Procedural Posture

Plaintiff appealed a judgment of the Superior Court of the City and County of San Francisco (California), which dismissed its claim seeking reasonable compensation for the use of an idea allegedly misappropriated by defendant.

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Overview

Plaintiff filed suit for defendant’s use of an advertising idea that plaintiff conceived. Defendant had entered a written agreement to reimburse plaintiff for the idea, but thereafter used the idea without reimbursement. The court ruled in defendant’s favor, concluding that the statute of limitations, Cal. Code Civ. Proc. § 339, presented a bar to the claims which were not submitted within the two year limitation period. Plaintiff appealed. Defendant plead not only that § 339 precluded relief, but also asserted that the ideas were not trade secrets and could not be afforded protection. The court reversed, finding that § 339 applied only to that portion of the agreement founded upon oral or implied consideration, but not to claims founded upon the written agreement. In addition, although the information was not a trade secret, the confidential manner of its disclosure obligated defendant not to appropriate it unless there was discovery by other means.

Outcome

The court reversed the dismissal of the action.