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Intellectual Property
Rutgers University, Newark School of Law
Kettle, John R.

Intellectual Property


Summer 2012

Overall of IP

Idea protection – state law only

Trade secrete – prior to the Economic Espoinage Act, only state laws

Right of publicity – state law and federal trademark law???

Copyright – Most Federal – preempt most subject matter state law

Trademark law – common law, state law, federal law, but federal law does not preempt state law

Paten law – federal only

Uniform Trade Secrete Act

– 1979 published, 1985 amended

– Provide legal framework for improved trade secrete to be a model for state’s trade secrete statutes

– As of 2/2012, 46 states adopted

o Except : D.C., U.S. Virgin Islands,MA, NY, N. California, Texas

Idea protection


– State common law only

1. Misappropriation

2. Breach of contract

Misappropriation of an idea

– The idea has to be novel.General novelty (NJ, and 3rd Circuit)

1. Recipient novelty (NY)

– The idea is in a Concrete form

1. It needs to be reduced to writing or a tangible form

2. It has been a fully developed idea for immediate use with little or no additional work on the user’s part

– Defendant makes use of it

– The plaintiff has an expectation of Payment

Idea Protection Recovery Theories

– Contract

– Express Contract

1. Best way to protect an idea

– Implied K

1. whether a contract was intended to be made even though it was not expressly stated. Factors:

a. whether the defendant has paid for such ideas in the past;

b. whether the plaintiff has customarily been paid for his ideas; and

c. whether there is an industry custom for paying for such ideas

– Quasi-k

1. The idea needs the strongest novelty so it could be a consideration to exchange

2. Claiming the defendant has unjust enrichment

– Breach of Confidentiality

1. Pf shows the df has a duty of confidentiality[1]

– Property conversion

1. Conversion (rare under this theory)

Nondisclosure Agreement

– An agreement generally indicates that the idea to be reveal is confidential and the idea holder intends to maximize and protect the economical and monetary value of the idea

– The recipient may reject to view the idea unless the idea holder sign the recipient’s own agreement that states the conditions under which the recipient will pay for the idea.

Defense to idea misappropriation

– Independent development of idea

1. Df shows he did not have any recourses to the pf’ idea

1. Segregate the unsolicited idea from the department developing the idea to show he could not have seen the idea

– Not novel

– Not concrete


– Copyright does not need novelty.


Sellers v. American Broadcasting Co.

· Idea protection case

· FN agreement

· So this case

o It is novel – an new hopy

o It is concrete

o But it is not df make use of it. —


Lueddecke v. Chevrolet Motor Co.

– This case recognized the novelty to the recipient

Nadel v. Play-By-Play Toys & Noveltes, Inc.

· Industrial customary practice

o Share idea is kept confidential

· Not Novel to the industry but it could be novel to the recipient

· Contract –

o Custom practice, jurisdiction recognizing the entitlement if the novelty to recipient (NY)

California Rule

– A company uses the idea submitted by a professional submitter on a services rendered basis, not requiring the submitter to prove all elements of misappropriation.

Unfair Competition

Board of Trade of City of Chicago v. Dow Jones & Co.

– This is a misappropriation case

1. Dow Jones – provide and license people to use its information generally.

2. Board sued to declare judgment that DJ has no property right so Bard could use it.

– The index is fact

1. Selection arranged coordination (SAC) could be protected, but the entire fact cannot be protected or copyrightable.

– Court affirmed that the index is valuable so that BTCC has to pay license fee

Hot News Exception

– International News Service v. Associated Press

– the news gatherer shall be protected from other’s use In a short period of time

– a quasi-property right in a short of period of time

– factors

1. Does a hot news claim have to take into account the free riding of the defendant,

2. the time sensitive value of the information, and

3. the threat to the very existence of the product or service provided by the plaintiff?

marketing plan, customer list

1. Process (E. I. DuPont deNemours & Co. v. Christopher)

2. marketing plan (PepsiCo, Inc. v. Redmond)

3. Negative know-how: Trade secret include know not to do (Metallurgical industries Inc., Fourtek, inc.)

Benefit of keep trade secrete

– No one else knows it

– Monopoly

– Potentially has no expiration date as long as it remains secrete

– Protect the subject matter which could not receive a patent


– Once become public, there is no way to prevent others to use it

– The only cause of action is to against the person disclose it under trespass, or breach of confidentiality

– Reverse engineering of trade secret is lawful

– Note: if you patent a trade secret, the patent will be published in 18 months after filing application (Most plant and utility patent applications filed on or after 11/29/2000)

Law source

– Common law

1. Misappropriation

2. Contract law

– State statute

1. Adopts Uniform trade Secrets Act part or all

2. Own statute

– Federal: Economic Espionage Act of 1996 ,18 USC § 1831

– Restatement (Third) of Unfair Competition (1993) § 757

State law protection of trade secrete

· To sue the perosn makes the wrong (it governs wrongful conduct, bu tnot technology)

Share trade secret

– By restriction – confidentiality/ nondisclosure agreement

– No unjust enrichment

o So even you did not sign anything, you cannot disclousre

Cause of Action for misappropriation of a trade secrete

– Plaintiff owns the trade secret

– Defendant has notice that the information was a trade secret and was wrongfully acquired

– There is wrongful or improper means, which fall below the generally ace[ted standards of commercial morality and reasonable conduct, or there is a unauthorized disclosure or use resulting in a breach of confidential.