Appeals Court Effectively Opens The Floodgates For People To Claim Hollywood 'Stole' Their Ideas

from the this-will-not-end-well dept

Fri, May 6th 2011 10:15am — Mike Masnick

We've discussed before how whenever there's a successful TV show or movie, people come out of the woodwork to insist that they actually came up with the idea. Usually, these claims go nowhere, in large part, because you can't copyright an idea. There are, of course, a few famous exceptions, but those are cases where there was a clear ongoing and detailed working relationship beforehand.

However, a new ruling in the 9th Circuit appeals court (which has a reputation for somewhat wacky rulings on intellectual property issues) may open the floodgates on these kinds of lawsuits. The ruling is an en banc ruling (meaning heard by all of the judges in the court), and it overturned the earlier ruling from the same court that was just done by a three judge panel. That means the only place to go from here is the Supreme Court, and it's not at all clear that the Supreme Court would be that interested in the case (as of now, I don't think there's a real split between circuit courts, which is often a key determining factor for the Supreme Court).

The ruling itself is on some rather specific and slightly technical aspects of copyright law vs. contract law. You can also watch the video of the one hour hearing that was held for this case earlier this year, which is also a good way to grasp some of the finer points: However, a simple way of explaining it is this: federal copyright law is clear that it overrules any state copyright law or equivalent state law. This was to make sure that there was a single unified copyright law, and people didn't have to deal with the vagaries and differences found in 50 different state copyright laws. Part of the (quite reasonable) fear was that states would be pressured to make even more draconian copyright laws, and that would harm the true intent of copyright law.

Now, copyright law (again) does not cover ideas. You only get a copyright on the expression, but not the idea. However, there is a California state law that creates an implied contract in certain cases, and that's where this lawsuit hinges. The question is whether or not in presenting the idea for a TV show slightly similar to what is now Ghost Hunters, an implicit contract was formed, which meant that the SciFi Channel (now SyFy) couldn't make Ghost Hunters without working with the plaintiffs. While I have all sorts of issues with "implied" contracts in cases like this, the earlier rulings had thrown out the case based on the fact that this was really a copyright claim in disguise, and copyright law preempts the state contract laws, and then the case goes nowhere because this is really about an idea, which is uncopyrightable. Clean, simple and sensible.

Unfortunately, the majority here twists itself into contortions to claim that this is different. It claims that the specific argument is not about rights covered by copyright law, and thus it is a contractual dispute, where there is an implied contract. As the dissenting judges point out, this doesn't make much sense. The specific complaints by the plaintiffs are rights that are clearly provided under Copyright Law.

But the real issue here is that this will open the floodgates for similar lawsuits. We already see plenty, but they're usually quickly dismissed. Now there will be more such cases, where the focus will be on whether or not there's an "implied contract," when someone shows a studio a script or an idea. In the end, that's really only going to make it more difficult for people who have ideas, because studios aren't going to want to hear them for fear of future liability. If multiple people come up with similar ideas, studios shouldn't be forced to pay them all due to some bizarre implied contract...

This kind of ruling really seems to undermine the whole point of ideas not being copyrightable...

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Filed Under: california, copyright, ideas, implied contract, movies

42 Comments

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EE, 6 May 2011 @ 10:30am

I have no problem with this. Taking pitches and then staffing the project with your friends instead SHOULD have bad repercussions.
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sehlat (profile), 6 May 2011 @ 10:44am

"This kind of ruling..."
That is precisely the point here.

Copyright is a government-granted, government-recognized, and government-enforced monopoly. And you think greed recognizes an artifical limit like "ideas" on its scope? Why pay for hired guns when the taxpayers can provide them?
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Anonymous Coward, 6 May 2011 @ 10:51am

It may not be rational, but I like the idea of Hollywood getting a taste of their own medicine and having to worry about folks suing them over every little thing. Karma and all that.
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FUDbuster (profile), 6 May 2011 @ 10:52am

In the end, that's really only going to make it more difficult for people who have ideas, because studios aren't going to want to hear them for fear of future liability. If multiple people come up with similar ideas, studios shouldn't be forced to pay them all due to some bizarre implied contract...

