Ideas are central to business but can be difficult to protect.
Entrepreneurs can be so giddy with excitement about their business concept that they share information freely. That can lead to improvement through brainstorming, but it can also lead to disputes over whether friends or others who act as sounding boards have any claim to profits earned from those ideas.
Facebook founder Mark Zuckerberg learned this the hard way when three former Harvard University colleagues accused him of stealing their idea, technology, design and business plan for a venture they called ConnectU. Zuckerberg settled out of court in 2008 for US$65 million (US$20 million plus 1.25 million shares).
This high a settlement is rare even though these kinds of disputes are not unusual, according to Fasken Martineau LLP partner David Wotherspoon.
“You want to have in writing who owns the intellectual property,” he said. “You also want to have in writing a shareholder agreement that sets out what happens when there’s a falling out.”
In September, Vancouver’s WordLogic Corp. (OTCBB:WLGC) claimed that search engine behemoth Google Corp. (Nasdaq:GOOG) had trotted out technology that was remarkably similar to its own product, which predicts search results before the web surfer stops typing.
WordLogic investor relations officer Oliver Evanshen told BIV at the time that his company had demonstrated its technology to Google.
“They appeared not to be interested and then, lo and behold, they come out with this new product,” he said.
Delta entrepreneur Errol Hula similarly believes a U.S. multinational stole his idea.
Hula sued NBC Universal earlier this year for stealing his idea for what has evolved into Hulu, the world’s second-most-popular video website behind YouTube.
Hula claims that he shared trade secrets and a business plan with an NBC executive in 2006. The following year, NBC Universal announced plans to team up with Rupert Murdoch’s News Corp. to create Hulu.
A California judge referred the case to arbitration in July.
Winning these cases is virtually impossible if there is little or no documentation to back a little guy’s claim that he shared concepts with a giant corporation.
Even when the parties are of similar stature, evidence of sharing information is vital.
David Wall learned this in 2007 when a Nova Scotia judge dismissed his claim that Wall shared the idea for the Trivial Pursuit board game with Chris Haney, who picked Wall up as a hitchhiker.
The judge determined that Wall had no witnesses to back up his claims.
“The system is working for the big boys with big pockets. The small boys have no rights when it comes to copyright legislation,” said Vancouver’s Emil Malak.
Malak is suing Hollywood mogul James Cameron and 20th Century Fox for allegedly stealing his idea for what became the highest grossing movie of all-time, Avatar. The film has generated more than US$2.7 billion.
“He didn’t only steal the story and the characters and their colours. He also stole some of the names,” said Malak, who owns the Ballagio Café on Hornby Street.
“His hero is called Jake. Mine is called Jake. His girl is called Neytiri. Mine is called Nefrit. Hello? He stole it.”
Malak claims that he contacted Cameron in 2003 and sent him the script that he claims he wrote in 1996 and registered in 1998 with the Writers Guild of Canada.
Cameron claims that he himself wrote the script in 1996 but did not register it anywhere, according to Malak.
Malak does not have any proof that he sent his script to Cameron but he said that Cameron does not dispute that he once saw Malak’s script.
Malak has filed a lawsuit in BC Supreme Court but so far lacks legal representation. He would like to find a law firm that would take the case on a contingency basis.
“If they think that I’ve gone away, they should think twice because I am going to fight them no matter what,” Malak said.