Property, intangible

a blog about ownership of intellectual property rights and its licensing

Work Made for Hire Doctrine Trashed by Trailer Trash

It turns out that the success of Trailer Trash Barbie was indeed the fact that it was a Barbie. After Paul Montwillo (doing business under the name Paul Hansen) and his business partner, William Tull, settled a lawsuit Mattel brought in 1997 against them for their sale of Barbie dolls turned into “Trailer Trash Barbie,” “Hooker Barbie” and the like, they started a business making trailer trash-themed dolls that weren’t based on Barbie. The business was an abysmal failure and, as one could have predicted, the two turned on each other.

Tull and Montwillo had formed a new company for the new dolls, a partnership that was converted into a limited liability company of which both were managing members. Tull was in charge of business affairs, sales, distribution and manufacturing. Montwillo was in charge of design and advertising of the product line, including product design and packaging. Upon dissolution of the company (triggered by Montwillo’s personal bankruptcy), Tull claimed to own the copyrights in the five dolls created by Montwillo for the new business as satisfaction of a company debt owed to him. Montwillo claimed that he was the owner of the copyrights in the doll designs.

The district court’s decision on summary judgment is most remarkable for the weakness of the advocacy and reasoning. The court held that the doll designs were not works made for hire under Section 101 of the Copyright Act, which defines a work made for hire as “a work prepared by an employee within the scope of his or her employment.” (Emphasis in decision). Tull admitted in a Request for Admission that Montwillo “was never an employee” of the company. The court therefore stated, “Here, it is undisputed that plaintiff was not an ’employee’ of [the company]. Defendants have not cited any cases applying the ‘work for hire’ doctrine to a non-employee, and the Court is not aware of any such authority. In the absence of any such authority, and because the statute defines a ‘work for hire’ as ‘a work prepared by an employee . . . ‘, the Court finds that the ‘work for hire’ doctrine is inapplicable.” Note that the Court doesn’t even get the name of the doctrine right; it is correctly “work made for hire,” not “work for hire.”

The reasoning is nonsensical; of course one would not apply a statute about an employee to a non-employee, but the question is “what is an employee?” The Court and the parties must not have searched very hard to have missed the Supreme Court’s authority on this very point in Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989). CCNV held that whether a person is an employee is a matter of the common law of agency, with 13 factors to consider. Surely a managing member of a limited liability company whose responsibility was the design of the dolls might fall into the “employee” category as defined by CCNV, or at least Tull deserved a passing mention of the 13 factors in the decision. Indeed there was his admission that Montwillo was not an employee, but Montwillo had also stated in his bankruptcy petition that he did not own any “patents, copyrights, [or] other intellectual property,” and he had designed the packaging for the dolls that listed the LLC, not himself, as the copyright owner in the copyright notice. Certainly whether the dolls were works made for hire could not be so easily decided on summary judgment.

Case is Montwillo v. Tull, 2008 WL 2264574, No. C 07-3947 SI (N.D.Cal. June 2, 2008).

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