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Idea Theft After Grosso—The Proliferation of Expensive and Burdensome Lawsuits

By Camilo Echavarria
[Winter 2007]

A writer sets up a meeting with a development executive at a major studio to pitch the next great idea for a reality television show. The pitch meeting lasts approximately 10 minutes, during which the writer explains his concept for a reality show set in a hair salon in either New York or Los Angeles about the day-to-day operations of that salon from the perspective of the well-known stylist/owner. No pitch materials, proposed scripts, or other written materials are provided. At the end of the pitch, the executive is not impressed and informs the writer that the studio is going to pass. Afterward, the development executive—who is one of a dozen executives for the studio—goes on to the next pitch meeting, and the one after that, and the one after that. In all, that executive will hear hundreds of pitches during the course of a year, and the studio as a whole will hear thousands of pitches. In the next two years, the development executive is pitched a “salon” reality television show at least five times, if not more.

Then the development executive hears a “salon” pitch from an established reality television show producer. The established producer provides a written treatment for the idea, whose focus is on the owner and head stylist of a hair salon in Los Angeles. Given a variety of variables (including the reputation of the producer), there is interest at the studio, and the “salon” reality television show is green-lit and eventually airs. The first writer sees advertisements for the new salon reality show, and is convinced that his idea was stolen. The writer sues the studio for breach of an implied-in-fact contract under California law, otherwise known as idea theft.¹

Prior to August 2004, it was possible that this lawsuit would be dismissed at the pleading stage based on copyright preemption. That appears to have changed, however, in the aftermath of the Ninth Circuit decision of Grosso v. Miramax Film Corp., 383 F.3d 965 (9th Cir. 2004), which held that copyright preemption did not apply to certain idea-theft claims. As a result of Grosso, studios face the prospect of a lengthy and drawn-out lawsuit even in the most frivolous of actions.

The claim for idea theft—Hollywood style

The claim for breach of implied-in-fact contract, also known as idea theft, was first recognized in the seminal case of Desny v. Wilder, 46 Cal. 2d 715 (1956). There, plaintiff called studio executive Billy Wilder on the telephone, and told Wilder’s secretary about his idea for a movie based on the story of a man who was trapped in a cave. During the call, plaintiff and Wilder’s secretary agreed that plaintiff would be paid if his idea was used. Wilder later produced a movie that plaintiff asserted was based on his idea. Under these facts, the California Supreme Court held that an implied-in-fact contract was formed between plaintiff and Wilder, and that Wilder was obligated to pay plaintiff if he used plaintiff’s ideas.

The newly created claim set forth in Desny has evolved only slightly since 1954. To state a claim for breach of an implied-in-fact contract in an idea submission case, the plaintiff must allege: (1) that he submitted his ideas to defendant; (2) that before plaintiff submitted his ideas to defendant, he conditioned their disclosure upon defendant’s agreement to pay for those ideas if used; (3) that defendant knew, or should have known, the condition on which the disclosure was being made; (4) that defendant voluntarily accepted the submission on plaintiff’s terms and thereby impliedly agreed to pay plaintiff for any ideas used; (5) that defendant actually used plaintiff’s ideas; and (6) that those ideas had value. Mann v. Columbia Pictures, Inc., 128 Cal. App. 3d 628, 647 n.6 (1982); see also Faris v. Enberg, 97 Cal. App. 3d 309, 318 (1979) (plaintiff must show that “the offeree voluntarily accepted the disclosure knowing the conditions on which it was tendered”).

In the context of a formal pitch meeting, the first four requirements generally are implied: A “pitch meeting” is the setting where a writer/producer discloses his idea, treatment, or script to an executive in the hope that the executive will like and use the idea for a show or movie in return for credit and compensation.² Thus, for networks, studios, and producers of content, in general, idea-theft claims usually come down to whether the idea was used and whether it had value. (Of course, on the facts of any particular case, one of these four requirements could preclude a suit, even if there was some kind of pitch involved.)

