Reference no: EM131473251

Question: REEVES v. ALYESKA PIPELINE SERVICE, 56 P.3D 660 (ALASKA 2002)

FACTS John Reeves, the owner of a tourist attraction in Fairbanks, conceived of and developed an idea to build a visitor center at a turnout overlooking the Trans-Alaska Pipeline near Fairbanks. After receiving an assurance from Alyeska's Fairbanks manager, Keith Burke, that the idea was "between us," Reeves orally described his idea. Burke indicated it "looked good," and asked Reeves to submit a written proposal, which he did. Alyeska subsequently ceased dealing with Reeves and built the visitor center on its own. Reeves sued Alyeska, arguing that in return for Reeves disclosing his idea to Burke, Alyeska had promised not to implement or disclose Reeves's idea without allowing him to participate in the implementation. A jury awarded Reeves damages under various alternative contract and tort theories. Alyeska argued on appeal that the disclosure agreement was unenforceable, pointing to Reeves' testimony at trial that Alyeska had not promised to pay him a specified amount for disclosure of his idea "or even an unspecified reasonable value." It thus argued that the disclosure agreement was unenforceable because it lacked essential contract terms and was overly vague. DECISION The Alaska Supreme Court had already rejected a similar argument by Alyeska in an earlier proceeding involving these parties.

The court noted that it had held in its earlier opinion that: contract and contract-like theories may protect individuals who spend their time and energy developing unoriginal or non-novel ideas that others find useful, because "it would be inequitable to prevent these individuals from obtaining legally enforceable compensation from those who voluntarily choose to benefit from the services of the ‘idea-person.'" We further explained that "if parties voluntarily choose to bargain for an individual's services in disclosing or developing a non-novel or unoriginal idea, they have the power to do so." [A] disclosure contract is not a typical agreement for the sale of goods or services at an agreed-upon price; rather, it is an agreement for disclosure of an idea in exchange for a promise not to use the idea without including the disclosing party in its implementation. The court found that "the record contains sufficient evidence to support a finding that, in return for Reeves's agreement to disclose his idea, Alyeska promised him either confidentiality or participation in implementing the visitor center project. This promise is sufficiently definite as a matter of law to establish an enforceable disclosure agreement. Similarly, there can be no question that Reeves produced sufficient evidence to support the jury's finding that Alyeska breached this agreement by unilaterally exploiting Reeves's idea."