One of the reasons for similarities in Hollywood is that outright theft is quite common. Historically, it has been very difficult to prove damages to the necess

One of the reasons for similarities in Hollywood is that outright theft is quite common. Historically, it has been very difficult to prove damages to the necessary degree of certainty. This problem would be mitigated if more jurisdictions allowed liquidated-damages clauses in contracts to be enforced on a consistent basis. Unfortunately, most attempts at liquidating damages fail because courts usually characterize them as unlawful penalties. Judge Richard Posner, the most cited jurist of the last century, argues that sophisticated parties should be permitted to liquidate damages however they want, regardless of whether a court believes their agreement was reasonable. "The reason for the [contrary] rule is mysterious," he says, "it is one of the abiding mysteries of the common law." In the 1970s, businesses in California persuaded the California legislature to amend the relevant statute to create a rebuttable presumption that liquidated-damages clauses were lawful. Yet the Courts were so attached to the underlying rule that it made no difference! The California Supreme Court has inexplicably extended the very lines of authority that the legislature explicitly intended to override. I was involved in litigation that involved the red-handed theft of a pitch by the American division of a multi-billion dollar conglomerate. According to the terms of the liquidated-damages clause that the parties adopted, this theft would cost more than $120 million dollars. After years and years of litigation, with back-and-forth rulings, it was finally declared unenforceable. The firm whose pitch was stolen lost the chance for a life-changing opportunity, which may have cost it a hecto-million dollars or more. Until there is some realistic way to protect artistic ideas, whether through contract or state fiat, imitation will prevail over innovation, because the rewards are simply inaccessible to most outsiders. The means of production are owned by the existing Hollywood elite, and they simply steal whatever novel ideas newcomers develop. Please note: I am NOT advocating more stringent patent laws — or even stricter copyrights! People who are inspired by public ideas should be free to incorporate them in their art. But private parties also need the ability to disclose non-public ideas, without forfeiting their value. At least in Hollywood, right now they do not. And before that changes, expect the status quo.