Should California’s Film Script Cases Be Merged into Trade Secret Law?

Abstract

In legal disputes where one party claims that it submitted an idea to another party and alleges that the latter used that idea without permission or compensation, two categories of California intellectual property law have increasingly come to resemble one another: (1) trade secret law, most often applied in business or technical contexts; and (2) idea submission law, primarily applied in cases involving film scripts and other media productions. Over the decades, these regimes have developed separately, within distinct business and legal cultures. But recent developments in California trade secret law have brought the two closer together; in some areas, they may even be approaching a unified body of law. This Article explores that possibility. It concludes that although a partial merger is inevitable, the two core causes of action—for asserted trade secrets, a misappropriation claim; for idea submissions, a so-called Desny claim for breach of implied-in-fact contract—will and should remain distinct. A partial merger, however, would lead to beneficial exchanges in areas where their doctrines already overlap: (1) idea submission’s “independent development” and trade secret’s “independent derivation” defenses; and (2) statutory preemption under California’s Uniform Trade Secrets Act (CUTSA).

California’s idea submission cases have developed sophisticated and robust means to adjudicate the concept of “independent development”—that is, a defendant’s assertion that despite receiving the plaintiff’s idea, it nonetheless came up with the disputed film, television show, or other concept on its own. By contrast, the important and analogous defense of “independent derivation” in California trade secret law remains underdeveloped. This Article argues that the idea submission cases offer a far more rigorous analysis of the defense and could inform similar decisions under trade secret law. In particular, it proposes a methodology that courts can use to adjudicate the independent derivation defense, inspired by the idea submission cases.

The idea submission cases largely survived copyright preemption challenges in the 1990s and 2000s after Ninth Circuit rulings preserved the viability of some idea submission causes of action under state law. But surviving copyright preemption is not the same thing as surviving CUTSA trade secret preemption. This more recent form of IP preemption is broad, and it subsumes tort claims seeking to protect information said to be confidential. This Article argues that the CUTSA preempts peripheral idea submission tort claims such as breach of confidence, but it does not preempt the core claim at the heart of California’s idea submission regime—the Desny claim for breach of implied-in-fact contract.

The proposed partial merger recognizes the public policy ends of each regime: protecting weaker parties who submit ideas to film and media studios (in narrowlydefined circumstances), and ensuring that litigants cannot use tort claims to subvert the protections the CUTSA and related employee mobility rules provide for the free use of publicly available information that does not meet the statutory definition of a trade secret.