You have a great idea for something at work—something that would save the company a lot of money. You bring it to the head of the company who loves the idea and implements it. But, the company refuses to compensate you for it. Or, you have an idea for an advertising slogan for a certain department store. You submit it to the department store and it begins using that slogan. You had anticipated that you would be compensated for the idea, but the department store refuses. These types of situations fall under an accumulation of cases regarding the “law of undeveloped ideas.”
The law of undeveloped ideas is essentially an intellectual property doctrine. But, copyright law does not protect ideas because copyright law exists to protect the expression of the ideas only, not the ideas themselves. Brown v. Armstrong, 957 F. Supp. 1293, 1306 (D. Mass. 1997). Ideas are also not patentable unless they are inventive concepts and after an idea has met rigorous standards prior to protection. Some states, including Minnesota, require the idea to be novel and concrete to be protectable.
Even with the limitations on the protection of ideas, some case law has found recovery pursuant to the law of undeveloped ideas based on express contract theory, the implied-in-law contract (quasi contract), and the property theory.
Express Contract Theory
A contract between parties that authorizes payment for an idea have been enforced. However, a law for an undeveloped idea must satisfy traditional contract elements, such as the element of consideration. Take for instance the case of Masline v. New York, New Haven and Hartford Railroad Co., 95 Conn. 702, 112 A. 639 (1920). In that case, an employee for the railroad told his employer he had an idea that could potentially make the railroad a lot of money. The railroad countered and said that if the employee told the railroad his idea, he would be compensated for it in the form of a percentage of the profits. The employee told the railroad that it should advertise on its railway cars and in other areas around the platform. The railroad implemented this policy and made a lot of money, but refused to compensate the employee for the idea. The court found that the company was not liable to pay the employee due to the lack of consideration for the contract because plaintiff’s idea was not novel and therefore was valueless as consideration.
In Minnesota, to show the breach of an express contract plaintiff must provide evidence of either the existence of an agreement or an unjust enrichment that resulted from some wrongdoing. Holman v. CPT Corp., 457 N.W.2d 740 (Minn. Ct. App. 1990).
Implied Contract Theory/Quasi-Contract/Unjust Enrichment
In contrast to an express contract, an “implied” contract is not based upon the parties’ intentions, but rather a court’s determination that one person was unjustly enriched at the expense of another and therefore, an obligation arises to make that person whole. Most jurisdictions, Minnesota included, hold that an idea must be novel for a defendant to be able to be unjustly enriched with the knowledge of the idea.
Some jurisdictions have held that a novel is personal property and therefore can recover for the taking or unauthorized use of that property. Minnesota has held that “abstract ideas are not protectable property interests…[i]n order for an abstract idea to be the subject of an express or implied contract to be otherwise protected by the law, it must be novel and concrete.” Tate v. Scanlan Intern., Inc., 403 N.W.2d 666, 671 (Minn. Ct. App. 1987). An original idea is a novel idea and is something that is not already known or in use. Id. at 671. A concrete idea “pertains to the requisite development stage of the idea what is presented [and] an idea is a protectable property interests, if it is sufficiently developed to be ready for immediate use without additional embellishment.” Id. at 672.