The scene is an office in Van Nuys, 2001. Isaac Larian, owner of a small toy company named MGA, is sitting at his desk, staring at a sketch of a doll. He’s been given this drawing by Carter Bryant, a man who wants to release a toy that can compete with Barbie, but Larian can’t make sense of the figure on the paper in front of him. He finds it both “weird” and “ugly.”
In the same office is Larian’s daughter Jasmin. It occurs to Larian that Jasmin is eleven years old — squarely in the middle of Barbie’s target demographic — and so he asks her what she thinks of the drawing. Her eyes light up. She calls it “cute.”
Immediately, Isaac Larian decides to put the doll into production. MGA makes four versions of the doll and calls them Bratz.
This is how Bratz, the sometimes controversial toy for young girls, first came into being. In the space of five years, MGA sold 125 million units and became the first so-called “fashion doll” to significantly challenge Barbie in the marketplace.
But there was a problem. Carter Bryant was once a Mattel employee and Mattel, of course, owns Barbie. They took MGA to court, alleging that Bryant invented Bratz while working for them. They noted that, in his Employment Agreement, he had agreed that any intellectual property he created “at any time during [his] employment” at Mattel was in fact Mattel’s property. And although Mattel first won their case (and in turn, wholesale ownership of the entire Bratz line), an appeals court found that the employment agreement was too vague and sent the case back to a federal jury. Earlier this year, that jury decided that Bratz were Bryant’s intellectual property and MGA was back in business, continuing to eat away at Barbie’s once insurmountable dominance of the fashion doll market.
But why did Bryant and MGA win? Why don’t all artists own what they create while employed at a larger company? And most importantly, what does it mean to you as a business owner or a creative professional?
Let’s find out.
Why Mattel Doesn’t Own Bratz
Bryant’s employment agreement stated that Mattel owned any intellectual property he created “at any time during [his] employment at the company.” Mattel argued that this included what Bryant invented during his off hours and creations that were outside the scope of his employment. Basically, this means Mattel was arguing that anything Bryant created while he was their employee was their property.
A jury rightly rejected this claim.
First off, Mattel could not prove that Bryant created Bratz during work hours at Mattel. Moreover, they had hired him to develop fashion for existing dolls, not to develop new ones.
That second point is quite important.
Think about it like this: if a designer is hired to create a wine label, should the winery own the fine art she makes on the side? How about if she makes her own wine? MGA’s argument was simply that a company can’t claim to own the entirety of a person’s ideas while under their employ. Since Bryant created a new doll and wasn’t hired by Mattel to do so, they had no legitimate claim on that creation.
Why Marvel Owns Jack Kirby’s Comic Book Characters
A recent ruling against Jack Kirby’s heirs is what inspired this article. Recently, Kirby’s heirs sued Marvel for ownership of the characters he created, including Spider Man, the Incredible Hulk, and the X-Men. If Jack Kirby dreamed up these iconic superheroes, they argued, he should have owned them.
Not so fast, the court said. Kirby’s characters were created while he was employed by Marvel expressly to draw and create comic books. The “made for hire” clause in the Copyright Act of 1976 spells this out plainly.
In other words, Kirby was hired by a comic book company to draw and create comic book superheroes. If Kirby would have painted, say, a fine art landscape that was appraised for millions, Marvel would have an extremely difficult time claiming ownership of that painting. But the company hired him to make comic books and he did so, very successfully. Thus, Marvel owns what Kirby dreamed up.
What This Means for Business Owners
Every business owner should have an Employee Agreement for every employee. That agreement, among other things, spells out pay structures, vacation time, and internal policies. If your employees are going to create intellectual products, you should strongly consider having them sign an Employee Invention Agreement as well. This agreement can strengthen your right to your employee’s intellectual works if you’ve expressly hired them to create such works.
Just keep in mind the Bratz and Marvel cases. If you hire a writer for your company, you can’t assert ownership over a novel she writes in her spare time. But if you’ve hired an engineer and she creates code for your website, you own that code, as she’s working specifically within his job description.
What This Means for Employees
The Bratz ruling actually strengthened existing precedent for employees. Namely: a company only owns the intellectual property it has specifically hired someone to create. What the employee creates in their spare time, outside of the umbrella of their job duties, is the employee’s creation and their intellectual property.
Don’t forget that the reverse is also true. For myself, that means I do not own this blog post, since I was hired to write blog posts. If you’re hired as a clothing designer, the company that hired you owns the design. It’s fairly simple, really.
Keep in mind that employees can include inventions they’ve already created in an Employee Invention Agreement, in order to prevent the employer from making ownership claims to any pre-existing works at a later date. Any innovations, designs, or content the employee created prior to signing can and should be exempted from the hiring party’s ownership.
A Brief Word About Contractors
If you’re a contractor or if you’re hiring a contractor, it’s always a good idea to put the particulars of the job into writing, including intellectual property ownership. If you’re hiring a freelance writer or photographer or, really, any contractor, make sure you decide up front who will own the creation. You can do this via a Work for Hire Agreement or an Independent Contractor Agreement.
The take away? Make sure you know and put in writing who owns creative products. After all, some ideas — even one as seemingly innocuous as Carter Bryant’s “weird” and “ugly” sketch of a doe-eyed teenaged doll — can be worth billions of dollars.
To get more help protecting your creative works (especially if you think they are going to be worth big bucks someday) speak to an attorney.
- Boom! Pow! Marvel Uses Loophole to Save Superheroes (legallyeasy.rocketlawyer.com)
- The Empire Strikes Back: Stormtroopers Win their Freedom (legallyeasy.rocketlawyer.com)
- Building a Brand: How and Why to Use a Trademark (press.rocketlawyer.com)
- Harry Potter and the Chamber of Lawsuits (legallyeasy.rocketlawyer.com)
- Mattel Loses Appeal Ruling Over Ownership of MGA’s Bratz Dolls (businessweek.com)