Wednesday, August 04, 2010

Kozinski KO's Barbie

Mattel employee, Carter Bryant, developed Bratz dolls,
which seemed similar to Mattel's Barbie. While still employed by Mattel,
Bryant pitched his idea for the Bratz line of dolls to two employees of MGA
Entertainment, one of Mattel’s competitors. Bryant later signed a consulting agreement with MGA on Octo-
ber 4, 2000 and, also on Oct. 4, Bryant gave
Mattel two weeks’ notice and continued work-
ing there until October 19. Litigation later ensued.
(See IPBiz:
FRIDAY, DECEMBER 05, 2008 --Bratz busted

The CA9 opinion by Judge Kozinski includes the text:

Bryant’s 1999 employment agreement assigns to Mattel
inventions created “at any time during my employment by the
Company.”5 MGA argues that “at any time during my
employment” covers only works created within the scope of
Bryant’s employment, not those created on his own time and
outside of his duties at Mattel. Bryant wasn’t tasked with cre-
ating new doll lines there; he designed fashions and hair styles
for Barbie Collectibles. MGA thus argues that Bryant created
the Bratz designs and came up with the names “Bratz” and
“Jade” outside the scope of his employment, and that he
therefore owns the work.6

The district court disagreed, holding at summary judgment
that the agreement assigned to Mattel “any doll or doll fash-
ions [Bryant] designed during the period of his employment
with Mattel.” It was therefore irrelevant “whether Bryant
worked on [Bratz] on his own time [or] during his working
hours at Mattel.” We again review the district court’s con-
struction of the contract de novo. See L.K. Comstock, 880
F.2d at 221.

[9] The phrase “at any time during my employment” is
ambiguous. It could easily refer to the entire calendar period
Bryant worked for Mattel, including nights and weekends.
But it can also be read more narrowly to encompass only
those inventions created during work hours (“during my
employment”), possibly including lunch and coffee breaks
(“at any time”).7 Extrinsic evidence doesn’t resolve the
ambiguity. For example, an employee testified that it was
“common knowledge that a lot of people were moonlighting
and doing other work,” which wasn’t a problem so long as it
was done on “their own time,” and at “their own house.” She
agreed when asked, “Was it your understanding that if you
designed dolls when you were at home at night that you
owned them?” However, another employee testified, “Every-
thing I did for Mattel belonged to Mattel. Actually, everything
I did while I was working for Mattel belonged to Mattel.”
[10] Because the agreement’s language is ambiguous and
some extrinsic evidence supports each party’s reading, the
district court erred by granting summary judgment to Mattel
on this issue and holding that the agreement clearly assigned
works made outside the scope of Bryant’s employment. See
City of Hope Nat’l Med. Ctr., 181 P.3d at 156. The issue
should have been submitted to the jury, which could then
have been instructed to determine (1) whether Bryant’s agree-
ment assigned works created outside the scope of his employ-
ment at Mattel, and (2) whether Bryant’s creation of the Bratz
sketches and sculpt was outside the scope of his employment.

Yes, section 2870 is mentioned in a footnote:

The agreement excepts inventions that “qualif[y] under the provision
of Section 2870 of the California Labor Code[, which] provides that the
requirement to assign ‘shall not apply to an invention that the employee
developed entirely on his or her own time without using the employer’s
equipment, supplies, facilities or trade secret information except for those
inventions that either (1) relate at the time of conception or reduction to
practice of the invention to the employer’s business . . . or (2) result from
any work performed by the employee for the employer.’ ”

The nub of the case:

[12] Assuming that Mattel owns Bryant’s preliminary
drawings and sculpt, its copyrights in the works would cover
only its particular expression of the bratty-doll idea, not the
idea itself. See Herbert Rosenthal Jewelry Corp. v. Kal-
pakian, 446 F.2d 738, 742 (9th Cir. 1971). Otherwise, the first
person to express any idea would have a monopoly over it.
Degas can’t prohibit other artists from painting ballerinas, and
Charlaine Harris can’t stop Stephenie Meyer from publishing
Twilight just because Sookie came first. Similarly, MGA was
free to look at Bryant’s sketches and say, “Good idea! We
want to create bratty dolls too.”

