Teich v. General Mills, Inc.

• Decision Date: 29 May 1959
• Citation: 339 P.2d 627,170 Cal.App.2d 791
• Court: California Court of Appeals Court of Appeals
• Parties: , 121 U.S.P.Q. 639 Jules H. TEICH, doing business under the firm name of Tower Industries, Plaintiff and Appellant, v. GENERAL MILLS, INC., a corporation, Defendant and Respondent. Civ. 23513.

Page 627

339 P.2d 627

170 Cal.App.2d 791, 121 U.S.P.Q. 639

Jules H. TEICH, doing business under the firm name of Tower Industries, Plaintiff and Appellant, v. GENERAL MILLS, INC., a corporation, Defendant and Respondent.

Civ. 23513.

District Court of Appeal, Second District, Division 2, California.

May 29, 1959.

Hearing Denied July 22, 1959.

Max E. Gilmore, Los Angeles, Daniel A. Weber, Berverly Hills, for appellant.

Gibson, Dunn & Crutcher, Richard H. Wolford, John L. Endicott, Los Angeles, for respondent.

ASHBURN, Justice.

This case falls within the ambit of Desny v. Wilder, 46 Cal.2d 715, 299 P.2d 257. Plaintiff sued to recover upon a contract to pay the reasonable value of an idea submitted to defendant in concrete form, a gadget for use as a premium in one of its products, a 'new children's do-it-yourself item in the photographic field.' Plaintiff did not claim novelty and originality which would make his 'premium item' protectible property within the common law of copyright and plagiarism. He relied upon contract.

A jury awarded plaintiff a recovery in the sum of $35,000. Motion for directed verdict had been made and denied; this was followed by a motion for judgment notwithstanding the verdict, which was granted. Plaintiff has appealed from that order and from the judgment entered pursuant thereto. As the order is not appealable (Schramko v. Saulter, 146 Cal.App.2d 549, 553, 303 P.2d 1061), the attempted appeal therefrom must be dismissed. The merits of the ruling are reviewable upon the appeal from the judgment.

The applicable rule of review is stated in Re Estate of Arnold, 16 Cal.2d 573, 581, 107 P.2d 25, 30: 'The right of the trial court to render a judgment notwithstanding the verdict is the same as its right to grant a nonsuit. Card v. Boms, 210 Cal. 200, 202, 291 P. 190. It may neither grant this motion for a nonsuit nor may it render judgment notwithstanding the verdict if there is any substantial evidence before the court in the first instance in support of plaintiff's case, or in the second instance in support of the verdict rendered by the jury.' Accord: Devens v. Goldberg, 33 Cal.2d 173, 177, 199 P.2d 943; Champion v. Bennetts, 37 Cal.2d 815, 820, 236 P.2d 155. We therefore accept for present purposes all evidence and inferences favorable to plaintiff-appellant.

Plaintiff's proffered premium was a kit for making sun pictures, a thing which he had done as a boy, as had many other boys. It consisted of a black opaque envelope in which were contained a collapsed cardboard holder, a negative consisting of a picture printed on cellophane and two pieces of sensitized paper. The idea was that a child could use this kit to create a picture through his own efforts. The process is simple; the sensitized paper is inserted in the holder and the cellophane printed negative superimposed over it. Upon exposure to the sun the picture of the negative is printed upon the sensitized paper.

Through expenditure of much effort and substantial monies plaintiff had brought this concrete expression of his idea to the point where he thought it marketable. So he called the Los Angeles office of defendant General Mills, Inc., and inquired whether anyone there could purchase premium items and was told to contact Mr. Otis Young of the San Francisco office, that he was the one who could purchase those items. Mr. Young was advertising and sales promotion manager of Sperry Operations, which was a geographical division of General Mills, Inc., and in no sense a separate entity although it was largely autonomous, distributing grocery products in the western portion of the United States. The headquarters of General Mills, Inc. was in Minneapolis. Mr. Young had sole responsibility of procuring premiums for Sperry products but he testified that none of them have appeal for children; that that division did not use 'kids" premiums. Mr. Young had no duty to report his premium activities to the head office, which was located in Minneapolis.

