An Idea Doesn’t Have to be Novel to be Stolen (In California)
March 31 2022
In California, an idea theft claim is based in large part on the California Supreme Court case of Desny v. Wilder. In Desny, the plaintiff Victor Desny wrote a script depicting the real-life story of Floyd Collins, a boy who made headlines after he was trapped in a cave eighty feet underground. In an effort to market his script, Desny called Billy Wilder, a writer, producer and director at Paramount Pictures. Desny could not get through to Wilder and subsequently stripped his script to the bare facts so that Wilder’s secretary could copy it in short-hand over the phone. After reading his synopsis, Desny told Wilder’s secretary that Wilder and Paramount could use the script only if they paid him a reasonable amount for doing so. Shortly thereafter, Wilder created his own movie script mirroring Densy’s. Because Densy’s script was based on historical facts, and because Desny only conveyed the bare minimum of those facts to Wilder’s secretary, both parties conceded for the purpose of the appeal that the synopsis was not sufficiently original to form the basis of a federal copyright claim. The Court, however, held that Densy stated sufficient facts to establish the existence of an implied-in-fact contract between the parties. The California Supreme Court explained that where an idea is furnished by one party to another, a contract sometimes may be implied even in the absence of an express promise to pay; a contract exists where “the circumstances preceding and attending disclosure, together with the conduct of the offeree acting with knowledge of the circumstances, show a promise to pay.
There had been idea theft cases prior to Desny. One such case is Stanley v. Columbia Broadcasting System. In Stanley, the court stated that “the right of the originator of an idea to recover from one who uses or infringes it seems to depend upon whether or not the idea was novel and reduced to concrete form prior to its appropriation by the defendant, and, where the idea was disclosed by the originator to the appropriator, whether such disclosure took place under circumstances indicating that compensation was expected if the idea was used.” In addressing the requirement of “novelty”, the Stanley Court pointed out that novelty may lie in the combination of items that are not new or novel.
The idea of novelty was addressed in Desny. There the Court quoted Justice Traynor’s dissenting opinion in Stanley:
The policy that precludes protection of an abstract idea by copyright does not prevent its protection by contract. Even though an idea is not property subject to exclusive ownership, its disclosure may be of substantial benefit to the person to whom it is disclosed. That disclosure may therefore be consideration for a promise to pay . . . 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.
With regard to novelty as an element of an idea theft case, according to the California Supreme Court in Desny, an express agreement to pay for a non-novel idea is enforceable, but an implied agreement to pay for a non-novel idea is not, therefore, any idea that is the subject of an implied contract must be novel.
However, it is generally accepted that novelty is no longer an element in a California idea theft case. In looking at the 9th Circuit’s summation of the elements of an idea theft claim in Grosso v Miramax, the novelty element is nowhere to be found. According to Grosso, “To establish a Desny claim for breach of implied-in-fact contract, the plaintiff must show that the plaintiff prepared the work, disclosed the work to the offeree for sale, and did so under circumstances from which it could be concluded that the offeree voluntarily accepted the disclosure knowing the conditions on which it was tendered and the reasonable value of the work.” The Grosso court went on to say that “[t]he Desny rule is justified on the theory that the bargain is not for the idea itself, but for the services of conveying that idea.“
The demise of novelty as an element of idea theft cases has its roots in the 1957 case of Chandler v Roach. In that case the California Court of Appeals, taking issue with the requirement of novelty, said:
We believe that if a producer obligates himself to pay for the disclosure of an idea, whether it is for protectible or unprotectible material, in return for a disclosure thereof he should be compelled to hold to his promise. There is nothing unreasonable in the assumption that a producer would obligate himself to pay for the disclosure of an idea which he would otherwise be legally free to use, but which in fact, he would be unable to use but for the disclosure.
The producer and the writer should be free to make any contract they desire to make with reference to the buying of the ideas of the writer; the fact that the producer may later determine, with a 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. This is so even though the material to be purchased is abstract and unprotected material.
The Chandler Court went on to say:
The Legislature, in 1947, amended section 980 of the Civil Code, and thereby abrogated the rule of protectability of an idea, and as a consequence thereof about the only protection a writer now has in his work is by the implied-in-fact contract procedure. 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 identically the same as that of any other person in any other implied-in-fact contract situation. In other words, the courts should not engraft to the requirements, in the case of authors, something which neither party has contemplated and which is not a requirement in any other form of implied-in-fact contract; the courts should permit the parties to contract with each other as they see fit and should not arbitrarily inject into the contract the requirements that the idea be novel and concrete. If the parties have so agreed, that presents a different situation and becomes a question of fact for the jury to decide.
So, is novelty generally no longer an element in idea theft/idea submission cases? Like many things, the lack of novelty as an element in an idea theft case seems to be unique to California.
In New York, novelty is still an element of an idea theft case. Like California, under New York law an implied contract is derived from the presumed intention of the parties as indicated by their conduct. However, New York law is clear that a party is not allowed to recover for theft of an idea unless the idea is novel.
The United States District Court for the Southern District of New York recently addressed the issue of novelty as an element of an idea theft claim in Wexler v Hasbro. In that case, David Wexler, a toy inventor, sued Hasbro, claiming that the toy company used two of his ideas without paying him royalties. In a series of meetings organized by Hasbro, Wexler pitched Hasbro the idea of creating mash-ups of existing Hasbro games, including a mash-up game of Connect 4 and Nerf. Although Hasbro passed on each of Wexler’s mash-up ideas, including the Connect 4/Nerf concept, from 2019 to 2020 Hasbro sold a line of products under the name “game mash+ups” at Target. Additionally, during the same time Hasbro sold a game called “Connect 4 Blast” which involved shooting Nerf darts at a Connect 4 grid.
In ruling on Hasbro’s motion for summary judgment, the District Court found, as a matter of law, that Wexler’s general mash-up idea was not novel. According to New York precedent, a plaintiff may not claim that an idea is novel if it was already in use in the industry at the time of submission. The court noted that the use of existing means or the mixture of “known ingredients” in a different manner does not make an idea novel. The court did acknowledge that the prototypes, artwork, proposed packaging and game instructions pitched by Wexler were novel, however, the Court pointed out that Hasbro did not develop any of the examples submitted by Wexler.
As for the Connect 4/Nerf game, the Court found that Hasbro did not use Wexler’s idea in that it was independently developed by Hasbro. The Court found compelling the evidence submitted by Hasbro that Connect 4 Blast! was developed internally by Hasbro without use of or access to Wexler’s idea.
Given the difference between New York and California law, it may make a difference to potential plaintiffs and defendants where projects are pitched. It would be better for a Studio to schedule pitch meetings for projects based on generic ideas in its New York office, while writers and producers should insist on Los Angeles.
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