Tuesday, May 20, 2014

Nadel v. Play-By-Play Toys & Novelties, Inc. case brief summary

Nadel v. Play-By-Play Toys & Novelties, Inc. case brief summary

RULE: A showing of genuine novelty or invention may sustain claims for breach of contract, quasi-contract, and unfair competition.

Property Claim (Misappropriation):
Idea submitters rarely succeed on a property theory. To be protected, an idea must be both 1) novel and 2) concrete. Necessary to show novelty generally.

Trade custom can create property rights in ideas. Because Nadel was a professional toy designer, custom in that industry governs property rights.

Contract Claim: Only necessary to show novelty to the buyer. Disclosure of an idea can be bargained-for consideration.

Novelty FACTORS: 1) specificity, 2) commonality, 3) uniqueness, 4) commercial availability.


Nadel v. Play-by-Play Toys (2d Cir.) 2000; 49 (F: P toy-idea guy alleges D stole his idea to have a sound-emitting, spinning plush toy; parties entered into pre-disclosure confidentiality agreement but no post-disclosure contract for payment based on use – P sues on contract and property theories)
1) novelty-to-the-buyer standard for contract claim:an idea may be unoriginal or non-novel in general sense but still have substantial value to a particular buyer who is unaware of it and therefore willing to enter into a contract to acquire it) (genuine issue of fact exists b/c novel (spinning plush toy) and concrete (he had prototype) and industry custom (D kept P’s prototype monkey toy for several months – despite trade custom to compensate for ideas or return if not used)
2) BUT in misappropriation claims, idea must be novel in absolute terms because property law doesn’t protect against theft of something free and available to all (otherwise Ps could recover against any parties, even those with whom they had not dealt, simply by showing that it was his idea – even if parties hadn’t “taken” his idea).
NB: trade custom can create property rights in ideas and permit recovery on contract claim. See Cole (1941) (trade custom in radio industry is that one has rights to ideas in a formula for a radio program as opposed to rights to particular scripts)

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