Intellectual Property

9th Circuit Rules for Bratz Doll Maker MGA, Says It’s Entitled to ‘Sweat Equity’

A federal appeals court has vacated an injunction barring MGA Entertainment from selling Bratz dolls or using the name in a hard-fought infringement and contractual rights case brought by Mattel Inc., the company known for its Barbie dolls.

The San Francisco-based 9th U.S. Circuit Court of Appeals said the remedy was too broad, the Recorder reports. A jury in the original case had awarded Mattel $100 million after finding that Carter Bryant, the designer of the Bratz dolls, thought of the concept while he was working at Mattel. Jurors also had found that Bryant thought of the “Bratz” name as well as the name “Jade” for one of the original Bratz dolls while he was still at Mattel.

Writing for the three-judge panel, Chief Judge Alex Kozinski said the trial judge should not have ordered MGA to transfer all products, proceeds and other assets to a trust created for Mattel, the Los Angeles Times reports. The opinion (PDF) found that MGA developed the dolls and was entitled to “sweat equity.”

Kozinski also said the trial judge erred when he ruled Bryant’s employment agreement with Mattel clearly covered ideas, since the terms of the contract were ambiguous.

“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,” Kozinski wrote. “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.”

The 9th Circuit ruling may force a retrial, the Wall Street Journal Law Blog reports.

Above the Law took its quote of the day from the opinion: “America thrives on competition; Barbie, the all-American girl, will too.”

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