I think you're missing the other side of it, which is that people won't want to pitch ideas for fear that they will be taken. The implied contract protects people so they'll want to pitch more ideas. I find your desire to give the idea pitchers no protection odd.
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Anonymous Coward, 6 May 2011 @ 10:53am

Re: "This kind of ruling..."
and how does government enforce laws? With violence.
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PrometheeFeu (profile), 6 May 2011 @ 10:53am

Re:
You mean like like loosing out on the creative mind that originated the idea? Or being the subject of boycott, ridicule and hatred?
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Mike42 (profile), 6 May 2011 @ 10:53am

Only in California?
This is a California state law. This implies that all the studios have to do is move out of California, and not take pitches from people who live there. (Or get the law changed.)
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PrometheeFeu (profile), 6 May 2011 @ 10:56am

On the other hand, if this becomes common, it will kill the big studios. Then, hopefully the balance of power will shift towards the likes of Google who have anti-copyright interests and we can stomp copyright abuse.
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EE, 6 May 2011 @ 11:01am

Re: Re:
all of the above...

However, the real tragedy occurs when the person who pitched the idea has no connections and no idea how to play their game. Corporations rolling over the little guy is not exactly unheard of in our culture.
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PrometheeFeu (profile), 6 May 2011 @ 11:05am

Re: Re: Re:
Quite honestly if the sum total of their work on the project is to have the more or less well-formed idea of a show that follows people who "hunt ghosts", I'm not sure why that deserves any compensation when someone else uses that idea. I've mentioned idea to friends who then went on to actually make something of it, but I would never dream of getting anything more than "thanks". They are the ones that did the hard part.
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zcat (profile), 6 May 2011 @ 11:20am

Business Idea
http://xkcd.com/827/

Does this mean Randall Munroe can sue the 9th Circuit appeals court?
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Huph, 6 May 2011 @ 11:22am

Re:
And besides, we've already been operating in a system where most companies haven't accept unsolicited ideas for years because of just this reason. Also, most performers/bands/songwriters often explicitly express that they don't accept unsolicited submissions; under fear that a very superfluous phrase might match a submission ("That's the way I am" vs. "That's just the way I am"). There's a whole King of the Hill episode dedicated to this topic.

I also find it odd to ignore the protection to the individual that implied contracts can provide. This is an instance where the good of society and the individual almost completely coincide. Society is served by individuals expressing their ideas. We want to encourage that, right? Who cares about protecting corporations' ability to capitalize at the expense of individuals?
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John Doe, 6 May 2011 @ 11:22am

Re:
Why don't they create a real contract instead of an implied contract with sort of a non-compete clause?
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Gwiz (profile), 6 May 2011 @ 11:25am

Re:
I think you're missing the other side of it, which is that people won't want to pitch ideas for fear that they will be taken. The implied contract protects people so they'll want to pitch more ideas. I find your desire to give the idea pitchers no protection odd.

Why not just get a written contract before pitching the idea? A boilerplate kind of contract should work. I am not sure I would pitch a idea for something unless I had, in writing, a guarantee of what I will gain from the whole thing.

This "implied contract" thing seems like could "imply" anything you wanted it to, after the fact. It's lots of shades of gray in a black & white legal world.
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Anonymous Coward, 6 May 2011 @ 11:26am

Re:
Uhh...so before this ruling, no one pitched ideas, and certainly no one pitched ideas outside of California?

FUDspreading, as always.
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crade (profile), 6 May 2011 @ 11:28am

Re:
lol, good. Maybe they will make a real contract then or actually do something useful and implement the idea themselves.
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Huph, 6 May 2011 @ 11:31am

Re: Re: Re: Re:
That's a bit different. Were you planning on pursuing your idea at all? Of course it wouldn't matter to you if you had no intention of realizing your vision.

