How the Bratz Verdict May Impact You

Logo for Bratz DollsIf you aren’t interested in dolls and don’t take any particular interest in doll design, the case between Mattel and MGA can seem like it has no bearing on your day-to-day life. After all, it might not seem to be terribly important as to which side owns the famous doll line, unless you know you’ll need to buy one in the near future.

However, the case actually deals with a lot of thorny and interesting copyright issues that, over the course of the seesaw battle, has raised some interesting questions that can impact copyright holders of all stripes, not just those who are interested in making plastic dolls.

So, if you’re a content creator, here’s why you need to be paying attention to this case and what the recent ruling may mean for you.

Background of the Case

Mattel Logo

The strange tale of the Mattel/MGA dispute actually began in 2000. An employee of Mattel’s, Carter Bryant, had developed a new line of dolls and was working the company MGA, in secret from Mattel, to bring them into production. After turning in his two-week notice and signing a consulting agreement with MGA Bryant helped get the Bratz line released in 2001, where it became a near-instant success.

Some the thereafter, when Mattel learned that the line was developed by Bryant, they filed a flurry of lawsuits. The one which was ruled today first made it to court in 2008. That trial was nothing short of a sweeping win for Mattel, finding that they owned the doll line, ordering MGA to stop production of the Bratz dolls and prepare to turn over all of the related intellectual property to Mattel.

However, that injunction was stayed pending an appeal and the 9th Circuit Court of Appeals ruled on the matter almost exactly a year later, completely vacating the lower court’s ruling.

The reason for the sudden reversal was that, according to the Appeals Court, the lower court had erred on the issue of Bryant’s employment agreement. The lower court had ruled that it was a matter of fact all of the ideas Bryant had created during his time of employment were owned by Mattel, leaving only the question of which elements he had developed during that time. However, the Appeals court said that the agreement was more ambiguous and the matter should be left for the jury to decide.

(Note: Bryant has maintained that he actually came up with the idea for the Bratz line in 1998, while he was on a break from working for Mattel, an assertion Mattel has attacked both in and out of court.)

And decide they did. With new jury instructions, the case headed back to the District Court, where jurors listened to over three months of testimony and deliberated for over two weeks before finding that Mattel does not own the Bratz line and awarding the company no damages.

Of course, this is only one piece of the Mattel/MGA legal battle. The two sides have traded blows over alleged espionage (another matter ruled upon in this verdict, once again favorably for MGA), hidden money and much more.

But while the bad blood between the two companies may not be ready to die down any time soon, much less the legal wrangling, it seems the copyright issues are at least more resolved and that gives pause for content creators to stop and figure out what the verdict means.

What it Means to You

The biggest area that this verdict seems to deal with is the concept of work for hire and of employment. Generally, any work you create for an employer as part of your job becomes copyright of the employer, not you. However, almost instantly there becomes issues as to what is and is not part of your employment, especially when you do creative work on the side that is similar to the work you do for a living.

So, for example, if you are a writer for an employer but also do creative projects on the side, there could be issues as to who owns the rights of the work you create, especially if you use any company time or equipment to make it.

On that front, the Bratz case actually has some interesting input, consider the following:

  1. Interpreting the Employment Agreement: Bryant’s employment agreement with Mattel states that Mattel owns any intellectual property created by him “at any time during my employment by the Company.” Mattel pushed that that included creations made during his off hours and outside of his scope of employment and the lower court initially agreed. The Appeals Court, however, ruled that this was ambiguous and needed to be decided by a jury and it seems the second jury ruled against Mattel’s theory.
  2. Determining the Scope of Employment: Bryant was employed by Mattel not to develop new doll lines, but to develop fashion for existing ones. As such, MGA argued that the Bratz were outside of his scope of employment. The lower court initially ruled against them, but the Appeals Court found this to be ambiguous and sent it back to the jury to decide.

Finally, the case also raised some interesting derivative works issues.

This is because, prior to 2001, well after Bryant ended his employment with Mattel, the Bratz dolls did not exist and were only sketches and prototypes. There were questions about how much the current dolls were infringing, especially since new dolls had been developed.

The lower court ruled that the dolls were substantially similar to the drawings but the Appeals Court ruled that the lower court had failed to remove all of the unprotectable elements from consideration and found that the jury’s verdict in the first trial should be vacated. It is unclear at this time if and how the second jury dealt with this issue as all we know is that the jury ruled Mattel does not own the sketches and ideas.

Bottom Line

All in all, the case seems to be a big win for creators who develop copyrightable works outside of the scope of an existing employment. The Appeals Court, and seemingly the second jury, took a very narrow view of both the scope of employment and the actual agreement. This can be good for dealing with employers who want to grab rights to works created by employees off the job.

The derivative works questions are also interesting, especially for those who develop artwork based on the human form. The Appeals Court goes into great detail about what elements are and are not protectable in such an expression, making some very interesting points.

The main take away from all of this is that copyright law is in a constant state of flux. Not only are we adding new laws and new tests, but the ways the existing tests are interpreted is constantly changing. As such, if you make a living in any regard off of copyrighted works, you need to do your best to follow recent rulings, even those that might not seem to have a direct bearing on you, as they can have a great impact down the road.

In that regard, this case is just one of the dozens, if not hundreds, that could have a similar impact, but it certainly is one of the more interesting and exciting.

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