Karls v. Wachovia Trust Company, et al., CGC-09-487535 (Cal. 1st App. October 27, 2010) (unpublished).
The plaintiff allegedly devised a corporate tax strategy. By some means not alleged, defendants came upon plaintiff‘s idea and used it to obtain foreign tax credits. Plaintiff brought a single claim for conversion, seeking compensatory damages in the amount of tax credit that the defendants were able to claim as a result of their use of plaintiff‘s idea and punitive damages. Defendant Wachovia filed a demurrer, and Wells Fargo filed a motion for judgment on the pleadings, both of which were granted without leave to amend.
The defendants asserted that the complaint must be dismissed because it only alleged conversion of an idea, and because the plaintiff did not allege how defendants have substantially interfered with plaintiff‘s dominion over his own idea. The plaintiff argued that the conversion claim was proper because the tax structure was too complicated to be comprehended separate from the paper on which it was written. The plaintiff argued that, like Leonaro da Vinci‘s painting The Mona Lisa, the tax structure was an idea that could not be understood without reference to the tangible written presentation that he prepared prior to defendant‘s alleged conversion.
The Court of Appeals (Margulies, Rivera, Dondero writing) found that an idea does not qualify as property subject to conversion even if the idea is reduced to a writing:
It is apparent that the plaintiffs in the instant action were not seeking to recover the value of the particular items of personal property in defendants‘ possession but were seeking to recover damages for the value of a creative design allegedly appropriated by defendants. Plaintiffs made no attempt whatever to establish that the personal property in defendants‘ possession, consisting of one set of plaintiffs‘ plans, was of any value in itself. It may be inferred from the evidence that the value of one set of plans would be equal to the printing costs. Plaintiffs likewise made no attempt to show that they suffered any detriment from the loss of the one set of plans. The gravamen of plaintiffs‘ cause of action was the allegedly wrongful appropriation by defendants of a creative idea or design. The trial court was obviously correct in holding that the case should be submitted to the jury solely on the theory of copyright infringement and not on the conversion count. (Oakes v. Suelynn Corp. (1972) 24 Cal.App.3d 271, 279 (Oakes).)
In sum, while an action for conversion may be entirely appropriate in the context of paintings and other tangible mediums of artistic expression, under the rationales of Oakes and Melchior the tort is not available to plaintiffs suing for infringement on their intellectual property rights, regardless of whether the concepts at issue have been memorialized in a writing.