On July 6, 1955, plaintiff wrote Mr. Young advising that 'I have developed a new children's do-it-yourself item in the photographic field. I feel it would make an excellent premium item for your company. * * * I have never offered this to anyone and I would like to make an appointment preferably on a Monday with you and discuss its possibilities.' On the 8th he received from Mr. Young an answer, 'with regard to a premium item which you have developed for us in the children's field.' He also suggested that plaintiff call on him on the 18th. Before that date arrived Young telephoned plaintiff from San Francisco postponing the meeting to July 20th. In that conversation he said that if plaintiff's item was accepted some six to seventeen million of them could be bought. On July 20th plaintiff called at Young's San Francisco office. There was also present Mr. Lawrence D. Dunham who was vice president of an advertising firm which worked with the personnel of General Mills, being in constant touch with Sperry Operations and having nothing to do with General Mills national products. There were also present two other men of the defendant company, 'observers or executives' whose names plaintiff could not remember at the trial. Plaintiff testified: 'After the introductions I told Mr. Young that I would be willing to disclose this premium idea to him if he expressly understood that if he used my premium item I would be paid for it and he agreed. * * * Q. You say 'he agreed.' That is your conclusion. It may be stricken. What did he say? A. He said 'Yes, I would if I used it.'' Plaintiff thereupon disclosed his idea and the kit; demonstrated the making of a picture with it. Young 'was quite surprised at what he saw and they all seemed to be elated with the results. They thought it would be quite a nice premium. They said it would be a nice premium for the youngsters, they would have something that they could make themselves and it would give them satisfaction that they were able to develop their own pictures.' The question of permanency of the picture was raised and plaintiff said it would last possibly six hours to six months if not further exposed to light. He was asked 'whether there was a probability of getting some permanency in the negative. I told them that could be obtained, that I would have to work on that when I arrived back at Los Angeles. They seemed satisfied with what they saw. I left some samples there, I was asked to, and said goodbye to the gentlemen and went on home.' Young's testimony differed in some substantial respects, denying that Teich said that he wanted it understood before showing his premium item that if Young liked it he would be paid for it, or that he told plaintiff that if the item was something that he, Young, liked he would be happy to pay plaintiff for it. But he also testified: 'Q. * * * Well, when he came to the office and displayed his item, did you look at it with the expectation that if you used it, you would pay him for it? A. Pay him for the premium? Q. Yes. A. Certainly.' Again: 'Q. And you knew at that time that he was disclosing it and demonstrating it to you with the expectation if you used it he would receive some compensation for it; isn't that true? A. I always assume that.' Unquestionably plaintiff established a contract on the part of defendant to pay for his idea if used by it. However, from that day Mr. Young ignored him.

On July 22nd plaintiff wrote Young that he had achieved permanency of picture by using a different type of paper and a fixer or hypo. Receiving no response plaintiff waited about a week and then sent a night letter which was almost a duplicate of the communication of the 22nd; it met with silence. Then plaintiff tried to get Young on the telephone but was told he was 'not available.'

In January, 1956, plaintiff saw for the first time a package of General Mills cereal known as Trix which showed on the outside that it contained a 'Magic Sun Picture.' Buying and opening one he found a kit bearing marked similarity to his own. The basic principle was the same but there were differences in details. The negative and paper were smaller in size than plaintiff's the negative was about one-third of the thickness of his own but it was cellophane, or acetate as respondent calls it. Defendant's negative was printed by rotogravure process, while plaintiff's was done with rubber dies or plates. There were no other substantial differences. Testing showed that the sun picture produced by a Trix kit had no more permanency than plaintiff's own. So marked was the similarity of the two kits that Mr. Young, when he first learned of the Trix premium through a 'planning letter' from the Minneapolis office, was amazed. He testified: 'Well, I would like to give you my reaction when I got this planning letter. Q. Yes. I would appreciate it. A. I thought to myself, 'Holy smoke! Did I miss one out here?' Q. I see. Did you think that Mr. Teich had gone to Minneapolis and sold--A. That's right, yes. Q.--his idea to Minneapolis? A. That's right. And as I recall the premium itself, it was small and to me it appeared something like the one Mr. Teich had.' Also: 'It was, I think, alike in the approximate size of the thing, and generally in the method of handling the thing it seemed to be basically the same procedure.' Young also called Dunham and 'gave him the same reaction. I said, 'Do you suppose we missed one out here?'' Dunham testified: 'I think I can remember his exact words. He said: 'I wonder if we passed something up here. 'Trix' has a premium similar to the one we looked at last summer.''

A showing of access and similarity raises an inference of copying. Golding v. R. K. O. Pictures, Inc., 35 Cal.2d 690, 695, 221 P.2d 95; Kovacs v. Mutual Broadcasting System, 99 Cal.App.2d 56, 65, 221 P.2d 108. The standard for determining similarity is 'the common knowledge of the average reader, observer, spectator or listener.' Stanley v. Columbia...