Intellectual Property and the Law of Ideas

Kurt Saunders

• Publisher: Routledge
• Year: 2021
• ISBN:
  9780429664939
• Edition: 1
• Topic: Derecho
• Subtopic: Teoría y práctica del derecho

Ideas are the fuel of industry and the entertainment business. Likewise, manufacturers receive suggestions for new products or improvements to existing products, and retailers frequently receive ideas for new marketing campaigns. Many ideas are not new and may be used by anyone without the risk of incurring any legal liability, but some ideas are novel and valuable. If the originator of a potentially useful idea does not have the financial resources to exploit the idea, he or she may submit it to another, with the expectation of receiving compensation if the idea is used. Although an extensive body of intellectual property law exists to protect the rights of inventors, authors, and businesses that own valuable brands or confidential proprietary information, raw ideas receive no protection. Nevertheless, the originator of a potentially useful and marketable idea is not without legal recourse. The courts have developed, through a long line of common law precedents, legal protection for novel and concrete ideas under certain circumstances. The originator of an idea can rely on contract law, whereby the recipient may expressly or impliedly agree to pay for the idea. Alternatively, if the idea is disclosed in confidence, its unauthorized use by the recipient allows the originator of the idea to recover compensation. Finally, some courts have treated the ownership of ideas as quasi-property rights.

1Introduction to the law of ideas

Valuable ideas take many directions – ideas for new or improved products, marketing strategies, advertising slogans, manufacturing processes, television show formats and movie plots, to name a few. A valuable idea can be the source of a new revenue stream or it can be the entrepreneurial spark for a new business venture. The idea might emerge from a sudden flash of genius, or it might be the product of considered research and reflection. The source of an idea may be internal, like those from employees, or external, such as those from an interested customer or an inspired inventor or creator.

What is an idea? Is an idea a “thing,” or merely the design or premonition of a thing? The dictionary tells us that an “idea” means a formulated thought, a conception. Indeed, the word “idea” is derived from the Greek term “idein,” which means a form or pattern.¹ Ideas, as it has been famously said, are as free as the air.² The proposition that ideas cannot be owned, and that they dwell only in the public domain, was most prominently advocated by Thomas Jefferson, who wrote:

If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation.³

Jefferson’s statement is often used to argue that ideas are nonrivalrous because they are intangible. Unlike a pair of shoes or a car, which are rivalrous because they can only be worn or driven by one person at a time, ideas are nonrivalrous because one person’s use of an idea does not prevent others from using it as well at the same time. Perhaps ideas, like information, want to be free?⁴ If ideas are truly the building blocks of invention and creative expression, perhaps it is best to consign ideas to the public domain so as not to increase the cost to others and inhibit further inventive and creative activity? On the other hand, those who generate potentially valuable ideas quite rightly will ask: if there is no reward for ideas, why bother creating or disclosing them? In other words, as John Perry Barlow once asked, “[h]ow are we going to get paid for the work we do with our minds?”⁵

A related problem is assessing the value of an idea. Transactions in ideas – and much of the law of ideas itself – are concerned with addressing “Arrow’s Information Paradox,” as named for Nobel Prize economist Kenneth Arrow. He posited that a potential purchaser of valuable information wants to know it in sufficient detail so as to be able to determine its value before deciding whether to purchase it or not. However, once the potential purchaser has acquired this detailed information, the provider of the information has effectively given it away for free.⁶ The paradox is that the purchaser cannot assess the value of the information until it has been disclosed, but after it has been disclosed, there is no reason to pay for it. Providers of information, as a result, will have no incentive to disclose it.

Arrow’s Paradox applies to ideas in that interested parties cannot efficiently purchase or sell an idea without valuing it. However, the prospective purchaser cannot value an idea without the seller first disclosing it. The paradox can be resolved by means of intellectual property protection, which offers legal protection to certain types of information before they are disclosed. In fact, the paradox serves as one of the core rationales for patent protection.⁷ The problem with ideas themselves is that an idea, without something more, does not qualify for intellectual property protection. Without something more, an idea is neither patentable nor copyrightable.

Assuming that the idea is valuable but does not qualify for protection as intellectual property, how then to protect it from being stolen if it is revealed? The story of how Mark Zuckerberg allegedly misappropriated the idea for Facebook from his college roommates provides a cautionary tale.⁸ One solution is to bring it to market as fast as possible, or at least faster than one’s competitors might. However, what if the idea originator lacks the capital or resources to develop the idea? Many highly creative and inventive individuals lack the ability or financial resources to convert their ideas into functional and practical form.

The next best solution may be to sell the idea to one who can make use of it. What can go wrong with that? The court dockets are replete with cases telling stories with unhappy endings:

An expert in children’s development and emotional intelligence conceived of an idea for a television series featuring five characters that are color-coded anthropomorphic emotions called the “Moodsters,” accompanied by a line of toys and books about the characters. After sharing the idea with Disney with no response, Disney began development of its movie Inside Out, which centered on five anthropomorphized emotions that live inside the mind of an 11-year-old girl named Riley.⁹

An entrepreneur believed that he had an ingenious idea for a new social media sensation – an app that would allow professional basketball fans to make predictions about National Basketball Association games and to win prizes for correct predictions. He pitched the idea to the NBA’s head of emerging technology, but was politely told that the NBA was not interested. Years later, he discovered that the NBA had released a new app called “Pick 3” allowing fans to predict players, points, and a winning score.¹⁰

Pursuant to a mutual nondisclosure agreement with a manufacturer, a consumer product designer developed a concept and prototype of a portable clothes dryer and provided it to the manufacturer. After negotiations with the manufacturer failed to lea...

Table of contents

• Cover
• Half Title
• Series Page
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• Preface
• Chapter 1: Introduction to the law of ideas
• Chapter 2: Legal theories of idea protection
• Chapter 3: Intellectual property protection and preemption
• Chapter 4: Requirements for idea protection
• Chapter 5: Scope of liability for idea theft
• Chapter 6: Comparative approaches to idea protection
• Chapter 7: Practical aspects of idea submissions
• Selected bibliography on the law of ideas
• Index