances to determine whether there was a promise to pay.

B. This is similar to enforcing an agreement to pay a lawyer or a doctor who applies specialized knowledge to a state of facts and gives advice (ideas), where both parties expect that the lawyer/doctor will be paid for her services. See Desny, 46 Cal.2d at 733.

C. Still need to meet basic contract requirements:

1. Mutual Assent: need to show that both parties agreed that the plaintiff would be paid if the idea was used, by their deeds if not their words.

2. Consideration: compensation is awarded not for the idea itself, but for the services of conveying that idea.

3. Breach: need to show that the idea was used by the defendant.

D. Scenarios:

1. No Submission of the Idea:

a. If the plaintiff never directly submits the idea to the defendant, but the defendant uses the idea after obtaining it from some other source, there can be no implied contract, because the plaintiff never consented to the use. See, e.g., Giangrasso v. CBS, Inc., 534 F. Supp. 472 (E.D.N.Y. 1982).

2. Unsolicited Submission Involuntarily Received:

a. Defendant’s conduct prior to submission does not imply a contract because the defendant had no advance warning of an impending submission.

b. Defendant’s conduct after submission does not imply a contract if all the defendant does is use the idea, without some acts signifying a promise to pay. Remember: the idea is not protected by copyright.

c. “The idea man who blurts out his idea without having first made his bargain has no one but himself to blame for the loss of his bargaining power.” Desny, 46 Cal.2d at 739.

d. BUT: If, after the idea is blurted out, the defendant asks again for the idea (e.g., a second copy of the plaintiff’s manuscript), there may be an implied contract. See Landsberg v. Scrabble Crossword Game Players, Inc., 736 F.2d 485, 490 (9th Cir. 1984).

3. Unsolicited Submission Voluntarily Received:

a. “Voluntary” can mean that the defendant has advance warning of the submission and does not stop it from being made.

b. Plus, if the defendant knows that the plaintiff is submitting the idea with the expectation that if it is used, the plaintiff will be paid, an implied contract is formed.

c. Desny v. Wilder, 46 Cal. 2d 715, 731 (1956).

(1) Plaintiff reads his 3-page synopsis about a man trapped in an underground cave to Billy Wilder’s secretary over the phone. Plaintiff allegedly tells the secretary that defendants can only use the story if they pay him, and the secretary allegedly agrees.

(2) Wilder and Paramount then come out with the movie Ace in the Hole, also about a man trapped in an underground cave.

(3) Appellate court reverses summary judgment for defendants and remands for further consideration of plaintiff’s implied-in-fact contract claim

(4) 2 prong test for enforceable implied-in-fact contract:

(a) plaintiff clearly conditions disclosure of the idea on defendant’s promise to pay; and

(b) defendant voluntarily accepts the disclosure understanding the condition and uses the idea

(5) Promise can be made before or just after disclosure.

d. Whitfield v. Lear, 751 F.2d 90 (2d Cir. 1984).

(1) Applying CA law.

(2) Plaintiff first sends a mailgram to defendants advising them that he is sending them a submission.

(3) Plaintiff then sends Norman Lear the script for his proposed television series Boomerang, about a multiracial, crime-fighting rock band.

(4) Plaintiff alleges that ideas from his script were used for Lear’s ongoing TV project, The Righteous Apples, a sitcom involving a multiracial rock band.

(5) Court declines to dismiss plaintiff’s claim on summary judgment, holding that a contract can be implied based on the communications between the parties and industry custom – producers don’t have to be told about the conditional promise to pay, they already know that it exists.

(6) Effect of Whitfield: Most studios refuse to accept any unsolicited ideas unless the author signs a release giving up all rights to the material.

e. Grosso v. Miramax Film Corp., 383 F.3d 965 (C.D. Cal. 2004).

(1) Plaintiff claims Miramax stole ideas and themes of his screenplay, The Shell Game, in making the movie Rounders (both are about poker players).

(2) Copyright claim dismissed: two works are not substantially similar.

(3) State law (CA) claim for breach of implied contract: dismissal on summary judgment reversed. Plaintiff adequately alleged a Desny claim.

4. Solicitation of Idea: If the defendant has requested that the plaintiff disclose his idea, most courts will find an implied promise to pay for the idea if the defendant uses it. See, e.g., Yadkoe v. Fields, 66 Cal. App.2d 150 (1944) (W.C. Fields wrote that if plaintiff would like to submit a couple of scripts “gratis,” the parties might be able to enter into an agreement – court permitted recovery by plaintiff on implied contract theory despite use of term “gratis.”)

V. Misappropriation: Protection for an idea based in property law, not contract. Basically, the idea itself is property and the plaintiff can sue for a misappropriation of that property.

A. California: This theory is specifically disallowed by statute. Cal. Civ. Code § 980 was amended in 1947 to eliminate property rights in abstract ideas.

B. New York: This is still a viable theory, but rarely used. See, e.g., Adsani v. Miller, 1996 WL 194326 (S.D.N.Y. Apr. 22, 1996); Oasis Music Inc. v. 900 U.S.A. Inc., 614 N.Y.S.2d 878 (1994).

1. Requirements:

a. The idea must be “novel” and “concrete.”

b. There must be a certain “legal relationship” between the parties, usually fiduciary relationship or implied-in-law duty (unjust enrichment).

