Mattel, Inc. v. MGA Entertainment, Inc.
616 F.3d 904 (2010)
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Rule of Law:
An employment agreement assigning rights to an employee's "inventions" does not unambiguously assign mere "ideas" if they are not explicitly listed. Furthermore, the scope of copyright protection for a work is narrow, requiring virtual identity for infringement, when the underlying idea permits only a limited range of expression that cannot be monopolized.
Facts:
- Carter Bryant worked for Mattel as a designer in its 'Barbie Collectibles' department under an employment agreement that assigned his 'inventions' to the company.
- The agreement defined 'inventions' with a non-exclusive list that included items like designs and discoveries, but did not explicitly mention 'ideas.'
- In August 2000, while still employed by Mattel, Bryant presented his concept for a new line of dolls, which he called 'Bratz,' to MGA Entertainment.
- Bryant showed MGA preliminary sketches and a crude physical model of a doll constructed from a Mattel doll head and a Barbie body.
- On October 4, 2000, Bryant signed a consulting agreement with MGA while still formally employed by Mattel.
- Bryant resigned from Mattel on October 4, 2000, but continued working there for a two-week notice period until October 19.
- During this two-week notice period, Bryant worked with MGA to develop the Bratz line, including contributing to the creation of a preliminary doll sculpt.
Procedural Posture:
- Mattel, Inc. sued MGA Entertainment, Inc. and Carter Bryant in the U.S. District Court for the Central District of California, alleging breach of contract and copyright infringement, among other claims.
- The district court granted partial summary judgment for Mattel, ruling that Bryant's employment agreement unambiguously assigned to Mattel all inventions created during the period of his employment, regardless of whether they were created on his own time.
- A jury found for Mattel, concluding that Bryant developed the 'Bratz' and 'Jade' names and the preliminary sketches and sculpt while employed by Mattel, and found MGA liable for copyright infringement, awarding Mattel $10 million in damages.
- Following the verdict, the district court entered equitable relief, imposing a constructive trust that transferred the entire Bratz trademark portfolio to Mattel and issuing a broad injunction prohibiting MGA from producing or marketing nearly all of its Bratz dolls.
- MGA Entertainment, Inc., as appellant, appealed the district court's equitable orders to the U.S. Court of Appeals for the Ninth Circuit, with Mattel, Inc. as appellee.
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Issue:
Does an employee's agreement to assign 'inventions' unambiguously assign mere 'ideas,' and does copyright law permit a finding of infringement based on similarities in unprotectable ideas, such as a doll's 'attitude' or style?
Opinions:
Majority - Kozinski, Chief Judge
No. An employment agreement that fails to explicitly assign 'ideas' is ambiguous on that point, and copyright protection extends only to the specific expression of an idea, not the idea itself. The district court's interpretation of both contract and copyright law was erroneous. The court held that the term 'inventions' in Bryant's contract was ambiguous as to whether it covered mere ideas like the names 'Bratz' and 'Jade,' and the district court erred by deciding this as a matter of law instead of letting a jury consider extrinsic evidence. The court also found the phrase 'at any time during my employment' ambiguous as to whether it covered work done on an employee's own time. Even if Mattel owned the initial ideas, imposing a constructive trust over the entire billion-dollar Bratz brand was an abuse of discretion, as it unfairly transferred the immense value MGA added through its own legitimate efforts. Finally, the court ruled that the district court misapplied copyright law by affording broad protection to the doll sculpt, which, due to the limited range of expression for the underlying idea, was only entitled to 'thin' protection against 'virtually identical' copying. For the finished dolls, the district court improperly based its 'substantial similarity' finding on unprotectable ideas, such as the dolls' 'bratty' attitude and fashion style, rather than on their protectable expression.
Analysis:
This decision reinforces the fundamental copyright principle of the idea-expression dichotomy, clarifying its application to commercial products and limiting the ability of creators to monopolize a general concept or style. It establishes that for works with a narrow range of possible expression, such as a particular style of doll sculpt, the standard for infringement is 'virtual identity,' setting a high bar for plaintiffs. The ruling also serves as a crucial check on the scope of equitable remedies like constructive trusts, preventing a windfall where a defendant's own efforts have created the majority of an asset's value, even if it originated from a misappropriated element. Finally, it underscores the importance of precise drafting in employment agreements, signaling that courts may find broad terms like 'inventions' ambiguous if they do not explicitly cover intangible assets like 'ideas.'
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