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Ninth Circuit Holds That Even Brats Deserve Equitable Treatment
Many companies require their employees to sign agreements that any inventions they create “during the course of their employment” will belong to the employer. Such agreements are a reaction to patent law, under which (unless someone is hired expressly for the purpose of inventing something) title to a patent vests in the inventor even if he creates the patent in the course of his employment. Many such agreements do not address ownership of copyrighted works because under the work made for hire doctrine, the copyright in any work created by a bona fide employee automatically vests in the company. Additionally, because it is axiomatic that one cannot copyright ideas but only the particular expression of an idea, there is sometimes a misconception that one cannot “own,” and therefore cannot assign, an idea. Finally, the common wisdom has also been that an assignment of trademarks developed by an employee is unnecessary because trademark rights only vest when a mark is used in commerce, or if one has a bona fide intent to use a mark in commerce and files a trademark application.
Mattel Inc. v. MGA Entertainment, Inc., a recent case decided by the Ninth Circuit, however, illustrates why companies should revisit such agreements in order to ensure that the ideas developed by their employees may not be exploited by those employees to the detriment of their employer. It also brings into sharp focus the question of how the principles of equity should apply in trademark and copyright cases where the use of the trademarks for a new product line may constitute trademark infringement, and the creation of the first products may constitute copyright infringement, but the product line evolves to include many other trademarks and copyrighted works.
The Rights to Bratz
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