Mattel, Inc. v. MGA Entertainment, Inc.

On remand, the district court denies both MGA’s and Mattel’s motions for summary judgment on the issue of copyright infringement of first generation Bratz dolls, and grants summary judgment to MGA on Mattel’s copyright infringement claim relating to most second generation Bratz dolls; the district court also denies both parties’ motions for summary judgment on the issue of whether Mattel’s confidentiality agreement applied to ideas.

Mattel, Inc. is the maker of Barbie dolls and the former employer of Carter Bryant, who left Mattel to join MGA, maker of Bratz dolls. Mattel alleged that Bryant breached a confidentiality and inventions agreement by taking his ideas for the Bratz dolls, which he developed while employed by Mattel, to MGA. A jury found in favor of Mattel and the court issued an injunction barring MGA from selling most of its Bratz dolls.

MGA appealed and the Ninth Circuit reversed, based on erroneous jury instructions and an overbroad injunction. The district court granted MGA’s motion for a new trial. In this decision, the court addressed, among other things, the issue of whether the confidentiality agreement covered ideas; whether Bryant’s sketches and sculpts are substantially similar to the first and subsequent generations of Bratz dolls; and whether MGA misappropriated Mattel’s trade secrets.

Mattel’s “Employee Confidential and Inventions Agreement” required Bryant to communicate to Mattel “all inventions . . . conceived or reduced to practice by me (alone or jointly with others) at any time during my employment with [Mattel].” It also assigned to Mattel any rights, title and interest Bryant had in such inventions, which the agreement defined as “includ[ing], but [] not limited to, all discoveries, improvements, processes, developments, designs, knowhow, data computer programs, and formulae, whether patentable or unpatentable.” The agreement did not include the word “ideas”.

The Ninth Circuit held that the text of the agreement was ambiguous on the issue of whether it applied to ideas, and the Ninth Circuit requested that the district court consider extrinsic evidence. Mattel argued that it and Bryant intended the confidentiality agreement to encompass ideas when the contract was executed, but the district court held that Bryant’s testimony in a separate law suit and inconsistencies in Mattel’s exit interview form undermined this claim. The court denied the parties’ motions for summary judgment on this issue.

The court also denied summary judgment on the issue of whether the confidentiality agreement was unconscionable or contrary to a reasonable employee’s expectations and on the issue of whether “at any time during my employment” includes nights and weekends, explaining that these issues are better suited to a fact finder.

Turning to Mattel’s claims of copyright infringement, the court denied MGA’s motion for summary judgment relating to the first generation of Bratz dolls, and granted its motion relating to subsequent generations of all but two of the Bratz dolls. The court conducted the intrinsic/extrinsic test for each doll to determine if the Bratz dolls were substantially similar to Bryant’s sketches and early sculpts. The court held that “a young, female fashion doll with exaggerated proportions” is an unprotectable idea, and that “large heads, thick lips, high cheekbones, slim arms, long legs, and slim torsos” are also unprotectable “as they are required by the underlying idea.” However, the court held that there is a genuine issue of material fact whether protected elements of the first generation of Bratz dolls – such as the size, shape and placement of the ears and nose – are substantially similar to Bryant’s sketches and sculpts and denied summary judgment on the issue of copyright infringement as to these dolls.

Regarding subsequent generations of Bratz dolls, the Ninth Circuit held that they lack any meaningful similarities outside of ideas with Bryant’s early sketches and sculpts. The district court thus said that the Ninth Circuit’s opinion disposes of most of Mattel’s claims of copyright infringement relating to subsequent generations of Bratz dolls, with the exception of two dolls (Ooh La La Chloe and Formal Funk Dana). The court granted MGA’s motion for summary judgment relating to copyright infringement of second generation dolls, and denied it with respect to the two named dolls.

The court also denied both parties’ motions for summary judgment on the issue of whether Mattel’s alleged trade secrets derived independent economic value from not being generally known. MGA argued that doll concepts and doll names cannot be trade secrets. The court disagreed with this position, saying that “concepts can have value independent from the product they eventually inspire,” but held that the issue is better resolved by a fact finder.