Case 2:04-cv-09049-DOC-RNB Document 9572 Filed 01/01/11 Page 1 of 30 Page ID
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`
`ANNETTE L. HURST (State Bar No. 148738)
`ahurst@orrick.com
`WARRINGTON S. PARKER III (State Bar No. 148003)
`wparker@orrick.com
`ORRICK, HERRINGTON & SUTCLIFFE LLP
`The Orrick Building
`405 Howard Street
`San Francisco, CA 94105
`Telephone: 415-773-5700
`Facsimile: 415-773-5759
`WILLIAM A. MOLINSKI (State Bar No. 145186)
`wmolinski@orrick.com
`ORRICK, HERRINGTON & SUTCLIFFE LLP
`777 South Figueroa Street, Suite 3200
`Los Angeles, CA 90017
`Telephone: 213-629-2020
`Facsimile: 213-612-2499
`THOMAS S. McCONVILLE (State Bar No. 155905)
`tmcconville@orrick.com
`ORRICK, HERRINGTON & SUTCLIFFE LLP
`4 Park Plaza, Suite 1600
`Irvine, CA 92614-2258
`Tel: (949) 567-6700/Fax: (949) 567-6710
`Attorneys for MGA Parties and IGWT 826
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`SOUTHERN DIVISION
`CARTER BRYANT, an individual
`Case No. CV 04-9049 DOC (RNBx)
`Consolidated with Case No. CV 04-9059
`Plaintiff,
`and Case No. CV 05-2727
`
`v.
`MATTEL, INC., a Delaware
`corporation,
`
`Defendant.
`
`AND CONSOLIDATED ACTIONS
`
`Hon. David O. Carter
`MGA PARTIES’ MOTION FOR
`RECONSIDERATION OF THE
`COURT’S SUMMARY JUDGMENT
`RULING REGARDING COPYRIGHT
`PREEMPTION OF THE BRATZ
`DRAWINGS AND SCULPTS TRADE
`SECRETS OR, IN THE
`ALTERNATIVE, FOR
`CERTIFICATION OF THE
`PREEMPTION RULING FOR
`INTERLOCUTORY APPEAL
`Date: TBD
`Time: TBD
`Place: 9D
`Trial Date: January 11, 2011
`
`MOTION FOR RECONSIDERATION OR CERTIFICATION OF
`INTERLOCUTORY APPEAL RE COPYRIGHT PREEMPTION
`CV 04-9049-DOC (RNBX)
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`TABLE OF CONTENTS
`
`Page(s)
`INTRODUCTION..................................................................................................... 1
`NEW FACTS AND LAW WARRANTING RECONSIDERATION...................... 2
`A.
`The Summary Judgment Order ............................................................. 2
`B.
`The Damages Reports And Analysis..................................................... 3
`ARGUMENT............................................................................................................. 3
`I.
`SECTION 301 EXPRESS PREEMPTION APPLIES TO THE
`BRATZ TRADE SECRET CLAIM...................................................... 5
`A. Mattel’s Bratz Trade Secret Claim Covers Material That Comes
`Within The Subject Matter Of Copyright ............................................. 5
`The Rights Asserted By Mattel In Its Trade Secret Claim Are .............
`“Equivalent” To The Rights It Asserts Under Copyright. .................... 6
`“Secrecy” Is Not An Extra Element...................................................... 7
`
`B.
`
`C.
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`1.
`
`2.
`
`3.
`
`The Copyright Act Specifically Governs Secret Works By
`Controlling The Right Of First Publication ................................ 8
`The Alleged Implied Duty Upon MGA Regarding
`“Secret” Information Is Not An Extra Element .......................... 9
`Alleged Knowledge Or Intent Of MGA Regarding
`“Secret” Information Is Not An Extra Elemen ......................... 11
`Under Mattel’s Theory Regarding MGA, There Is No Legally
`Sufficient Extra Element Alleged And The Authority Relied
`Upon By The Court Is Not To The Contrary. ..................................... 13
`Congress Intended That Section 301 Avoid The Creation Of
`“Borderline” Rights Of The Type Created Under Mattel’s
`Theory And Adopted In The Court’s Summary
`Judgment Order ................................................................................... 14
`ALLOWING MATTEL’S CLAIM TO PROCEED MERELY BASED
`ON “SECRECY” OF THE ASSERTED MATERIALS CONFLICTS
`WITH THE STATUTORY OBJECTIVE AND IS THUS SUBJECT
`TO CONFLICT PREEMPTION................................................................... 15
`A.
`The Reasoning Of The Court’s Order Conflicts With Congress’
`Objective Of Harmonizing State Law Regarding Unpublished
`Works In A Single Federal Copyright Act.......................................... 17
`The Order Conflicts With Congress’ Objective Of Section
` 102(b) Which Denies Protection To “Concepts” Or “Ideas” For
` Copyrighted Works.. .......................................................................... 18
`
`D.
`
`E.
`
`B.
`
`II.
`
`- i
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`MOTION FOR RECONSIDERATION OR CERTIFICATION OF
`INTERLOCUTORY APPEAL RE COPYRIGHT PREEMPTION
`CV 04-9049-DOC (RNBX)
`
`

