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Chapter 11-team presentation

Page history last edited by abogado 4 years, 7 months ago

Team Presentations-Law1-Fall2015


Implied in Fact Contract - Wrench v Taco Bell


Implied in Fact Contract

            “an agreement 'implied in fact'" as "founded upon a meeting of minds, which, although not embodied in an express contract, is inferred, as a fact, from conduct of the parties showing, in the light of the surrounding circumstances, their tacit understanding

This type of contract requires no expressed or verbal confirmation of a contract.” This is simply a contract that two parties enter when the conduct leading up to the action implies that a service will be provided and that service will be compensated.


Implied in Law Contract

             “The lawful and purely voluntary acts of a man, from which there results any obligation whatever to a third person, and sometime a reciprocal obligation between the parties.” This type of contract does not necessarily have to involve both parties in the sense that one party may be in need of services but not requesting them and the party providing the service without consent is still in their right to collect compensation for providing services.


Why does the Copyright Act preempt state law claims?

            Copyright Act preempts state law claims because certain conditions of the Copyright Act apply federally and therefore any state claim will be over sighted in favor of the federal claim. The Copyright Act is part of the U.S. code and therefore applies to every state regardless of that state’s local laws. If the work or the subject matter of the work falls anywhere within the U.S Code then the Copyright Act will preempt any state claims.


When does Copyright law NOT preempt state claim?

            Copyright law does not preempt state claim if the extra element test is applied by the court. In which the plaintiff must prove extra elements above and beyond that mutual consent of payment and/or compensation were agreed upon.


Breach of an actual promise to pay for appellants' creative work. It is not the use of the work alone but the failure to pay for it that violates the contract and gives rise to the right to recover damages.

            In Wrench’s case against Taco Bell, Taco Bell breached an implied in fact contract because not only did they use the idea of the Psycho Chihuahua but they also profited from the idea and failed to compensate the original creators of the idea.


Here, appellants' implied-in-fact contract claim contains the essential element of expectation of compensation which is an element not envisioned by § 106

            17 U.S.C 106 provides the right of the copyright author to receive compensation upon distribution or selling of the idea. Taco Bell used merchandize and propaganda containing the idea of the Psycho Chihuahua which entitled Wrench to expect and collect compensation under the Copyright act whether or not it was explicitly agreed upon by both parties.


That Taco Bell may rebut a prima facie case of improper use of appellants' ideas by showing that the ideas were independently created

            This statement means that Taco Bell has the right to provide a rebuttal case in order to defend themselves and provide the opportunity to prove that they had arrived and conceived the idea of the Psycho Chihuahua on their own merit. They hold the right to a contestation. Taco Bell had hired an independent company who presented the idea of a live dog being animated in propaganda but the idea of the psycho dog still belongs to Wrench.


Wrench  ideas were not novel because they "merely combined themes and executions that had been used many times in a variety of commercials -  for different products.

            This part of the argument that defendant provided attempting to remove any copyright violations invalidating the Psycho Chihuahua as an idea that would not qualify for a copyright. However, this was not sufficient because Psycho Chihuahua ideas had already been presented to Taco Bell marketing executives prior to Taco Bell hiring the firm that presented the idea of a live dog in commercials.


Taco Bell does not claim that it was aware of the idea before plaintiffs disclosed it but, rather, concedes that the idea came from them. When a seller's claim arises from a contract to use an idea entered into after the disclosure of the idea, the question is not whether the buyer misappropriated property from the seller, but whether the idea had value to the buyer and thus constitutes valid consideration. In such a case, the buyer knows what he or she is buying and has agreed that the idea has value, and the Court will not ordinarily go behind that determination. The lack of novelty, in and of itself, does not demonstrate a lack of value

            The case does not lie in the question of whether Taco Bell stole the idea from Wrench and claimed it as their own but whether after the implied in fact contract that both parties were bound to Taco Bell made money. In this case Taco Bell profited heavily from Psycho Chihuahua propaganda and marketing and therefore whether or not compensation was agreed upon or not and whether or not the idea was stolen Wrench was still within their right to obtain compensation for the original thoughts.




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