[13] Mattel, of course, argues that MGA went beyond this
by copying Bryant’s unique expression of bratty dolls, not just
the idea. To distinguish between permissible lifting of ideas
and impermissible copying of expression, we have developed
a two-part “extrinsic/intrinsic” test. See Apple Computer, Inc.
v. Microsoft Corp., 35 F.3d 1435, 1442 (9th Cir. 1994). At the
initial “extrinsic” stage, we examine the similarities between
the copyrighted and challenged works and then determine
whether the similar elements are protectable or unprotectable.
See id. at 1442-43. For example, ideas, scenes a faire (stan-
dard features) and unoriginal components aren’t protectable.
Id. at 1143-45. When the unprotectable elements are “filtered”
out, what’s left is an author’s particular expression of an idea,
which most definitely is protectable. Id.


[16] The expression of an attractive young, female fashion
doll with exaggerated proportions is thus highly constrained.
Cf. Data East USA, Inc. v. EPYX, Inc., 862 F.2d 204, 209 (9th
Cir. 1988) (“Because of these constraints, karate is not sus-
ceptible of a wholly fanciful presentation.”). Because of the
narrow range of expression, the preliminary sculpt is entitled
to only thin copyright protection against virtually identical
copying. Cf. Ets-Hokin v. Skyy Spirits Inc., 323 F.3d 763, 766
(9th Cir. 2003) (photo of vodka bottle merits only thin protec-
tion because of limited range of expression); Satava, 323 F.3d
at 812 (similar). The district court erred in affording broad
protection against substantially similar works to the sculpt.

The punchline: America thrives on competition; Barbie, the all-American
girl, will too.

Footnote 11 on clothing-->

MGA argues that doll clothes aren’t entitled to copyright protection.
Copyright law doesn’t protect “useful articles” that have an “intrinsic utili-
tarian function” apart from their expression or appearance. See 17 U.S.C.
§§ 101, 102(a)(5). Human clothing is considered utilitarian and unprotect-
able. See Poe v. Missing Persons, 745 F.2d 1238, 1242 (9th Cir. 1984).
However, articles that are intended only to portray the appearance of
clothing are protectable. Id. Dolls don’t feel cold or worry about modesty.
The fashions they wear have no utilitarian function. Cf. Masquerade Nov-
elty v. Unique Indus., 912 F.2d 663, 670-71 (3d Cir. 1990) (animal nose
masks have no utilitarian function apart from portraying appearance of
animal nose); Gay Toys, Inc. v. Buddy L Corp., 703 F.2d 970, 973 (6th
Cir. 1983) (toy airplane merely portrays appearance of actual airplane and
has no utilitarian function). Even if we were to defer to the letter from the
Copyright Office saying that doll clothing isn’t protected, as MGA argues
we should, the letter’s interpretation is obviously wrong.

**UPDATE. From worldtrademarkreview:

One thing that can be learnt from the dispute between Mattel and MGA Entertainment over the Bratz doll brand is that not every employee of any given company understands IP rights. Knowledge of intellectual property runs through the veins of some companies - WTR recently heard from Siemens about that corporation's IP-aware 400,000 employees (full details will be published this autumn). For others, fostering this sort of understanding is trickier.


Central to the suit, Bryant signed an employment contract with Mattel to communicate to the company all his inventions while under its employ. "I hereby assign to the company," stated the contract, "all my right, title and interest in such inventions, and all my right, title and interest in any patents, copyrights, patent applications or copyright applications based thereon." The contract defines 'inventions' as "discoveries, improvements, processes, developments, designs, know-how, data computer programs and formulae, whether patentable or unpatentable".

The cases crafted by both Mattel and MGA examine the terminology used in this contract (eg, whether 'invention' includes 'ideas') and the question of whether an employee is still subject to such a contract outside of working hours. In these analyses, however, what is missed is Bryant's understanding of the key concepts. It is surely a fact that everyone has signed a contract without understanding the implications of every clause. But in this case, a billion-dollar brand is at stake: it is worth questioning to what extent Bryant's understanding of intellectual property was assessed and/or augmented during his time with Mattel.

Do innovation-driven companies conduct regular reviews into employee awareness of the rights that can underpin their creations? Do trademark counsel and marketing managers run programmes to educate colleagues across the business about the importance of intellectual property and brand?

There is a lot of talk of plugging IP strategy into business strategy; in fact, for many companies, IP strategy is business strategy. Surely one task of a good trademark counsel is to spread the word.


Blogger Unknown said...

I like the post ... very funny.


11:07 AM  

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