Legal: Protecting Against Idea Misappropriation Claims

Ideas are cheap. But thoughts can also help an ecommerce company enhance its services and products. Frequently a merchant’s customers or partners are in the best position to offer such ideas. Implementing unsolicited ideas, however, can pose legal issues surrounding ownership of this idea. Merchants can protect themselves by taking basic precautions, which I will address in this report.

Ideas for Products and Services

Let us begin by first defining the kinds of ideas you need to be concerned about. An ecommerce merchant may receive ideas from partners or clients about its own offers or products. By way of instance, a shopper might have a feature request or proposal for a software-as-a-service item. Or a provider may recommend a merchant run a specific kind of email offer. These kinds of unsolicited ideas can cause difficulties.

By definition, an idea isn’t copyrightable or protectable by signature, and oftentimes an idea might not be patentable or subject to trade-secret rights. Even if an idea isn’t protected by traditional intellectual property law, however, some countries have established a claim for”idea misappropriation,” that is an implied or quasi-contract claim that finds the existence of a legal relationship between the parties even where it might not be clear that they planned one to exist.

Taco Bell’s Chihuahua

Among the most famous instances of thought misappropriation involved the beloved Taco Bell Chihuahua. In Wrench LLC v. Taco Bell Corp. , Wrench alleged that Taco Bell had misappropriated its thought to feature a live Chihuahua with a feisty attitude in Taco Bell commercials. Wrench alleged that the ideas were inspired by its own Chihuahua personality”Psycho Chihuahua,” two Taco Bell workers had participated with Wrench to go over licensing the personality, which Taco Bell unilaterally started using a similar personality with no license.

Taco Bell’s marketing agency, however, claimed that it had independently established the notion when two of its workers, while eating Mexican food, watched a Chihuahua trotting down the road without a master or a leash.

Wrench filed suit.

In analyzing the claim, the court found that, though there was no written contract between the parties, there was an implied-in-fact contract since Taco Bell, throughout the negotiations to buy a permit to Psycho Chihuahua from Wrench, promised that it would pay Wrench a permit fee. When Taco Bell failed to pay, the court found an implied contract existed. At trial, Wrench has been awarded $30 million, and $12 million in interest, for a total of $42 million in damages.

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While this might be an extreme example, even smaller businesses can have to deal with an idea misappropriation lawsuit. My firm, as an instance, recently represented an insurance provider that faced such a claim as it failed to correctly reject an unsolicited idea, albeit an obvious one. When the company moved to the region which was covered by the thought, it had been sued by the person who thought it was his.

A Policy for Unsolicited Ideas

How can you protect against this? Adopt an unsolicited idea submission policy and clearly outline that coverage in your terms-of-use arrangement on your site. You could then rely upon the contractual power of the agreement as a defense to an idea entry case.

A excellent unsolicited idea submission policy will require the submitting party to agree that their submitted ideas become the property of the business upon submission, the ideas may be utilised in any way or form, and that the business might use the idea without payment. Through the force of contract, you can make certain you won’t need to run for the border.

Free legal counsel is worth as much as a bad idea. So be certain you talk with a lawyer for your particular situation.