Bratz dolls may no longer be made by toy-maker MGA Entertainment after a ruling yesterday in a California federal court. The reason? A designer MGA used for the cartoonish yet scantily clad dolls for young girls was on contract for Mattel when he worked on the Bratz designs. As the downturn (and hopefully upturn) causes employment shifts, new employees and especially businesses that hire them should take care not to use work from a past job.
Doll designer Carter Bryant worked for Mattel for two stints -- from 1995 to April 1998 and then from January 1999 to September 2000, as reported by the BBC. In the legal saga following the Bratz power grab from Barbie and the toy giant Mattel, MGA insisted that Bryant came up with the Bratz idea while unemployed between his stints at Mattel. A California jury found otherwise last August. Carter Bryant settled with Mattel, and subsequently Mattel won a $100 million jury verdict. As the AP reports, yesterday's ruling rejected MGA's attempt to reduce the award, and order the Bratz brand and MGA assetts into receivership.
$90 million of the $100 million award was for intentional interference with the designer's contract with Mattel. Under his contract, Mattel was entitled to his doll designs while he worked for them. By hiring Bryant and using the designs he contractually owed to Mattel, MGA wound up losing its billion dollar Barbie nemesis.
The lesson for employees on the move and their new bosses is do not use plans or designs from the old job. Even if the plan was never implemented at the old job, often the employer at the time owns it. Though it can be modified by employment contract, the general rule is that employers own the intellectual property created by employees in the scope of their employment. Even if the employee's job has nothing to do with inventing, employers get what's called a "shop-right" to license patents on employee inventions. Often, employers make this explicit with intellectual property assignment agreements in which the employee agrees that works created during employment belong to the employer (as Mattel apparently did with Carter Bryant).
The Barbie vs Bratz tale shows how important this can be when competition turns fierce. However, even if new hires aren't recruited away from their old job, their new bosses should take care that they don't use material from their old job.
- After Ruling, Bratz Dolls Might Not Be Long for the Shelves (WSJ's Law Blog)
- Hair-Pulling In The Dollhouse (Business Week 2005)
- Hiring Employees FAQ (FindLaw)
- Non-Compete Agreements (provided by the Law Offices of Gary A. Costales, PA)