It is important to note that unlike in a copyright context, in California, the idea-theft plaintiff may not be required to show that his idea was “novel” or “unique” in order to state a claim for idea theft. Desny, 46 Cal. 2d at 733-34 (“[e]ven though the idea disclosed may be ‘widely known and generally understood’ [citation] it may be protected by an express contract providing that it will be paid for regardless of its lack of novelty”); cf. Gunther-Wahl Prods., Inc. v. Mattel, Inc., 104 Cal. App. 4th 27, 35 (2002) (“Mattel acknowledges on appeal that an agreement to disclose an abstract idea may be compensable, even though it lacks novelty”). Therefore, with respect to the writer who submits an idea for a “salon” reality show, the studio cannot simply argue that the idea was not novel, even if four other writers submitted salon reality show ideas to the executive and similar reality shows already had aired on numerous networks prior to the writer’s pitch.³

But that does not mean that lack of novelty is irrelevant in defending idea-theft claims. To the contrary, lack of novelty can be important to demonstrate that plaintiff’s idea was not used. For instance, when comparing plaintiff’s ideas with the actual show, defendant can convince the court that “generic ideas” that exist in both the show and plantiff’s pitch simply should be disregarded. Lack of novelty also bolsters the credibility of the defense’s claim that plaintiff’s idea was not used. Finally, in the most generic of situations, lack of novelty can be used to argue that plaintiff’s ideas had no value, the last factor the plaintiff needs to prove in an idea-theft case.

Copyright preemption before Grosso—A defendant’s trump card

Before the Ninth Circuit decision in Grosso, studios and networks had a reasonably good chance of disposing of idea-theft cases during the pleading stages of the litigation, based on copyright preemption. The Federal Copyright Act, 17 U.S.C. § 301(a), expressly preempts all state law claims that assert “legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 … and come within the subject matter of copyright as specified by sections 102 and 103.” The Copyright Act preempts a state law claim when “(1) the work on which the state claim is based is within the subject matter of copyright; and (2) the state cause of action protects rights that are qualitatively equivalent to copyright protection.” Worth v. Universal Pictures, Inc., 5 F. Supp. 2d 816, 821 (C.D. Cal. 1997).

Applying this test, courts in the Central District of California repeatedly found idea-theft claims to be preempted. Under the first prong, courts found that ideas fell within the purview of copyright, but were not protected because copyright law only protects the written expression of ideas and not the ideas themselves. Under the second prong, courts found that the idea-theft claim protected rights equivalent to copyright, namely the right to protect and be paid for the use of one’s copyrightable work. See Idema v. Dreamworks, Inc., 162 F. Supp. 2d 1129, 1190 (C.D. Cal. 2001) (holding that idea-theft claim based on alleged use of plaintiff’s ideas and materials for movie was preempted by Copyright Act); Entous v. Viacom Int’l, Inc., 151 F. Supp. 2d 1150, 1160 (C.D. Cal. 2001) (same for television series); Selby v. New Line Cinema Corp., 96 F. Supp. 2d 1053, 1061 (C.D. Cal. 2000) (same for movie); Metrano v. Fox Broadcasting Co., 2000 WL 979664, at *3 (C.D. Cal. 2000) (same for television series); Endemol Entertainment B.V. v. Twentieth Television, Inc., 48 U.S.P.Q.2d 1524, 1528 (C.D. Cal. 1998) (same for television series); Worth v. Universal Pictures, Inc., 5 F. Supp. 2d 816, 822 (C.D. Cal. 1996) (same for movie).⁴

Before Grosso, this line of cases affected idea-theft litigation in two ways. First, these cases enabled defendants to defeat idea-theft claims at the onset of a case, before having to go through the burden and expense of discovery, motion practice, and trial. Second, as important as having the ability to get cases dismissed at the onset of litigation was the reciprocal “chilling” effect on plaintiffs’ attorneys. Because removal and motion practice involved with copyright preemption required significant resources and time, and the defense was successful in certain situations, plaintiffs’ counsel were more hesitant to bring these claims. See Glen L. Kulik, Copyright Preemption: Is this the End of Desny v. Wilder?, 21 Loy. L.A. Ent. L. Rev. 1 (2000).

Grosso v. Miramax Film Corp.—The end of preemption

In 1999, writer Jeff Grosso sued Miramax, claiming that Miramax improperly used his script and ideas in the movie Rounders. Grosso sued for both copyright infringement and idea theft. The district court granted Miramax’s motion for summary judgment on all claims. The court found that because the two works at issue—Grosso’s screenplay and the movie Rounders—were not substantially similar, plaintiff’s copyright claim failed as a matter of law. The court found the idea-theft claim was preempted. The Ninth Circuit, in a twelve-paragraph decision, affirmed the granting of summary judgment with respect to the copyright claim, but reversed on the idea-theft claim. Grosso v. Miramax Film Corp., 383 F.3d 965, 968 (2004). Without discussing or even citing to the numerous cases that had found idea-theft claims to be preempted, the Ninth Circuit held simply that the implied-promise-to-pay element of an idea-theft claim was an “extra element,” such that the rights being protected were not “qualitatively equivalent” to the rights protected by copyright. Id. at 968.

