If you have a great idea for a movie or product and want to pitch it to someone, how can you keep the idea from being stolen? Alternatively, if someone comes to you unsolicited with an idea, do you have to pay them for using it? Many people think you can copyright an idea and thus protect it from theft. Posing the questions, are ideas protected by copyright law? However, while the expression of ideas is protected under copyright law, the ideas themselves generally are not copyrightable. Then how can there be so many lawsuits related to idea theft, particularly in the entertainment and technology industries? Most of those claims are actually based on contract law, rather than intellectual property law.
Section 102(b) of the Copyright Act says that an idea, say for a television series, is not protected by copyright law, but the television series script could be copyrightable.
Section 301 of the Copyright Act further establishes that copyright law is federal law. As a result, a plaintiff cannot bring a copyright claim under common law or state law.
While a copyright claim may be barred by Section 102(b), some states allow idea theft lawsuits based on contract law. Essentially, if you share your idea with someone in exchange for an agreement that you will be paid if that person uses your idea, the idea will be protected under contract law principles. The agreement does not have to be writing; it can be verbal. It also does not have to be an express contract; it can be implied from the circumstances and the behavior of each party which leads the other party to reasonably believe that a contract has been formed. These are known as implied-in-fact contracts.
Some courts have held that implied-in-fact contract claims are not precluded by Section 301 because the plaintiff must establish that there was an implied contract with an implied condition of payment for the idea. For example, in California, in order for a claim for idea theft not to be precluded under copyright law, the implied-in-fact contract requires proof of:
(1) submission of the idea on an obligation to pay for use of the idea;
(2) voluntary acceptance of the submission based on knowledge of the obligation to pay for the use of the idea;
(3) use of the idea; and
Notably, the person submitting the idea must indicate they expect payment and the recipient must voluntarily accept this condition before any disclosure of the idea is made. As the court in the landmark California case of Desny v. Wilder stated, “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.”
While New York agrees with California that idea theft based on implied-in-fact contracts are not precluded by copyright law, the state has an additional requirement that differs from California. Idea theft in New York requires proof that an idea is novel to the buyer. This is a fact-specific analysis that focuses on the perspective of the particular buyer.
Minimizing idea theft claims
To reduce the risk of claims for idea theft, clear guidelines and processes regarding submission and acceptance of ideas are essential. Companies should have a written submissions process that states that there is no promise of payment and the company may have similar ideas in progress. In addition, all communications should be carefully managed and documented. Individuals with ideas they wish to pitch should use the recipient’s designated channels and may want to employ an agent or representative to assist in getting an appropriate agreement before any disclosures are made.
Idea theft is a complicated area of law. Experienced counsel can assist in establishing appropriate procedures and advising both sides on how to protect their interests.
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