However, if you were out there pitching shows in an attempt to find employment as a writer for a series, I can imagine you might have a different take on the situation.
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Anonymous Coward, 6 May 2011 @ 11:34am

IIRC, the old case law said implied contracts are not preempted by copyright law if they provide an "extra element" not found within the rights of copyright. So for example, an implied contract that an idea not be used without permission is preempted [granting permission is part and parcel of controlling copyrighted work], but an implied contract that an idea not be used without remuneration is not [because nothing in copyright guarantees you get paid]. I'll have to read the new Montz opinion to see how that's changed [if at all], but if the old case law prevailed, this doesn't really open up the floodgates, I don't think. Most people who make frivolous claims of idea theft against Hollywood are crazies without a leg to stand on anyway, often alleging tortured theories of how the studios got access to their work. Implied contracts require privity, so the only people who can make a good case for them are those who actually had access to the Hollywood higher-ups. That means the only cases that will go anywhere are where there were actual negotiations, and all studios need to do in order to avoid being on the business end of these claims is not dick talent over when it comes to said negotiations.
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Huph, 6 May 2011 @ 11:41am

Re: Re:
Seriously? The reason you don't do this is because by default no company would ever sign one. It's in a studio's interest to be able to use someone else's idea without compensation. The whole point of having implied contract law is to stop companies from doing exactly what would best fit their profit model: not paying "employees" for their intellectual endeavors.

Individuals and small companies often do sign NDAs and such, but large companies (Hollywood Studios, for instance) have more than enough muscle to refuse a contract and compel you to divulge your idea. If 20th Century Fox wants you to pitch an idea, but won't sign a contract, what struggling screenwriter (etc) would pass up the opportunity? That's why these contracts exist, to stop companies from taking advantage of people who have no recourse (and they may be starving and drowning in college loan debt).

It surprises me that TD would be against protecting the small guy. Implied contracts are massively useful to individuals, and an impediment to corporations. I prefer that we err on the side of the individual.
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Anonymous Coward, 6 May 2011 @ 11:44am

Re: Re:
1. Come up with idea.
2. Type idea to word document.
3. Save and back up word document
4. Make (Sha) hash sum of word document

5. Get some timestamp authorities to timestamp hashsum (could be something as simple as e-mailing it to yourself) for proof.

6. Make contract with Hollywood with Hash sum in contract. Contract should say, "I'm about to give you an idea, if you use it, you pay me ..."

7. Both parties sign contract

8. Turn document over to Hollywood.

9. If they use the idea, you make sure they pay you.

(Above idea is non-patentable).
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Anonymous Coward, 6 May 2011 @ 11:45am

Re: Re:
Because no TV studio will sign one just to hear about your great new show idea, script, anything. You could have the whole screenplay written, characters cast, and people memorizing lines... and a studio is not going to sign anything before they seen details.
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Anonymous Coward, 6 May 2011 @ 11:46am

Re: Re: Re:
"It surprises me that TD would be against protecting the small guy."

Techdirt isn't about "the big guy" vs "the small guy". We have nothing against big corporations (ie: Google) when they do nothing wrong, and we often complain about small people when they do things wrong, even if their offense is against big corporations.
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Jay (profile), 6 May 2011 @ 11:47am

Re: Re: Re: Re:
And while I'm reading this, that's the exact part that makes no sense.

The studios were approached a few times in 1996 - 2004. Three years later, the concept of ghost hunting is taking on by someone else, and Smoller/Montz want compensation for the idea.

Hello? Were they the first Ghostbusters? Can we see the marketing material used in the meetings? How is a presentation an implied contract?

Obviously, this is quite a ludicrous reason for judges to make more through the cases that end up in their district.
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anymouse (profile), 6 May 2011 @ 12:02pm

I had an idea once....
I had an idea about how to get obscene amounts of money for doing little actual work....

You take someone's idea that may or may not be in use, but is written down somewhere (like copyrighted works, or filed at the patent office), you find someone who's using something similar to the idea in the real worls, and you threaten to sue them until they either go out of business or pay you for the use of your idea.