Grosso’s impact—The proliferation of expensive and burdensome lawsuits

The impact of the Grosso decision has been immediate and significant as idea-theft claims have proliferated. The Grosso decision was a two-part whammy to networks and studios: not only did the Grosso decision make idea-theft cases more costly to defend by foreclosing a defendant’s ability to get a case dismissed at the pleading stage, it also emboldened plaintiffs’ counsel to bring more of them.

First, the expense and burden of defending idea-theft cases cannot be overlooked. Idea-theft cases are typically fact-intensive. And, in the situation where there are little to no written records of the “idea” that purportedly was taken, factual disputes necessarily abound as to what was said at the purported pitch meeting. Needless to say, the fewer the documents, the more a plaintiff may exaggerate or simply not remember correctly the details of the idea he presented at the pitch meeting. On the studio side, given the number of pitches an executive hears every year and the fact that pitches often last no more than ten minutes, it should come as no surprise that executives may have little recollection about a plaintiff’s pitch. At bottom, idea-theft cases are fact-intensive, making summary judgment more difficult and defense of the action more time-consuming and burdensome.

The difficulty in defending an idea-theft claim versus a copyright claim was apparent in a recent case involving The Apprentice. Mark Bethea et al. v. Mark Burnett et al., No. CV04-7690 JFW (PLAx) (C.D. Cal.). There, the plaintiff sued in federal court for copyright infringement and filed a separate action in state court for idea theft. The state court case was stayed pending resolution of the federal court case. Defendants Mark Burnett and others obtained summary adjudication in federal court over the plaintiff’s copyright claim. The district court found that plaintiff’s idea was not substantially similar to The Apprentice and, in dicta, intimated that The Apprentice was independently created. After dismissal of the federal court action, the state court action proceeded. Despite winning in federal court, defendants did not obtain summary judgment, which led to an eventual settlement of the action shortly before trial was set to commence.⁵

Second, because of the relative ease by which a plaintiff can assert an idea-theft claim after the Grosso decision, plaintiffs’ counsel appear to be more willing to file these claims in general. Indeed, in many instances, idea-theft claims are being asserted instead of copyright claims. Unlike infringement claims, where a victorious defendant (or plaintiff for that matter) may be entitled to recover its attorneys’ fees, there is no such recovery available in idea-theft suits. Likewise, copyright claims are much harder to plead and prove, especially when one considers the fact that idea-theft claims may not require novelty.

As a result, it is not uncommon today for networks, studios and producers to be sued by several different individuals in different lawsuits and jurisdictions over the same show. And, in each case, plaintiff asserts that she came up with the idea for the show and that her ideas were stolen. For instance, the producers of The Apprentice have had to defend three separately filed lawsuits from individuals claiming they came up with the premise for the show. Likewise, Fox was sued in two different lawsuits related to Fox’s reality television show The Next Great Champ.

It is important to note that the proliferation of idea-theft claims also stems from the pitch process itself and the advent of reality television. As discussed in the introduction, networks and studios receive literally thousands of pitches for television shows and movies each year. Couple that fact with the existence of reality television, where even the most mundane and simple idea can lead to a successful show. Theoretically, all someone would have to say at a pitch meeting to an executive is “singing competition,” “talent search,” “search for the next big thing,” “competition for a good job,” “race around the country/world,” “real lives of celebrities” or “dating show” for that person to assert that his idea was taken when a similar show is produced. And, because numerous shows based on such basic concepts have been produced and aired by all the major networks and cable channels, there are most assuredly hundreds of individuals who could assert that their ideas were taken.⁶ It is simply inescapable that because ideas for reality shows are rather simple and have similar formats, executives are inundated with the same ideas all the time.

Even the most obvious and generic of ideas have led to lawsuits. For example, the fourth season of Average Joe—a dating show where “average”-looking men try to get the affection of a beautiful woman—involved doing a makeover of these men to make them appear more attractive. This premise was obvious and generic given the number of shows that had done similar things, such as Extreme Makeover, The Swan, Fashion Emergency, and Queer Eye for the Straight Guy. Regardless, the fourth season of Average Joe led to a lawsuit by a former contestant claiming he had come up with the idea. Costaras v. NBC Universal, No. 2:06-cv-00402-RSWL-MAN (C.D. Cal.).

