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Recent Case: Mattel v. MGA Appeal

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Mattel v. MGA Appeal

The 9th Circuit Court of Appeals overturned the district court’s decision regarding MGA’s alleged infringement of Mattel’s copyright and trademark rights for the “Bratz” doll line.  The reversal overturns Mattel’s “billion dollar damages win” with some very interesting points of law relating to employment, copyright, and trademark law, damages, and remedies.

In the district court trial, “The jury found that former Mattel employee Carter Bryant thought of the 'Bratz' and 'Jade' names, and created the preliminary sketches and sculpt, while he was employed by Mattel.  They also found that MGA committed three state-law violations relating to Bryant’s involvement with Bratz, and issued a general verdict finding MGA liable for infringing Mattel’s copyrights in Bryant’s preliminary Bratz works.  Mattel sought more than $1 billion in copyright damages but the jury awarded Mattel only $10 million, or about 1% of that amount, perhaps because it found only a small portion of the Bratz dolls to be infringing.” In effect, writes Judge Kozinski, “Barbie captured the Bratz. The Bratz appeal.” (at §I)

In reversing the district court’s decision, the Court of Appeals highlighted several important considerations that it believed may have been overlooked:

  1. “Even assuming that it did, and that MGA therefore misappropriated the names “Bratz” and “Jade,” the value of the trademarks the company eventually acquired for the entire Bratz line was significantly greater because of MGA’s own development efforts, marketing and investment.” (at §3);
  2. “It is not equitable to transfer this billion dollar brand— the value of which is overwhelmingly the result of MGA’s legitimate efforts—because it may have started with two misappropriated names. The district court’s imposition of a constructive trust forcing MGA to hand over its sweat equity was an abuse of discretion and must be vacated.” (at §7);
  3. “The district court’s error in construing the employment agreement is sufficient to vacate the copyright injunction.” (at §10);
  4. “Mattel can’t claim a monopoly over fashion dolls with a bratty look or attitude, or dolls sporting trendy clothing—these are all unprotectable ideas.” (at §18);
  5. “Substantial similarity” for copyright infringement requires a similarity of expression, not ideas. See id. The key question always is: Are the works substantially similar beyond the fact that they depict the same idea?” (at §20); and,
  6. “Because several of the errors we have identified appeared in the jury instructions, it’s likely that a significant portion—if not all—of the jury verdict and damage award should be vacated, and the entire case will probably need to be retried.” (at §21) 

The decision by the Court of Appeals could significantly alter the potential damages, if any, awarded upon the successful enforcement of Mattel’s intellectual property rights

The full opinion can be read here: Mattel-MGA Appeal Opinion.

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