LEGAL ISSUES
Section Editors: Bruce Strauch (The Citadel)
MATTEL, INC. V. MGA ENTERTAIN- Pool, Bratz Babyz Ponyz Buggy Blitz, Ninth said ‘twas inequitable to transfer a MENT, INC. UNITED STATES COURT OF etc.), video games (“Bratz: Girlz Really billion dollar brand because Bryant had an APPEALS FOR THE NINTH CIRCUIT, Rock,” “Bratz: Forever Diamondz,” idea in the last weeks of his job. 2010 U.S. App. LEXIS 26937. “Bratz: Rock Angelz,” etc.) AND Bratz So Now What? This opinion was written by Chief Judge the movie. Well, you’re back with copyright viola- Alex Kozinski who was considered one of the The Appeal great brains of copyright. See “Bet You Missed tions. It” in this issue for a brief description of how A constructive trust transfers wrongfully The jury had been quite astute, sending the he was driven off the bench. held property to its rightful owner. Communist judge a note asking if it could find that only the Party of U.S. v. 522 Valencia, Inc., 35 Cal. first generation of Bratz dolls were infringing. Carter Bryant worked in the Mattel App. 4th 980 (1995). “Barbie Collectibles” department designing And he said they could. And they found dam- fashion and hair styles for high-end collector That case name should grab your attention. ages of $10 million, a mere bagatelle. dolls. In a lightbulb moment, he conceived of It’s a fight over ownership of real estate. What? The judge didn’t care for this and made Bratz dolls — urban, multiethnic and with a I thought commies believed in sharing! his own finding of infringement leading to the … well … bratty attitude. Bryant’s Mattel contract had him assign- constructive trust. He pitched his idea to MGA Entertain- ing all “inventions” to the company and stated The Ninth Cir. held that Mattel only owned ment, a Mattel competitor. They loved it. He the term “includes, but is not limited to, all copyright in the original sketches and the gave two weeks notice to Mattel. discoveries, improvements, processes, devel- sculpt with bratty expression — not the idea opments, designs, know-how, data computer In no time, the “anti-Barbie” began to crush of a bratty doll. Mattel could not own the programs and formulae, whether patentable its rival. By 2005, the Bratz line had revenues idea of young, hip, female fashion dolls with or unpatentable.” of $800 million while Mattel steadily descend- exaggerated features. ed to $445. That will tend to get the attention The Ninth Circuit chewed over whether The district court needed to take another of the suits in the top floor suites. And the “ideas” were in the list, but decided it was a look and determine if each doll (“Bratz Wild attack-dog lawyers are just a phone call away. jury question for remand. Wild West Fianna,” “Bratz Funk ‘N’ Glow And you can already see what’s coming. It did, however, find the constructive trust Jade” et al.) is like (substantially similar) or You know darn well Bryant was under a con- was way too broad. The value Mattel would different from the original sketches. It could tract where every thought he had belonged to be getting had been made much, not have found that the vast Mattel. But he just couldn’t quite see leaving much greater than Bryant’s majority of the dolls were at until his bases were covered. little sculpt and the name all like the sketches unless it relied on the similarity of And of course MGA knew Bryant had “Bratz.” As you can see from the list of ideas — big-headed, attitu- been under contract to Mattel, and did its dinous mall rats. best to conceal his employment. Besides, he products, there was claimed he designed Bratz when he was on all that designing, See: Cases of Note, a hiatus from Mattel and, by golly, his mom investment and mar- Vol. 30-1, p.52 for a would testify to it. keting. discussion of the whole Should I defraud substantial similarity But the Bratz line “The Girls With a Passion thingy. for Fashion” was a juggernaut and a badly you of stock that ris- frightened Mattel did some snooping. es in market value, I The retrial did not can’t complain that you go well for Mattel. “Wasn’t what’s-his-name in accessory de- get that benefit when you take it back. But MGA had gotten in claims of trade secret sign one of ours? Where did he go exactly?” “[w]hen the defendant profits from the wrong, theft by Mattel. The jury decided Mattel had The truth came out, and Mattel sued. it is necessary to identify the profits and to re- not proven copyright violations but instead In the final two weeks ofBryant’s Mattel capture them without capturing the fruits of the had stolen trade secrets and awarded MGA employment, he had done a “sculpt” — a defendant’s own labors or legitimate efforts.” $88.5 mil which the judge bumped up to $310 mannequin-like plastic doll body and coined Dan B. Dobbs, Dobbs Law of Remedies: Dam- million. the name “Bratz.” ages-Equity-Restitution § 6.6(3) (2d