Implied Contract "Idea Theft" Cases in the Ninth Circuit

In the Ninth Circuit's 2004 ruling in Grosso v. Miramax Film Corp., 383 F.3d 965 (2004), the court held that a complaint alleging the theft of the idea for the movie "Rounders" did not state a copyright claim, but did state a California state law claim for breach of implied contract. According to an article by Amanda Bronstad in today's San Francisco Recorder (click here (subscription required)), the Grosso decision has spurred renewed interest by plaintiffs in "idea theft" cases.

In the Grosso decision, the Ninth Circuit held that the implied contract claim was not preempted by copyright law because it included the "extra element" of a bilateral expectation that the receiving party would compensate the other party for the reasonable value of the idea.

As discussed in the Bronstad article, idea theft cases can be expensive and difficult to defend because they involve conflicting factual accounts of what was said and expected. According to the article, studios now seek to avoid these problems by requiring people who pitch ideas to sign releases before the pitch so that there is a clear understanding of whether compensation for the idea is required.