In the end, virtually any successful show, and even a not-so-successful show, is likely to encounter claims from individuals who submitted similar ideas in the past. A successful series will necessarily catch the attention of any writer or producer who may have submitted a “similar” idea, even in the distant past. Indeed, ABC was recently sued in Los Angeles Superior Court by a writer who claims to have submitted a script in the late 1970s—nearly 30 years ago—that allegedly was used to create the hit show Lost. Anyone familiar with the script review process or the turnover of development executives at major networks will understand the absurdity of this claim. Other movies and television shows that plaintiffs have alleged were stolen since Grosso include Wedding Crashers, The Last Samurai, Broken Flowers, World Vision: An American Anthem, Nitido, Average Joe 4, Hell’s Kitchen, Million Dollar Idea, Project Runway, So You Think You Can Dance, and Ghost Hunters—just to name a few.

Footnotes:

1 The hypothetical in this article is fiction and any similarity to an actual case is purely coincidental.
2 In the case of unsolicited submissions and other non-formal pitches, however, these four requirements represent a significant hurdle to plaintiffs. If there is no pre-disclosure understanding that the writer/producer is disclosing an idea on the condition of payment for use, then there is no recourse or cause of action. California law requires a clear and mutually understood expectation of payment for the idea before imposing liability: “The idea man who blurts out his idea without having first made his bargain has no one but himself to blame for the loss of his bargaining power.” Desny, 46 Cal. 2d at 739.
3 In the case of the hypothetical, there are several reality shows that follow the head of a business. For example, The Restaurant and Hell’s Kitchen followed head chefs in major cities, and Opening Soon is about opening high-end retail stores in major cities.
4 Indeed, just two months before Grosso was decided, the author of this article successfully moved to dismiss an idea-theft case involving the television show Scout’s Safari. Order Denying Plaintiffs’ Motion to Remand and Granting Defendants’ Motion to Dismiss, Suser v. National Broadcasting Company, No. CV04-2866 CBM (Mcx) (C.D. Cal. June 30, 2004).
5 Ironically, the result in Grosso was different. After the Ninth Circuit remanded the case, Miramax was successful on summary judgment on the merits of the idea-theft claim.
6 Basic concepts for reality television shows have produced literally dozens of similar shows:

• Singing Competition: six seasons of American Idol, four seasons of Nashville Star, and two seasons of Rock Star and Making the Band.
• Talent Search: the singing competition shows Star Search and Fame, and two seasons of So You Think You Can Dance, The Search for the Most Talented Kid in America and America’s Got Talent.
• Search for the Next Big Thing: seven seasons of America’s Next Top Model (model), six seasons of American Idol (pop star), four seasons of Last Comic Standing (comedian), Next Action Star (action star actor), Sports Illustrated Swimsuit Model Search (swimsuit model) and Nashville Star (country singer), three seasons of Project Runway (fashion designer), and two seasons of Rock Star (lead singer for band), HGTV Design Star (home designer), The Contender (boxing) and The Next Great Champ (boxing).
• Competition for a Good Job: five seasons of The Apprentice, two seasons of Hell’s Kitchen and Top Chef, and one season of The Apprentice: Martha Stewart, The Benefactor and The Rebel Billionaire.
• Race Around the Country/World: ten seasons of The Amazing Race and Treasure Hunters, and two seasons of Beg, Borrow & Deal and The Mole.
• Real Lives of Celebrities: four seasons of The Osbournes, two seasons of The Anna Nicole Show, The Ashlee Simpson Show and Kathy Griffin: My Life on the D-List, and one season of Being Bobby Brown, Britney and Kevin: Chaotic, Newlyweds: Nick & Jessica and Tommy Lee Goes To College.
• Dating Show: seven seasons of The Bachelor, four seasons of Average Joe and For Love Or Money, three seasons of The Bachelorette, and two seasons of Joe Millionaire and Cupid.

About the Author:

Camilo Echavarria is of counsel in DWT’s Los Angeles office. Camilo recently joined DWT after being in-house litigation counsel at NBC Universal. He represents media clients and other companies in entertainment and employment law matters. He can be reached at (213) 633-6854 or camiloechavarria@dwt.com.

This First Amendment Law Letter is a publication of the law firm of Davis Wright Tremaine LLP and is prepared by the Media Group in its Communications, Media and Information Technologies Department, Kelli L. Sager, Chair, Bruce E.H. Johnson and Robert D. Balin, Vice Chairs, Rochelle Wilcox, editor and Amber Husbands, associate editor.

Our purpose in publishing this law letter is to inform our clients and friends of recent First Amendment and communications law developments. It is not intended, nor should it be used, as a substitute for specific legal advice since legal counsel may be given only in response to inquiries regarding particular factual situations.

Copyright © 2007, Davis Wright Tremaine LLP.

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