Scottish American Media, LLC, et al. v. NBC Universal, Inc., et al. (not for publication)

In idea misappropriation case, appeals court affirms summary judgment for defendants because they established independent creation of ideas for televised song competition and plaintiffs failed to provide any evidence calling into question defendants' evidence supporting independent creation

Plaintiffs developed an idea for a televised song competition called Battle of the States in which musical groups from all 50 states would compete, the public would select the winner by a telephone vote, and the winning state would host the finals the following year. (Plaintiffs are Scottish American Media, LLC and its principal Maurice Fraser. Fraser lived in Europe for several years and then moved to Southern California.) Plaintiffs submitted their idea to producer Ben Silverman.

About the same time, Silverman was considering obtaining the rights to Eurovision, a televised song competition popular in Europe for the last 50 years. Although Silverman expressed some interest in plaintiffs’ idea, he eventually licensed the rights to Eurovision, assembled a team to develop the show, and sold it to NBC with the title American Anthem.

When plaintiffs learned that NBC planned on broadcasting American Anthem, they filed suit against NBC and Silverman’s production company Reveille for breach of implied contract, breach of confidence, intentional interference with contractual relations, intentional interference with prospective economic advantage, fraud and conspiracy to defraud.

In California, a cause of action for breach of implied contract may exist where a plaintiff has conveyed an idea to a defendant with the expectation that the defendant will pay the plaintiff for the idea if he uses it, and he uses the idea but fails to compensate the plaintiff for its use. According to the court, the idea need not be novel, or one which the defendant could not have come up with on his own, to be protected. Thus, plaintiff’s ideas could be the subject of a breach of implied contract cause of action if defendants used them without compensating plaintiff. In addition, where a plaintiff conveys an idea to a defendant, and defendant produces a product similar to plaintiff’s idea, an inference arises that defendant used plaintiff’s idea, and the inference may be dispelled by evidence of independent creation of defendant’s product. See Hollywood Screentest of America, Inc. v. NBC Universal, Inc., 151 Cal.App.4th 631 (Cal. App. 4th 2007).

The trial court granted summary judgment to defendants based on their independent creation of American Anthem, and the appeals court affirmed. Relying heavily on the “eerily similar” decision Hollywood Screentest which involved the NBC show Next Action Star, the appeals court held that defendants established independent creation by providing evidence showing that they obtained the U.S. rights to Eurovision and put together a team which developed the idea without using plaintiffs’ materials. Pursuant to Hollywood Screentest, the plaintiffs now had the burden of calling into question defendants’ evidence of independent creation. The appeals court held that plaintiffs’ assertions of similarity between the two shows was not sufficient to call into question defendants’ evidence of independent creation. The court inferred that plaintiffs adopted some elements from Eurovision for its Battle of the States, and the court held that some of the similarities were generalized themes such as a reality show featuring musical competitions, judging by celebrity judges, and public voting by telephone. “That both plaintiffs’ and defendants’ shows feature these elements does not support a conclusion that defendants used plaintiffs’ ideas.”

The court then turned to plaintiffs’ claim of breach of confidence. In California, a cause of action for breach of confidence exists where plaintiff offers an idea to defendant in confidence, with the understanding that it is not to be disclosed to others or used without plaintiff’s permission, and defendant discloses or uses the idea, damaging plaintiff.

Plaintiffs argued that defendants breached their confidence when they disclosed his ideas in their press release announcing plans to develop American Anthem. But the court held that defendants did not disclose plaintiffs’ ideas. “They disclosed their own, independently created, ideas [and] plaintiffs presented no evidence to the contrary.” The court affirmed summary judgment on this issue as well.

Regarding plaintiffs’ fraud claim, which was based on a statement by Reveille’s Chris Grant to plaintiffs that Reveille was not proceeding with Battle of the States, plaintiffs asserted that at the time Grant made the statement, it was false, because Reveille was still considering using plaintiffs’ ideas, and plaintiffs relied on the representation by failing to insist on participating in the development of the show and therefore were prevented from earning a percentage of the development fee for the show. The court rejected this argument and held that defendants did not incorporate plaintiffs’ ideas into their show. “Plaintiffs therefore were not damaged by the loss of a development fee. Absent damage, plaintiffs have no cause of action for fraud, and the trial court did not err in summarily adjudicating that cause of action.”