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Northern District Holds No Cause of Action Exists for Misappropriation of “Ideas”

In Motion to Dismiss, Preliminary Injunction on August 28, 2010 at 6:30 am
Luminous Idea
Image by Tiago Daniel via Flickr

The Northern District held that no cause of action exists for “misappropriation of business ideas”.  Interserve, Inc. v. Fusion Garage PTE. Ltd., No. C 09-5812 RS (PVT), 2010 WL 3339520 (N.D. Cal. Aug. 24, 2010) (slip op.).

Plaintiff Interserve, Inc. and Fusion Garage collaborated in an attempt to bring to market a tablet computer, which they intended to call the “CrunchPad.”  Id. *1.  Shortly before the parties had planned to announce that the product would soon be released, defendant Fusion Garage advised plaintiffs that it would proceed on its own, and market a tablet computer under the name “joojoo” instead. Id. Plaintiffs brought suit, alleging that they are co-owners of the joojoo.  Id. They sought a preliminary injunction requiring defendant to sequester all proceeds it obtains from selling the product. Id. Defendant opposed the motion for preliminary injunction, and moved to dismiss the complaint, including a claim for misappropriation of “business ideas”. Id.

The court held that while in the “context of a breach of fiduciary duty claim by a partner or joint venturer, misappropriation of a business opportunity belonging to the parties collectively is actionable”, as a “stand-alone claim, however, misappropriation of business ideas is not.” Id. *8.  Citing Desny v. Wilder, 46 Cal.2d 715 (1956), the court held that “ideas are not independently protectable.”  The court wrote:

Generally speaking, ideas are as free as the air and as speech and the senses …. it is clear that California does not now accord individual property type protection to abstract ideas …. Neither common law nor statutory copyright extends protection to an idea as such.

Id.

The court dismissed without leave to amend TechCrunch’s tort claim for misappropriation of business “ideas”.

Judge

District Judge Richard Seeborg.

By CHARLES H. JUNG

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