LANDSBERG v. SCRABBLE CROSSWORD GAME PLAYERS, INC.
802 F.2d 1193 (9th Cir. 1986)
GOODWIN, CURCUIT JUDGE.
Plaintiff Mark Landsberg wrote a book on strategy for winning at the Scrabble board game. He contacted defendant Selchow & Righter Co. (S & R), the owner of the Scrabble trademark, to request permission to use the mark. In response, S & R requested a copy of the manuscript, which Landsberg provided. After prolonged negotiations between them regarding the possible publication by S & R of the manuscript were broken off, S & R brought out its own Scrabble strategy book. Landsberg sued S & R, its subsidiary Scrabble Crossword Game Players, Inc., Crown Publishers, Inc., the publishers of S & R’s book, and several individual defendants in state court for copyright infringement and breach of contract. Defendants successfully removed under 28 U.S.C. ' 1441(a) (1982). After a bench trial, the district court found that: S & R’s book was based upon Landsberg’s manuscript; the two works were substantially similar; defendant S & R had copied both the ideas and the form of expression of Landsberg’s work; and that defendants had infringed Landsberg’s rights. Landsberg I, reversed the judgment for Landsberg on his copyright infringement claim because the S & R book lacked the degree of similarity required for infringement of a nonfiction work. Landsberg I, 736 F.2d at 489. We remanded for further proceedings on whether "circumstances and conduct manifesting the terms and existence of a contract precede[d] or attend[ed] disclosure of the idea." Id. Upon remand, the district court held a status conference and the parties submitted additional briefs. The court then made supplemental findings of fact and conclusions of law and entered judgment for plaintiff on his contract claim. Defendants now appeal from this judgment. We affirm.
Defendants’ principal argument on appeal is that the idea which is the subject of the alleged implied-in-fact contract is that of a book about Scrabble strategy, and that the idea was disclosed in Landsberg’s first letter to S & R. This argument treats the trial testimony regarding the distinction between ideas and their expression, which was central to the copyright claim, as determinative of the subject of the implied contract. The contract claim turns not upon the existence of a protectible property interest, however, but upon the implied promise to pay the reasonable value of the material disclosed. See Donahue v. Ziv Television Program, Inc., 54 Cal.Rptr. 130, 140 (1996). At issue is thus whether an implied contact was made, and whether defendants’ use of the manuscript violated its terms. Landsberg’s proprietary interest in the form of expression is irrelevant.
California law allows for recovery for the breach of an implied-in-fact contract when the recipient of a valuable idea accepts the information knowing that compensation is expected, and subsequently uses the idea without paying for it. Densy v. Wilder, 299 P.2d 257, 267 (Cal. 1956). If disclosure occurs before it is known that compensation is a condition of its use, however, no contract will be implied. Id. at 739, 299 P.2d 270. Thus, if Landsberg unconditionally disclosed his manuscript before informing S & R that he expected compensation for its uses, his contract claim fails under California law.
In its supplemental findings, the district court found that Landsberg’s initial disclosure of his manuscript was confidential and for the limited purpose of obtaining approval for the use of the Scrabble mark, and that given his expressed intention to exploit his manuscript commercial, defendants’ use of any portion of it was conditioned on payment. It found, further, that the negotiations for the use of the manuscript by defendants show that Landsberg’s belief that they would not use his manuscript without paying him for it was reasonable.
Defendants cite nothing in the record to suggest that these findings are incorrect. Instead, they rely upon their theory that the idea was simply that of a Scrabble strategy book, and that plaintiff blurted out that idea. This argument does not establish that the trial court was wrong. Landsberg disclosed the contents of his manuscript for a limited purpose that was made known to defendants. Defendants negotiated with him only long enough to produce a book based on his work without compensating him for his efforts. The district court’s supplemental findings were not clearly erroneous.
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PROBLEMS
If a corporation requires anyone submitting an idea for consideration to accept in writing the following eight conditions is it adequately protected against additional liability? Are all the conditions necessary?
1. An idea must be submitted by its originator or his or her duly appointed attorney or agent.
2. An idea will be considered only on the understanding that its submission and the submission of any related material is not in confidence. No confidential or other unusual relationship may be established by or implied from the submission or our consideration of the idea or related material.
3. The corporation cannot and does not agree that the idea or any related material submitted will be kept a secret.
4. The corporation will give an idea only such consideration as it believes the idea merits, and no obligation is assumed other than to notify the submitter as to whether or not the company is interested in negotiating further for rights to the idea.
5. Receipt, or consideration of, or subsequent negotiation or offer with respect to any idea will be without prejudice to us. This includes, without limitation, our rights to contest the validity of any existing or future patent on the idea. Furthermore, and also without limitation, receipt or consideration of, or negotiation or offer on an idea, shall not be deemed an admission of the novelty or patentability of the idea, or of priority or originality on the part of the submitter or any other person.
6. We cannot consider any idea on condition that we shall return any material submitted.
7. If your idea is patented, and of interest to us, negotiations may be entered into. In the event that no agreement is concluded the submitter shall rely solely upon such rights as he may have under United States Patent Laws.
8. Where your idea is not patented, in the event the idea proves new, and the corporation uses it, the company agrees to pay and you agree to accept the sum of One Thousand Dollars ($1,000.00) for all rights to such idea. However, if any such unpatented idea shall later be covered by a patent, the foregoing provisions of this paragraph shall not apply to any rights under the patent, and the submitter shall thereafter rely solely upon such rights as he may have under United States Patent Laws.
See Sylvania Electric Prods., Inc. v. Brainerd, 166 U.S.P.Q. 387 (D.C.Mass. 1970).