Theft of Idea Claim Goes Forward

November 30, 2012


Neil J. Rosini

But an "industry standard price" still has to be proved by the plaintiffs to win.

The federal appellate court sitting in New York has decided that a lawsuit against USA Network for alleged theft of an idea in a written treatment for a television series, which seemingly was rejected, is not “preempted” (and not precluded) by the Copyright Act. The plaintiffs had pitched a program called “Housecall” about doctors making house calls to wealthy patients. USA’s series, “Royal Pains,” also based on the “concierge doctor” concept, appeared several years later. The lower court dismissed the claim because the Copyright Act does not protect ideas but does cover written treatments and does exclusively control disputes about works that fall within the subject matter of copyright. The Copyright Act thereby “preempted” and did not allow for a claim about stolen ideas, according to the lower court. The Second Circuit Court of Appeals, however, reinstated the claim (consistent with the law of several other federal appellate courts including the Ninth Circuit in California) on the basis that a claim for theft of an idea does not involve a right that is equivalent to an exclusive right under copyright: the plaintiffs had alleged the “extra element” of an implied-in-fact agreement by which the defendant impliedly promised to pay for use of the pitched idea even without agreement on a specific amount. The appellate court also noted that under New York law, the plaintiffs’ claim might not survive without a definite (albeit unspoken) price term known to both parties. But because the pitch for “Housecall” and other “significant contacts” were in California, the law of California would apply, and it allows “custom and usage” as well as other “extrinsic evidence” to fill in an open price term with an “industry standard price” on which the parties are considered to have implicitly agreed. The lesson of this decision sets a high bar: that a pitch made in either New York or California should best be accompanied by a price. It’s not often that compensation is discussed at a pitch meeting. Forest Park Pictures v. Universal Television Network, 683 F.3d 424 (2d Cir. 2012).