Perspectives from Intellectual Property, Labour, Competition and Corporate Law
Edited by Marilyn Pittard, Ann L. Monotti and John Duns
Chapter 2: Failed collaboration: the misappropriation of business opportunities, ideas and advantages by prospective co-venturers, financiers and brokers
Unsurprisingly, a deal of our law on the misappropriation of ideas and business opportunities has originated in cases which are variants on a common theme. A person (alone or with others) has developed an idea or identified a business opportunity. To exploit the idea or to realise the opportunity it becomes necessary or desirable to bring in others, be this for venture capital, to provide needed skill, capacity or facilities, to spread risk and so on. And so the search for a financier, a co-venturer, or whoever begins. In negotiations with a prospective collaborator the idea is disclosed, the opportunity revealed. The negotiations fail. The search resumes only for it to emerge that the former prospective collaborator has appropriated the idea, has exploited the opportunity, for its own benefit. I said ‘unsurprisingly’ for this reason. The point at which the need arises to involve others is one of considerable vulnerability for the originator of an idea or the proponent of an opportunity. Sometimes circumstances may permit a measure of contractual protection to be secured. But often not, or else contract is not thought of. To illustrate the basic problem and some of its variations, one can draw very selectively from a large number of recent commercial examples from across the common law world. A discovered gold on its land. It needed a large co-venturer to finance and conduct operations for a mine. It entered into negotiations with X for such a joint venture and disclosed its drilling results.
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