ed. 1993). MGA claimed Mattel had an 11-page The trial court really slammed MGA, grant- Gosh-a-rootie. Dobbs was my Torts prof “How to Steal” manual and lied its way into ing Mattel a constructive trust over everything way back in the UNC Law days of yore. And private showings for retailers to get advance with Bratz in it. That included — ready? —: a fabulous prof he was. knowledge of MGA’s toys. www.giftsanddec. Bratz dolls (Bratz, Bratz Boyz, Lil’ Bryant was only a minor cog in a machine com/.../485187-mga-entertainment-sues-mat- Bratz, Bratz Lil’ Angelz, Bratz Petz, that took the “Bratz” name and idea and ran tel-over-trade-secrets. Bratz Babyz, Itsy Bitsy Bratz, etc.), doll with it. First generation (Cloe, Yasmin, Sasha See also: tsi.brooklaw.edu/cases/mga-en- accessories (Bratz World House, Bratz and Jade), second (Ciara, Dana, Diona, Felicia, tertainment-inc-v-mattel-inc-et-al Fianna etc.). Cowgirlz Stable, Bratz Spring Break continued on page 43 42 Against the Grain / April 2018
And Business Insider reports that lawyers have done very well from all this having raked in “hundreds of millions” in hourly billings. www.businessinsider.com/bratz- mattel-lawsuit-2011-8. And what of Carter Bryant? The latest on him is from 2013 when he designed “Pinkie Cooper and the Jet Set Pets,” 9-inch fashioni- stas that are human but with a cocker spaniel’s face for a toymaker named Bridge Direct. Money.cnn.com/2013/02/04smallbusiness/ bratz-dolls-pinkie-cooper/index.html. The line died within a year, but the internet has many entries by grieving doll collectors. Isaac Larian, 82% MGA owner, is an Irani- an Jewish immigrant who became a billionaire through toys. Singing Bouncy Baby, rejected by Mattel, became his first hit in 1997. Larian’s 2013 line, Lalaloopsy — rag dolls with button eyes and names like Lalaloopsy- Oopsy Princess Anise — took in $350 mil in revenue that year while Bratz had dropped to $50 mil. www.forbes.com/.../the-toy-mogul- who-became-a-billionaire-through-his-fight- to-the-death-with-Barbie.
Against the Grain / April 2018
QUESTION: A public librarian in Mon- that a copyright owner would object to such Professor Townsend Gard for her outstanding tana asks about the recent dispute involving recording in the classroom if the book were work and to the Internet Archive! the use of a photograph in a political cam- not available in audio format. QUESTION: A science teacher asks paign without permission. QUESTION: A publisher asks whether whether tables are copyrightable. ANSWER: Photographer, Erika Peter- ECG tracings are copyrightable. If not, does ANSWER: Typically, tables are not copy- man, sued the Republican National Com- this mean than they may be used by anyone? rightable. Tables that simply present data in a mittee claiming unauthorized use of one of her ANSWER: The short answer is no. Facts straightforward grid are not copyrightable. If photographs in a political mailing attacking the are not copyrightable. If the presentation of the table uses words rather than Arabic num- Democratic candidate for Congress. One of her facts has some creativity, there may be thin bers, there may be some originality/creativity clients is the Montana Democratic Party and copyright protection, but that is all. It appears in the text that may create a thin copyright. she contracted to take photographs at a dinner that for ECG tracings, the machine itself always That smidgen of creativity may create a copy- in Helena. She registered the copyright in presents the data in the same format, thus rightable work, but this does not mean that the photographic portrait of the candidate in eliminating any originality/creativity. Further, someone else could not present the data with May 2017 and gave limited use rights to the the 2017 Compendium of U. S. Copyright Of- new text or in a different format and that table Democratic Party. Peterman then learned fice Practices, chapter 300, states that works would also be copyrightable. that the RNC had distributed an attack ad in a produced by a machine or mere mechanical QUESTION: A corporate librarian asks mailing that used the photos of the candidate process are not copyrightable if there is no about books published before 1950 that con- without her permission. creative input or intervention by a human tain no notice of copyright. If a publisher The photographer filed suit in the U.S. author. The Compendium then uses as an ex- later republishes the work, may the library District Court in Missoula. The RNC filed a ample medical imaging produced by X-rays, digitize that first edition? motion to dismiss the suit; the court denied the ultrasounds, magnetic resonance imaging or ANSWER: If a work was published before motion in March 2018, holding that there were other diagnostic equipment. 