Mattel, Inc. V. MGA Entertainment, Inc.

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Mattel, Inc. V. MGA Entertainment, Inc.
Case Overview
• In 2004, MGA Entertainment’s Bratz range of dolls
emerged on the market, they presented severe
competition to Mattel’s Barbie doll line
• In 2005, Mattel alleged that Bratz designer, Carter
Bryant was still an employee at Mattel when he
consulted MGA on the Bratz designs
• Mattel sought $1 billion in copyright damages from
MGA Entertainment
The Arguments
Mattel’s Arguments:
• Bryant violated his
employment agreement by
going to MGA with his Bratz
idea
• Mattel is the rightful owner of
Bryant’s preliminary sketches
& sculpt which MGA’s
subsequent Bratz products
infringed
• MGA wrongfully acquired the
name “Bratz” so the trademark
should be transferred to Mattel
MGA’s Arguments:
•
Bryant did not violate his
employment contract with
Mattel when he consulted with
MGA over potential doll
designs as the employment
contract does not cover ideas.
• Therefore, MGA has not
infringed on any copyrights or
trademark protections
Central Dispute
• The central issue in this case is whether or not Carter
Bryant’s 1999 employment agreement with Mattel could
be interpreted to cover ideas
• An excerpt of the agreement reads “I hereby assign to the
Company…all my right, title, and interest in such
inventions…the contract specifies that the term
‘inventions’ includes, but is not limited to, all discoveries,
improvements, processes, developments, designs, knowhow”
• Final court ruling stated that ideas are markedly different
from these examples since they are not concrete but exist
only in the mind.
Constructive Trust
• “An equitable remedy that compels the transfer of
wrongfully held property to its rightful owner” – US
Court of Appeals Case No. 09-55673
• The appeals court in this case had to decide if whether a
constructive trust was appropriate for this case. “A
constructive trust would be appropriate only if Bryant
assigned his ideas for ‘Bratz’ and ‘Jade’ to Mattel in the
first place”
• Bryant’s 1999 employment contract had to be analyzed to
determine whether the constructive trust is appropriate.
The appeals court ruled that the text did not compel that
ideas were covered, thus the constructive trust was not
appropriate.
Court Decision
• 2008 District Court Decision: awarded Mattel $10 million
(around 1% of the amount Mattel sought) as a small
portion of the Bratz dolls infringed Mattel’s copyrighted
work and imposed a constructive trust over all trademarks
(which essentially transferred the trademark portfolio to
Mattel).
• 2010 Court of Appeals Decision: No constructive trust
should be imposed on MGA and declared that MGA is the
rightful owner to the Bratz franchise
• 2011 Final Court Decision: federal retrial jury rejected
Mattel’s copyright infringement claims and finds that
Mattel owes MGA $88.5 million for stealing trade secrets
The appeals court proceedings can be found here:
http://www.ca9.uscourts.gov/datastore/opinions/2010/07/22
/09-55673.pdf
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