Since all the IP lawyers these day's are using my idea, I think I should get a cut of all legal fees (lawyers for both the plantiff and defendant should have to 'license' the idea from me) plus I should get a cut of any settlements.... It's only fair, since I had the idea, right?

/sarcasm off
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Gwiz (profile), 6 May 2011 @ 12:04pm

Re: Re: Re:
The reason you don't do this is because by default no company would ever sign one.

Why not? It's seems that a company would want the terms spelled out on a written contract as opposed to a fuzzy implied contract.

...but large companies (Hollywood Studios, for instance) have more than enough muscle to refuse a contract and compel you to divulge your idea.

I can't speak for anyone else, but no company anywhere has enough muscle to compel me to divulge my idea unless I choose to.

If 20th Century Fox wants you to pitch an idea, but won't sign a contract...

If 20th Century really wanted me to pitch the idea, why would they have a problem with a contract that contains the same things as an implied contract would?

...what struggling screenwriter (etc) would pass up the opportunity?

The smart ones. Or at least the ones with wee shred of business sense.

That's why these contracts exist, to stop companies from taking advantage of people who have no recourse (and they may be starving and drowning in college loan debt).

They certainly do have a recourse, they can not share their idea until they are guaranteed a return.

Look, I am for protecting the small guy, just not so much about protecting the small guy from his own stupidity.
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Eric L., 6 May 2011 @ 12:28pm

Missing the point
Don't you people realize that the corps could just as easily exploit this for themselves? Think of the anti-innovation that is software patents. It certainly isn't individuals who wield the power there, and I don't think it will be here either. Corporations have the monetary resources to buy massive legal power. I'm surprised no one has thought have this.
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NotMyRealName (profile), 6 May 2011 @ 12:29pm

My problem with copyrighting ideas is, How close is too close?

I think I can safely assume they didn't use the script line by line. How much of the synopsis needs to be copied to be considered unoriginal?

Consider:
Original Version-
A reality show about people that go places and try to see ghosts.
Where is the line?-
A reality show about people that go places and try to see various Mythical creatures including ghosts.
A reality show about one guy that goes places tries to see ghosts.
A reality show about random contestants that go to haunted houses.
A reality show about people that go to one house and continuously try to scientifically prove ghosts exist.
A comedy show about people that go places and try to see ghosts.
A comedic fake reality show about ghosts trying to interact with humans.
A reality show about albino people with temper problems that rearrange furniture for a living.

Any of these are arguably 'slightly similar' or even 'mostly similar' or 'derivative.'
How could anyone possibly draw a line that makes any sense in anything approaching a universal manner? Any such system would start broken and only get worse.
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Joe Publius (profile), 6 May 2011 @ 12:54pm

Re:
I've been wondering about this idea too. I've been around this blog long enough to know that some of us kind of hope for an IP Blue Screen of Death moment. Some case ruling or new law that makes the current IP regime so disfunctional that reform becomes a necessity.

I don't think that this ruling is the IPBSOD moment we're waiting for, but it certainly is a pretty wacky decision IMO, and it's relied on as a precedent, then I think that the ball is definitely picking up some speed down the hill.
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Joe Publius (profile), 6 May 2011 @ 12:55pm

Re: Re: Re:
So there's an upside to this? That the pitchers will stop pitching and start creating? Nowadays it's never been easier.
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FormerAC (profile), 6 May 2011 @ 1:02pm

Re: Re: Re: Re:
The reason you don't do this is because by default no company would ever sign one.

Why not? It's seems that a company would want the terms spelled out on a written contract as opposed to a fuzzy implied contract.

I own a movie studio. You want to pitch me an idea for a movie.

Production has just begun on a movie about vampires who work at gas stations.

I sign your non-compete/no disclosure contract. We meet and you pitch me a movie about vampires who pump gas.

What happens to my movie?

That is why they will never sign a contract like that. If they EVER did ANYTHING that even smelled like your idea, they'd be in court forever.

You can't have an environment that encourages innovation and new ideas if everyone and everything requires non-compete/no disclosure/secrecy.
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Anonymous Coward, 6 May 2011 @ 1:04pm

Turnabout is what?
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Gwiz (profile), 6 May 2011 @ 1:15pm

Re: Re: Re: Re: Re:
Ok. Fair enough. I see you point there.

