Posts Tagged ‘copyright infringement’

While most employees do not have employment contracts and are employees at will, for those of you who have employment contracts, it is important to have them reviewed and negotiated prior to your employment and not once a dispute arises when it is sometimes too late to address the situation. Even where it can be addressed through litigation, you can be talking about quite a bit of time and money that could have been avoided with a little proactive contract drafting.

One recent example of the types of litigation that can evolve over employment contracts is the ongoing dispute between the inventor of the Bratz dolls and his former employer Mattell.

In Mattel, Inc. v. MGA Entertainment, Inc., the Ninth Circuit Court of Appeals recently vacated the trial court’s judgment awarding Mattel ownership rights to the Bratz brand of dolls. This decision was reached, in part, on a finding that the trial court erred in ruling that the employment agreement between Mattel and former employee Carter Bryant, assigned Bryant’s “ideas” to Mattel.

The dispute between Mattel and MGA arose out of Bryant pitching his idea for Bratz to MGA while he was still employed by Mattel. Once Mattel discovered that Bryant originally conceived the Bratz idea while employed by Mattel, Mattel filed suit against MGA and Bryant alleging theories of copyright infringement and breach of the employment agreement.

The Ninth Circuit analyzed Bryant’s employment agreement with Mattel to determine if the assignment of inventions contained in the agreement included Bryant’s ideas. As detailed in the employment agreement, Bryant agreed to “communicate to [Mattel] as promptly and fully as practicable all inventions . . . conceived or reduced to practice by me (alone or jointly by others) at any time during my employment. I hereby assign to the Company . . . all my right, title and interest in such inventions, and all my right title and interest in any patents, copyrights, patent applications or copyright applications based thereon.” The employment agreement went on to specify that “the term ‘inventions’ includes, but is not limited to, all discoveries, improvements, processes, developments, designs, know-how, data computer programs and formulae, whether patentable or unpatentable.” Based on that language, the trial court found that the employment agreement assigned Bryant’s “ideas” to Mattel, even though the word “idea” was not listed in the definition of “inventions.”

In reversing the trial court’s decision, the Ninth Circuit noted that there was ambiguity in Bryant’s employment agreement. The Ninth Circuit reasoned that, even though the employment agreement could be read to include ideas, the text of the agreement does not necessarily compel such a reading. Under contract law, where a contract term is ambiguous the parties are supposed to be given an opportunity to present evidence as to the intent of the parties in drafting the contract. Because the trial court did not allow the parties to present evidence of the parties intent to the jury, the Ninth Circuit reversed the trial court’s rulings and remanded it. What does that mean? Means the parties get to do it all over again in the trial court.

The moral of the story is make sure that you have a clear unambiguous employment agreement with your employer to avoid disputes later on down the road.