CITE:  49 F. Supp. 116
CMON:  March 1943
PLAIN: Plus Promotions, Inc., et al.
DEFND: RCA Manufacturing Company, Inc.
COURT: District Court, S.D. New York
DATE:  March 5, 1943

Action by Plus Promotions, Inc., and another against RCA Manufacturing
Company, Inc., for breach of a contract.

  Business plan for selling music, if novel and concrete, is a protectable

JUDGE: RIFKIND, District Judge


The first cause of action fails to state a claim upon which relief can be
granted.  The promise alleged is too indefinite for enforcement.  It is not
quite clear whether, as plaintiff contends, the complaint alleges a promise by
defendant to appoint plaintiffs its agents and exclusive licensees or whether,
as defendant contends, it alleges a promise to sell musical records to
plaintiffs "for resale" to their customers.  If the former is intended, the
promise lacks a provision for compensation.  If the latter is intended, no
price is specified.  A promise so uncertain cannot afford a basis for the
recovery of damages for its breach.  Williston on Contracts, Revised
Edition, Vol. 1, pp. 131-141.

In the second cause of action plaintiffs allege that, at the request of
the defendant, they disclosed a plan, in detailed and concrete form, for
increasing the sale of musical records manufactured by defendant; that the
plan was conceived by plaintiffs and was novel; that they disclosed the plan
to defendant after offering to do so "upon condition that the defendant
granted to the plaintiffs the exclusive right to sell and distribute all
of its aforesaid recordings of classical music made in accordance with
plaintiffs' plan  *  *  *  to enable the plaintiffs to carry on their
business of promoting, stimulating and increasing newspaper circulation
throughout the United States"; that without plaintiffs' consent defendant
appropriated the substance of the plan; that the reasonable value of the
plan is $150,000, for which plaintiffs demand judgment.

The theory of the second cause of action is that defendant is answerable for
its implied promise to pay plaintiffs the reasonable value of the plan which
it has appropriated. Such an action will lie, under the law of New York, if
the idea is novel and is divulged in concrete form under circumstances
indicating that compensation is expected if the idea is used. American Mint
Corp. v. Ex-Lax, Inc., 1941, 263 App.Div. 89, 31 N.Y.S.2d 708; Cole v. Lord,
1941, 262 App.Div. 116, 28 N.Y.S.2d 404; Williamson v. New York Central
Railroad Co., 1939, 258 App.Div. 226, 16 N.Y.S.2d 217.

The mere allegation of novelty and concreteness is not sufficient to
preserve a complaint if the idea described manifestly lacks those
attributes.  Larkin v. Penn. Railroad Co., 1925, 125 Misc. 238, 210 N.Y.S.
374, affirmed 216 App.Div. 832, 215 N.Y.S. 875; Lueddecke v. Chevrolet
Motor Co., 8 Cir., 1934, 70 F.2d 345.

The statement of the general principle does not solve the problem posed by
the complaint here challenged.  It only opens the inquiry: What standards
determine whether an idea is novel, whether its form is concrete? Since these
are matters of degree it is not to be expected that the authorities would
afford a very precise measure.  However, by charting a few of the most
relevant precedents, we can more readily determine whether the complaint
herein falls within or without the area of protection for the originators
of business ideas.

In Moore v. Ford Motor Co., 2 Cir., 1930, 43 F.2d 685, 686, the court went
no further than to state, "We may assume, without the necessity of decision,
that the originator of a novel method of merchandising acquires a right akin
to that recognized in the law in respect to a trade secret".  It affirmed
the judgment below, dismissing the complaint, by accepting a finding of
fact that defendant had not obtained the idea from the plaintiff.

In Booth v. Stutz Motor Car Co., 7 Cir., 1932, 56 F.2d 962, the court held,
according to the headnote, that "one whose plans, communicated confidentially
to automobile manufacturer, entered into design of new car [was] entitled
to accounting of damages and profits to extent that novel features of such
plans contributed to car's success and designer was harmed".

In Cole v. Lord, Inc., 1941, 262 App.Div. 116, 28 N.Y.S.2d 404, 409, the
court reversed a judgment dismissing the complaint and held, inter alia, that
plaintiff was entitled to go to the jury on the theory of implied contract
where the evidence showed that he had delivered a formula for a radio program
under circumstances requiring good faith on the part of the defendant.
"If it was used, he had a right to its reasonable value as determined by
the jury".

