Monday, February 26, 2007

Contracts Involving Uncopyrightable Ideas

Copyright does not protect "ideas". It also doesn't protect facts. But if parties agree by contract that one is going to pay another for an idea, that contract may be enforceable. In my mind, prior to doing any research, the lead case on contracts involving ideas is Buchwald v. Paramount Pictures, 1990 WL 357611 (Cal. Superior), 13 U.S.P.Q.2d 1497, 17 Media L. Rep 1257 (Cal. Super. L.A. Co. 1990)(not reported in Cal. Rptr.). When I say "in my mind" - the story of columnist Art Buchwald submitting a 2.5 page treatment to Paramount Pictures, Paramount agreeing to pay him for the idea, and then reneging by making a film called "Coming to America" starring Eddie Murphy based on that idea without paying Buchwald is so memorable.

But when I conducted an "ALLFEDS" search on Westlaw, I found only one case citing the Buchwald case. Beal v. Paramount Pictures Corp., 20 F.3d 454 (11th Cir. 1994). I didn't check the state database. But there were 68 secondary sources citing Buchwald. So it's a case in which the peanut gallery of legal commentators have great interest, but in which the courts have no interest. Over the last month I read Fatal Subtraction: How Hollywood Really Does Business (The Inside Story of Buchwald v. Paramount) by Pierce O'Donnell and Dennis McDougal (Doubleday 1992). It's a pretty good story for a lawyer to read in terms of case strategy, not giving up, and taking risks on some long shot legal theories where a client has really been wronged. O'Donnell had Buchwald's contract involving the story idea upheld and enforced, then turned around and invalidated its "industry standard" net profits provisions as unconscionable (there is a Buchwald II decision).

Arthur Miller, in Common Law Protection for Products of the Mind: An "Idea" Whose Time Has Come, 119 Harv. L. Rev. 703 (January 2006) argues that courts generally require "concreteness" and "novelty" to enforce agreements involving ideas. He provides a good survey of the case law in the area and argues for more federal protection. He claims a gestation period for the article of 56 years - since he was a 2L.

In Cavagnuolo v. Rudin, 1996 WL 79861 (S.D.N.Y.) the court observed that California has no novelty requirement for contracts involving ideas (citing Desny v. Wilder, 299 P.2d 257 (Cal. 1956) nor does New York (citing Apfel v. Prudential-Bach Securities Inc., 81 N.Y.2d 470 (1993).

Where owners of a database used a "shrink-wrap" license to bar licensees from using the database for commercial mailings, the provision was upheld. ProCD Incorporated v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996). Michigan law doesn't require novelty in contract to submit ideas. Wrench LLC v. Taco Bell, 256 F.3d 446 (6th Cir. 2001). In a case criticized by Miller, at least one court let a contract block reverse-engineering because it was forbidden by the license agreement. Bowers v. Baystate Technologies, Inc., 320 F.3d 1317 (Fed. Cir. 2003)(permitting a party to "contract away" a fair use defense of reverse engineering).

California law will create an implied in fact contract in idea submission cases. Levin v. The Gap, 1998 WL 915897 (S.D.N.Y.). But California will require evidence of industry custom to pay for ideas before doing so. Dallier v. Levi Straus & Co., 86 F.3d 1149 (4th Cir. 1996)(unpublished). But for a court to let a plaintiff pursue an implied-in-fact contract, it should be set forth in the complaint. Willis v. Home Box Office, 57 Fed. Appx. 902 (2d Cir. 2003)(unpublished summary order).

Courts struggle with the problem of preemption: the extent to which Copyright law supplants state law in the area of protecting ideas. The law of trade secrets is a related area -protecting "ideas" unprotectable by copyright by keeping them secret or binding a select few through confidentiality agreements.

1 comment:

where to copyright said...

I also understand that US Copyright does not protect fonts, but German copyright (EU?) does!

How does one keep up?