The movie/tv business is so far removed from my world and I am out of my element here.

It's just that my common sense tells me that if I am making my living by selling ideas, then I would certainly want to cover my ass before releasing my idea.

Just out of curiosity though, how is your scenario different with a implied contract law in place? Couldn't the same lawsuits be filed anyways if I pitched my movie idea to you, even after you were in production, but before release?
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Chronno S. Trigger (profile), 6 May 2011 @ 1:19pm

Re:
A reality show about people who go around debunking ghost sightings. Though, I think most ghost hunting shows do a damn good job of that already.
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Gwiz (profile), 6 May 2011 @ 1:21pm

Re: Re: Re: Re: Re: Re:
Er..I see your* point there.

I actually can't see you point anywhere since this the internet - lol.
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Anonymous Coward, 6 May 2011 @ 1:42pm

Re: Re: Re: Re: Re:
"You can't have an environment that encourages innovation and new ideas if everyone and everything requires non-compete/no disclosure/secrecy."

Gwiz already responded, but I don't see how an implied contract makes things any better. Now if he pitched the same idea to Hollywood without any sort of explicit contract and Hollywood did anything that remotely looks like that idea ...

How again does that encourage innovation? The only thing it encourages is Hollywood to actively avoid listening to any ideas from anyone in fear that if they listen to an idea and do anything remotely similar ...
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Khstapp, 6 May 2011 @ 2:58pm

Response to: Anonymous Coward on May 6th, 2011 @ 10:51am
I'm inclined to agree. Hollywood tends to be copyright maximalists when it suits them so I see this ruling as a blessing in disguise. The avalanch of lawsuits will hopefully raise awareness of how out of date our concept of copyright is. Maybe even Hollywood will realize that copyright is twisted far beyond it's intended purpose.
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Lawrence D'Oliveiro, 6 May 2011 @ 6:32pm

Re: Enough With The FUD, Buster!
So, have you found a law or legal textbook that defines what �intellectual property� means yet?
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Name, 6 May 2011 @ 6:59pm

The 9th Circuit and En Banc
"The ruling is an en banc ruling (meaning heard by all of the judges in the court), and it overturned the earlier ruling from the same court that was just done by a three judge panel. That means the only place to go from here is the Supreme Court..."

The Ninth Circuit is unique in that it is so large, the "en banc" court consists of 11 randomly selected judges, out of the 29 active judgeships. The defendants could request a "super en banc", but the chances of that request being granted are nil.
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FUDbuster (profile), 7 May 2011 @ 1:39am

Re: Re: Enough With The FUD, Buster!
So, have you found a law or legal textbook that defines what �intellectual property� means yet?

What is your problem? Why are you following me around asking me the same question? This is now the third time that you've asked me this that I'm aware of. I've already answered you: http://www.techdirt.com/articles/20110503/15385914134/disney-claims-its-copyright-infringement-dish- to-offer-starz-to-non-premium-subscribers.shtml#c648

WTF?
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Anonymous Coward, 7 May 2011 @ 3:21pm

Mike, saying "whether or not" is redundant... it's just "whether".
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Anonymous Coward, 10 May 2011 @ 7:55pm

Re:
http://www.writersblock.ca/tips/monthtip/tipapr96.htm

"Whether or not" is completely acceptable. It may not be recommended, but it is not grammatically incorrect.
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Jose_X, 11 May 2011 @ 8:06pm

Re: Re: Re: Re: Re:
The person should have gone open and hence built up reputation quickly. This would have offered tremendous leverage later on.

What I can understand is that if there is a meeting in confidence then something might be implied. Hollywood is free to reject any such meeting and simply tell others to go and do their stuff out in public and will pick up whatever ideas they want. They could also then take the risk that this person would strike a deal with someone else and get first mover.

So while I don't know the details here, I am not against the concept of implied contract.. even if I don't like taking that path of secrecy and like open source instead.
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