1978 without notice, that work is in the public still factual issues to be determined. Examining The uncopyrightable images may be used domain. This means that anyone is free to the use of the photograph by the RNC, the court by anyone as long as any personally identifiable republish, reproduce or display the work in applied the four-factor fair use test found in information is removed to preserve patient any format. Therefore, as long as the library section 107 of the U.S. Copyright Act. Under privacy, which is required under HIPAA. digitizes the first edition and does not use any the first factor, the court held that the purpose QUESTION: An academic librarian notes additional material that was included in the and character of the use did not favor the RNC, the recent announcement of the Sonny Bono republished version, the library may digitize and the use was only minimally transformative Memorial Collection and asks what makes the work and use the digital version however despite the few lines of text added to the photo. the digitization and distribution of these of it wants. A separate purpose is not the same thing as these work possible. transformation, which is the critical inquiry. QUESTION: An academic librarian asks Transformative use remains a disputed fact at ANSWER: Section 108(h) of the Copy- about the copyright status of the song “We this stage in the case. right Act was added to ameliorate the effects Shall Overcome.” of extending the term of copyright with the ANSWER: The iconic song was made The second factor, nature of the copyright- Sonny Bono Copyright Term Extension Act of famous during the Civil Rights movement. ed work, focuses on the fact that the work 1998 that changed the term of copyright from Lyrically it is described as being descended is an artistic portrait. This weighs against life plus 50 years to life plus 70. The change from a 1900 hymn published by Charles a finding of fair use. The RNC copied the to the library and archives section of the Act Albert Tindley. The modern song was said entire work under amount and substantiality provided that a library or nonprofit educational to have first been sung in used, the third factor. In addition to copying institution could, during the last 20 years of 1945 in a strike by tobacco the entire work, the qualitative aspects of the a work’s term of copyright, repro- workers in Charleston, portrait were maintained in the RNC use. duce, distribute, display South Carolina. It was There are no facts regarding the fourth factor, or perform the work published in 1947 in market effect. The use may have prejudiced in facsimile or digital the People’s Songs future derivative use of the photograph, but form if the work is no Bulletin by an orga- the pleadings present no such evidence. It is longer available and the purpose of the use is nization directed by Pete Seeger. For years, premature to rule on this factor. The court for preservation, scholarship or research. anyone who wanted to use the melody and thus held that there are disputed issues of lyrics had to pay royalties to Ludlow Music. material fact remaining to determine whether Professor Elizabeth Townsend Gard the RNC’s use was a fair use. Therefore, the at Tulane University Law School and her The publisher has now declared that the matter will go to trial. student interns have created the Sonny Bono lyrics and melody of “We Shall Overcome” are Memorial Collection and scanned some works now in the public domain. This was because of QUESTION: An elementary school teach- that have long been out of print but are still litigation and claims of fraud after a court held er asks whether he can read and record a book in this last 20 years of copyright protection. that the key verse of the song lacked originality. to use as a learning station in the classroom. Moreover, Professor Townsend Gard has The producers of Lee Daniels’ The Butler was ANSWER: Under section 110(1) of the encouraged libraries to scan their works that told it would have to pay $100,000 in royalties Copyright Act, a teacher is allowed to read an fall into the same time span and are no longer for a license fee in order to use the song. Since entire literary work to a class in a nonprofit available on the market. The Internet Archive the 1960s, royalties from the song have been educational institution as part of instruction. has made these works available for download. donated to the nonprofit Highland Research Reading to one individual student or to individ- The Internet Archive has also promised to and Education Center that provides scholar- uals sequentially would also be covered under host works in the last 20 years of copyright ships within African American communities. section 110(1). Recording is not mentioned protection that libraries have identified as no Now all may use it freely. in that section, however. It seems unlikely longer being available. Congratulations to
44 Against the Grain / April 2018