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Current Developments in the Commercial Divisions of the
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Posted: January 8, 2014

Claim for Misappropriation of Ideas Dismissed on Summary Judgment Because Idea Not Novel

On December 23, 2013, Justice Kapnick of the New York County Commercial Division issued a decision in PSKW, LLC v. McKesson Specialty Arizona Inc., 2013 NY Slip Op. 33257(U), granting defendant summary judgment to the extent the plaintiff claimed misappropriation of ideas.

In PSKW, LLC, the plaintiff alleged that the defendant had misappropriated its ideas for a pharmaceutical marketing product in violation of the parties’ NDA. Justice Kapnick noted that a claim for misappropriation of ideas could sound in contract or tort, but regardless of which, it depended on the idea being novel and not derivative of another concept. In applying this principle to the facts, she held:

Based on all the evidence submitted, this Court finds that defendant has met its burden of showing that the New Co-Pay Method was not novel (in absolute terms) as a matter of law, and although it may have been a clever, useful idea, it was derivative of the various products that came before it. Indeed, plaintiff does not dispute that its idea was meant to address the problems or shortcomings of the earlier generation debit card programs. Accordingly, the Court finds that the New Co-Pay Method was an expansion and adaptation of existing knowledge, rather than the innovation of a new idea. Therefore, the third cause of action for misappropriation of ideas is dismissed.

Justice Kapnick declined to dismiss the other claims which characterized as being for misappropriation of confidential factual information and not of ideas.

One lesson here is the importance of written non-disclosure agreements. The NDA claim survived here even when the misappropriation of ideas claim was dismissed.

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