Intellectual property counsel Monte Cooper and managing associate Lillian Mao co-authored an article on the California Court of Appeals’ recent ruling in Altavion Inc. v. Konica Minolta Systems Laboratory Inc., in which the court held that ideas can be protectable as trade secrets. An excerpt from the article is included below.
A few important lessons can be gleaned from Altavion. First of all, the case underscores that, at least in California, ideas can be valuable intellectual property when properly protected. This concept has long been recognized to exist in the entertainment industry via so-called “Desney claims” (named after the seminal 1956 California Supreme Court opinion in Desny v. Wilder), in which writers who pitch concepts to studios have been able to later assert claims for breach of an implied-in-fact contract when the studios have allegedly, without compensation to the writers, taken the ideas and made them into movies or other entertainment works.
Altavion further extends this notion of protecting valuable ideas into the separate realm of trade secrets, which is subject to different legal requirements and a different statutory scheme. Indeed, the opinion highlights the importance that, given the state of trade secret law, inventors take care to protect their ideas when engaged in commercial negotiations by employing nondisclosure agreements and similar mechanisms aimed at maintaining confidentiality. Altavion admonishes inventors to take such precautions, or risk losing the right to exploit their ideas at all.