Canada: "Idea Theft" Lawsuits Gain New Life In United States

Last Updated: July 12 2012
Article by Daniel G. C. Glover

Most Read Contributor in Canada, September 2018

Introduction

In a case with several important echoes to Canadian appellate law, the United States Court of Appeals for the Second Circuit has revived the actor's Hayden Christensen's "idea theft" lawsuit against the USA Network this week in the Forest Park Pictures v. Universal Television Network Inc. decision.

Background

In 2005, the plaintiffs developed a concept for a television show called "Housecall," in which a doctor, after being expelled from the medical community for treating patients who could not pay, moved to Malibu, California, and became a "concierge" doctor to the rich and famous. The plaintiffs created a written series treatment for the idea, including character biographies, themes, and storylines, and submitted this material to an employee of the USA Network. The parties then met and discussed the possibility of turning the idea of a series, but the talks soon foundered.

Four years later, the USA Network launched the series "Royal Pains," in which a doctor, after being expelled from the medical community for treating patients who could not pay, became a concierge doctor to the rich and famous in the Hamptons community in Long Island. The plaintiffs were not compensated for this idea, and promptly sued.

The plaintiffs alleged the breach of an implied contract on the theory that that writer-creators pitch creative ideas to prospective purchasers with the object of selling those ideas for compensation and that it was standard in the entertainment industry for ideas to be pitched with the expectation of compensation in the event of use.

Decision Below

At trial in the District Court for the Southern District of New York, the defendants successfully moved for dismissal on the basis that the Copyright Act pre-empted a breach of contract claim based on idea submission. The theory of pre-emption is, in essence, that all claims in the nature of copyright must be brought under the Copyright Act, and cannot be brought under state-based causes of action.

This presented a problem for the plaintiffs under U.S. law, as copyright protection exists for "original works of authorship fixed in any tangible medium of expression," but does not extend to an "idea... regardless of the form in which it is described, explained, illustrated, or embodied." 17 U.S.C. § 102(a), (b). Thus, in this field of lawsuit, an implied contractual breach is seen as a more compelling claim, not least because it exposes defendants to considerable discovery on the question of whether they independently arrived at the series idea.

Decision on Appeal

On appeal, the Second Circuit reversed the District Court's decision, holding that the lawsuit contained an "extra element" that distinguished it from a claim equivalent to subject matter governed by copyright legislation.

In this case, the plaintiffs' claim was "qualitatively different from those proscribed by copyright law" primarily because it alleged extra elements beyond mere use or copying. These included (i) an implied promise to pay for use of disclosed ideas; (ii) mutual assent and valid consideration; and (iii) an assertion of rights solely against the contractual counterparty, not the public at large.

In arriving at this decision, the Second Circuit explicitly applied Montz v. Pilgrim Films & Television, Inc., a 2010 en banc decision of the Ninth Circuit which also allowed a contractually based "idea theft" lawsuit to survive despite a 7-4 split of judges hearing the case.

One conceptual difficulty largely bypassed by the Second Circuit is the extent to which the policy of copyright can be circumvented by dressing up what is essentially a copyright claim in slightly different clothing. From the face of the decision, it now appears that a plaintiff can bypass any copyright pre-emption claim even without an express contractual promise to reward a generalized pitch. This result would seem to be somewhat impractical in a business where ideas from the vague to the intricately detailed proliferate, and where producers of ideas in all media are besieged by unsolicited pitches. If U.S. copyright law is not seen to protect such ideas, should contract law do the same based merely on an allegation that an idea was "pitched for pay"?

Potential Implications

Given that the Supreme Court declined to hear the appeal of the Montz case from the Ninth Circuit, and given that the Second Circuit has now established a similar standard for "idea theft" allegations, it is expected that studios will adjust their practices to live with the narrow pre-emption case law absent a legislative overhaul of the pre-emption clause in the U.S. Copyright Act. Thus, in the two major U.S. circuits for the entertainment industry, studios will have to be even more careful in dealing with idea pitches in future.

However, in Canada, there are two current Supreme Court appeals that are grappling with the general issues raised in the Forest Park Pictures case. In the Cogeco Cable Inc. v. Bell Media appeal heard in April 2012 (for which we were counsel for Cogeco), the Supreme Court considered the issue of whether the Copyright Act could pre-empt or override conflicting decisions made by the CRTC in the broadcasting sphere.

In the Claude Robinson, et al. v. France Animation S.A., et al. cases, which the Supreme Court agreed to hear in May 2012, the predominant issue is the extent to which the Canadian Copyright Act provides protection to story concepts allegedly infringed by later programs that adopt a cluster of similar elements. The Supreme Court will have to weigh in on the dividing line between idea and expression, which will require it to establish a standard that protects authors against "colorable imitation" while bearing in mind that all stories have at least some debts to their ancestors. (The latter notion was beautifully developed by Northrop Frye in his 1962 Massey Lectures for The Educated Imagination, now audible online here on the CBC Radio website.)

Thus, although the Forest Park appeal deals with a "made-in-the-U.S.A." doctrine, the themes it grapples with are very much in issue in the Canadian copyright setting.

Case Information

Forest Park Pictures v. Universal Television Network Inc., 2d Cir.

Docket: 11-2011-CV

Date of Decision: June 26, 2012

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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