In American Mint Corp. v. Ex-Lax, Inc., 1941, 263 App.Div. 89, 31 N.Y.S.2d
708, it was held that a cause of action was stated in the complaint which
alleged that the plaintiff, at the request of the defendant, gave it advice
and ideas with respect to the manufacture and marketing of a candied tablet
and that the defendant used such advice and ideas, which were of a specified
value, notwithstanding the failure to plead an express contract for

In Larkin v. Pennsylvania R.R. Co., 1925, 125 Misc. 238, 210 N.Y.S. 374,
affirmed 216 App.Div. 832, 215 N.Y.S. 875, the complaint was dismissed on
a motion for judgment on the pleadings.  There the court found from the
bill of particulars the absence of any appropriation by the defendant.

In Alberts v. Remington Rand, Inc., 1940, 175 Misc. 486, 23 N.Y.S.2d 951, a
motion by defendant for judgment on the pleadings was granted on the court's
view that the idea alleged to have been appropriated had not been reduced
to concrete form.

In Lueddecke v. Chevrolet Motor Co., 8 Cir., 1934, 70 F.2d 345, the court
held that a demurrer to the complaint was properly sustained where the court
was not persuaded that the idea was novel and where it found that the
pleadings and correspondence failed to disclose circumstances from which
a promise to compensate could be implied.

A case very much like the one at bar is Williamson v. N.Y.C.R.R. Co., 1939,
258 App.Div. 226, 16 N.Y.S.2d 217, decided by the Second Department.  There
the court reversed an order denying defendant's motion for summary judgment
where it appeared that plaintiff wrote a letter to the defendant describing
in detail a plan for the production of a miniature railroad exhibit at the
New York World's Fair.  The letter was acknowledged and thereafter the
defendant held such an exhibit which seemed to follow the suggestions of
the plaintiff.  The plaintiff sued for compensation for the use of his idea.
The court held there was no express contract and none implied in law.
The idea being abstract and not having taken on concrete form it was
unnecessary, said the court, to consider whether it was novel.

This case was cited with approval by the First Department in Stone v. Liggett
& Myers Tobacco Co., 1940, 260 App.Div. 450, 23 N.Y.S.2d 210. In the latter
case the court likewise reversed an order denying a motion to strike out
a complaint seeking damages for appropriating an idea suggested in an
advertising script.  The ground assigned by the court was that the idea had
not been reduced to concrete form.  None of the New York cases challenges the
authority of Bristol v. Equitable Life Assurance Society, 1892, 132 N.Y. 264,
30 N.E. 506, 28 Am.St.Rep. 568. It held demurrable a complaint which alleged
that plaintiff had confidentially disclosed to defendant a system of selling
insurance which defendant adopted and thereby obtained a large amount of
business.  The court thus summarized its view in a hypothetical case: "A
wishes to sell his house and lot.  B tells him in confidence that C desires
to buy it, and B solicits employment to negotiate the sale.  A declines, but,
acting upon B's communication meets C, and himself negotiates and closes
the contract of sale.  B has no cause of action against A.  He had
information which he hoped to market, but he parted with it without finding
any market".  132 N.Y. at page 268, 30 N.E. at page 507, 28 Am.St.Rep. 568.

In the case at bar, the substance of plaintiffs' plan is described in an
exhibit annexed to the complaint.  The bill of particulars, however, makes
it clear that that exhibit was never actually delivered to defendant.  The
plan was in substance disclosed orally.  As described in the exhibit the
plan suggested that defendant induce world famous artists to produce
recordings without royalty, "their compensation to be on the reasonable
value of their services", that the recordings be sold without the names of
the artists annexed to them, at "a price so low as to be able to be afforded
by persons of low and modest means".  Sale and distribution were to be
effected not by dealers but by newspapers "as a cultural and civic service".

Such an idea, it seems to me, has no more concreteness than was present in
the Williamson case or in the Stone case.

The claim asserted in the second cause of action falls within the rule, as
defined by the New York courts, that in the absence of an express contract,
"owing to the difficulties of enforcing such rights, the courts have uniformly
refused to assume to protect property and ideas that have not been reduced
to a concrete form".  Stone v. Liggett & Myers Tobacco Co., supra.

Indeed, the facts fall squarely into the pattern of the hypothetical case
suggested in Bristol v. Equitable Life Assurance Society, supra. Defendant
wishes to sell its records.  Plaintiffs tell it in confidence that newspapers
would buy the records if the price were substantially reduced by eliminating
royalties and they solicit employment as defendant's agents to negotiate the
sales.  Defendant declines, but acting on plaintiffs' communication itself
arranges the sales.  For such conduct plaintiffs are without remedy.

The complaint is dismissed.  Leave to amend is granted.  Submit order.