Property, intangible

Be still my heart, my title is the opening line in the 9th Circuit decision about the long-standing dispute over the Bratz dolls, a title I have somehow thus far missed using.  More background than you could ever want on the case is here.

As we all know, MGA Entertainment lost in a big way.  The district court imposed a constructive trust for the trademarks “Bratz” and “Jade,” as well as the copyright registrations for the dolls.  The court of appeals (Kozinski, who better) summarized the results at the trial level thusly: “In effect, Barbie captured the Bratz.”

Whether placing the trademarks in a constructive trust for the benefit of Mattel was appropriate depends on whether Carter Bryant, the doll designer, had, by virtue of having signed his employment agreement with Mattel, assigned them to Mattel before jumping ship to MGA Entertainment.  He could only have done so if the trademarks were “inventions,” defined as

For those “inventions,” the assignment was of

Note that the word “ideas” appears nowhere in the definition. Nevertheless, the district court instructed the jury that Bryant’s “ideas” had been assigned to Mattel and all the jury had to decide was which ideas Bryant developed while at Mattel.  The appeals court therefore reversed, concluding that the trial court erred in not considering extrinsic evidence to clarify whether “inventions” included “ideas.”

But even assuming “inventions” included “ideas,” the constructive trust imposed was too broad.  The Law Vegas Trademark Attorney gives the lowdown on the court’s reasoning, an important lesson to remember on those many occasions when one deals with a constructive trust.

The copyrighted content in the constructive trust didn’t fare any better.  The designs Bryant created while employed by Mattel clearly fell within the definition of “inventions” (given Mattel is a toy company, that would have been a HUGE screw-up if it hadn’t).  The question, though, was whether the works were created “at any time during my employment.” The phrase is ambiguous; it could mean anytime day and night while employed by Mattel or just during work hours.  On summary judgment the trial court decided that it meant any time day or night, but the appeals court held the contract was ambiguous even after considering the extrinsic evidence, so the question should have been given to the jury.  Since Mattel’s ownership of the copyrights was vacated, its infringement case against subsequent versions of the Bratz dolls fell too.

So momentum swings back in MGA Entertainment’s direction.  But this case was filed in 2004 and still has years to go, and perhaps many more swings to go.

Mattel, Inc. v. MGA Entertainment Inc., No. 09-55673 (9th Cir. July 22, 2010).

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