2. Defenses:

a. There will be preemption by the copyright law, if the idea is too concrete (see point VII below).

b. Independent Creation: if the defendant can show that the idea was created by the defendant independently without reference to that of the plaintiff, no claim will lie.

c. The idea is not “new” or “novel.” See Point VI below.

VI. New or Novel: Does the idea have to be “new” or “novel” for a claim to lie?

A. Express Contract: no: Parties are free to agree that one will pay the other for the most banal of ideas. See Stanley v. Columbia Broad. Sys. Inc., 35 Cal. 2d 653, 674-5 (1950); Apfel v. Prudential-Bache Sec., Inc., 81 N.Y.2d 470, 473 (1993).

B. Misappropriation: yes.

C. Implied-in-Fact Contract: depends.

1. Not in California

a. Blaustein v. Burton, 9 Cal. App. 3d 161 (2d App. Dist. 1970).

(1) Blaustein’s idea is to make a movie of The Taming of the Shrew starring Richard Burton and Elizabeth Taylor (who were married at the time), with Franco Zeffirelli as the director, with certain variations in the original Shakespeare story.

(2) Blaustein discloses the idea to the defendants and has a number of discussions with the Burtons and Zeffirelli.

(3) Blaustein is cut out of the project and the movie gets made by Columbia.

(4) Blaustein admits his ideas are not “novel,” indeed, there had had been a 1930s Taming of the Shrew starring Douglas Fairbanks and Mary Pickford (who were also married at the time) that employed some of the same variations to the original Shakespeare play.

(5) But there was a viable claim for breach of implied-in-fact contract nonetheless. “The fact that the producer may later determine, with little thinking, that he could have had the same ideas and could thereby have saved considerable money for himself, is no defense against the claim of the writer.” Blaustein, 9 Cal. App.3d at 183.

b. See also Chandler v. Roach, 156 Cal. App. 2d 435 (1957) (TV show about a public defender’s office) (“We see no necessity to add the elements of novelty and concreteness to implied-in-fact contracts with reference to authors. Their status should be . . . the same as that of any other person in any other implied-in-fact contract situation . . . .”).

2. New York??

a. Historically, an idea had to be novel in order to merit protection. See, e.g., Hudson Hotels Corp. v. Choice Hotels Intl., 995 F.2d 1173 (2d Cir. 1993) (non-novel idea cannot be a protected trade secret).

b. Since New York recognizes ideas as property, the conveyance of the idea itself, rather than the service of providing the idea, could be consideration for an implied-in-fact contract. But, if idea is not novel, no property has been conveyed, so no consideration has been exchanged and the contract will fail.

c. See also Murray v. National Broad. Corp., 844 F.2d 988 (2d Cir. 1988).

(1) Plaintiff, an NBC employee, has an idea for a television series called Father’s Day about an upper middle class black family.

(2) 4 years later The Cosby Show debuts on NBC.

(3) Court finds that the idea of portrayal of non-stereotypical black family is not novel, therefore there is no implied-in-fact contract.

(4) Instead, a concept needs to be “truly innovative, not merely a clever or useful adaptation of existing knowledge” to get “special protection” as an idea subject to an implied-in-fact contract.

(5) Has to be “genuine novelty and invention.”

d. But see Nadel v. Play-By-Play Toys & Novelties, Inc., 208 F.3d 368 (2d Cir. 2000).

(1) Toy inventor shows his prototype of a spinning plush toy to a manufacturer. The next year, the manufacturer introduces a similar toy.

(2) Second Circuit rejects the Murray position “that ideas that are not novel are in the public domain” and thus “cannot be stolen.”

(3) Instead, a “showing of novelty to the buyer will supply sufficient consideration to support a contract.”

(4) Reason is that this saves the “unaware” buyer all of the effort and resources needed to discover the idea itself.

3. Should there be a novelty requirement?

a. Yes: the law should not allow a writer, without a written contract, to hold a monopoly over a common, frequently used idea.

b. No: the Desny test is sufficient, only those who can prove a contract existed will recover.

VII. Preemption

A. Section 301 of the Copyright Act states: “On and after January 1, 1978, all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by sections 102 and 103 . . . are governed exclusively by this title.”

B. Are theft of idea claims preempted?

C. Two prong test for preemption:

1. Does the subject matter of the claim come within the subject matter of the Copyright Act?

2. Are the rights protected by the state law claim the equivalent to any of the exclusive rights protected by the Copyright Act (the “extra element” test)?

D. Selby v. New Line Cinema Corp., 96 F. Supp. 2d 1053 (C.D. Cal. 2000) held that implied-in-fact contract claims were preempted because a contractual promise is not always an extra element. What if the defendant promised “I will not infringe any copyright . . . in the script that you are proposing to show me.”?

E. But see Grosso v. Miramax Film Corp., 383 F.3d 965 (9th Cir. 2004).

1. Desny implied-in-fact contract claim based on plaintiff’s submission for screenplay The Shell Game that he alleges was made into Rounders.

2. First Prong: The subject matter of the claim does not come within the subject matter of the Copyright Act, because copyright specifically does not protect ideas.

3. Second Prong: Court holds that the plaintiff sufficiently alleged the “extra element” – the implied promise to pay, therefore there is no preemption of the plaintiff’s claim. (“The contract claim turns not upon the existence of a copyright . . . but upon the implied promise to pay the reasonable value of the material disclosed.”)