`

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`III
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`ALTERNATIVELY, THE COURT SHOULD CERTIFY ITS
`RULING REGARDING COPYRIGHT PREEMPTION FOR
`IMMEDIATE INTERLOCUTORY APPEAL PURSUANT TO
` 28 U.S.C. §1292(b)............................................................................. 19
`A.
`The Preemption Ruling Presents Controlling Issues Of
`Law. ........................................................................................... 19
`The Preemption Ruling Involves Questions Reasonably In
`Dispute....................................................................................... 21
`Certification Of An Interlocutory Appeal And A Stay Of
`Trial Pending Resolution Of That Appeal Will Expedite
`The Ultimate Resolution Of This Case. .................................... 21
`CONCLUSION ......................................................................................................... 3
`
`B.
`
`C.
`
`- ii -
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`MOTION FOR RECONSIDERATION OR CERTIFICATION OF
`INTERLOCUTORY APPEAL RE COPYRIGHT PREEMPTION
`CV 04-9049-DOC (RNBX)
`
`

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`TABLE OF AUTHORITIES
`
`Page(s)
`
`FEDERAL CASES
`Aargard v. Palomar Builders, Inc.,
`344 F. Supp. 2d 1211 (E.D. Cal. 2004).............................................................. 12
`Ass'n of Irritated Residents v. Fred Schakel Dairy,
`634 F. Supp. 2d 1081 (E.D. Cal. 2008).............................................................. 22
`Atrium Group de Ediciones y Publicaciones, S.L. v. Harry N. Abrams, Inc.,
`565 F. Supp. 2d 505 (S.D.N.Y. 2008)................................................................ 11
`In re Cement Antitrust Litig.,
`673 F.2d 1020 (9th Cir. 1982) aff'd 459 U.S. 1190 (1983)................................ 19
`Compco Corp. v. Day-Brite Lighting, Inc.,
`376 U.S. 225 (1964) ........................................................................................... 11
`Dastar Corp. v. Twentieth Century Fox Film Corp.,
`539 U.S. 23 (U.S. 2003) ............................................................................... 16, 17
`Del Madera v. Rhodes and Gardner, Inc.,
`820 F.2d 973 (9th Cir. 1987)........................................................................ 10, 14
`Eagan v. CSX Transportation Inc.,
`294 F. Supp. 2d 911 (E.D. Mich. 2003)............................................................. 21
`Ehat v. Tanner,
`780 F.2d 876 (10th Cir. 1986)...................................................................... 11, 14
`Entous v.Viacom Int'l Inc.,
`52 U.S.P.Q. 2d 1628 (C.D. Cal. 2001)....................................................... 5, 6, 18
`Entous
`58 U.S.P.Q. 2d at 1634-35............................................................................ 10, 14
`Firoozye v. Earthlink Network,
`153 F. Supp. 2d 1115 (N.D. Cal. 2001) ............................................................. 13
`Fischer v. Viacom Int'l, Inc. et al.,
`115 F. Supp. 2d 535 (D. Md. 2000) ............................................................. 11, 14
`Goldstein v. California,
`412 U.S. 546 (1973) ........................................................................................... 16
`Harper & Row Publishers, Inc. v. Nation Enterprises,
`471 U.S. 539 (1985) ............................................................................................. 9
`Harper & Row Publishers, Inc. v. Nation Enters.,
`723 F.2d 195 (2d Cir. 1983), rev'd on other grounds, 471 U.S. 539 (1985) . 7, 12
`Idema v. Dreamworks, Inc. et al.,
`
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`MOTION FOR RECONSIDERATION OR CERTIFICATION OF
`INTERLOCUTORY APPEAL RE COPYRIGHT PREEMPTION
`CV 04-9049-DOC (RNBX)
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`162 F. Supp. 2d 1129 (C. D. Cal. 2001)............................................................. 10
`Jones v. Rath Packing Co.,
`430 U.S. 519 (1977) ....................................................................................... 4, 16
`Kiwanee Oil Co. v. Bicron Corp.,
`416 U.S. 470 (1974) ........................................................................................... 16
`Klinghoffer v. S.N.C. Achille Lauro,
`921 F.2d 21 (2d Cir. 1990)........................................................................... 20, 21
`Laws v. Sony Music Entm't, Inc.,
`448 F.3d 1134 (9th Cir. 2006).......................................................................... 4, 6
`Mediterranean Enters. v. Ssangyoung Corp.,
`708 F.2d 1458 (9th Cir. 1983)............................................................................ 22
`Montz v. Pilgrim Films & Television et al.
` (9th Cir. Docket No. 08-56954) .................................................................. 20, 21
`Motown Record Corp. v. George A. Hormel & Co.,
`657 F. Supp. 1236 (C.D. Cal. 1987)................................................................... 12
`Orson, Inc. v. Miramax Film Corp.
`189 F.3d 377 (3rd Cir. 1999).......................................................................... 4, 16
`S.O.S., Inc. v. Payday, Inc.,
`886 F.2d 1081 (9th Cir. 1989)............................................................................ 13
`Sears, Roebuck & Co. v. Stiffel Co.,
`376 U.S. 225, 229 (1964) ................................................................................... 16
`Selby v. New Line Cinema Corp.,
`96 F. Supp. 2d 1053 (C.D. Cal. 2000)................................................5, 10, 14, 18
`Trandes Corp. v. Guy F. Atkinson Co.,
`996 F.2d 655, 660 (4th Cir. 1993)...................................................................... 14
`
`Worth v. Universal Pictures, Inc.,
`5 F. Supp. 2d 816 (C.D. Cal. 1997).................................................................... 12
`FEDERAL STATUTES
`17 U.S.C. §104(a)-(b)................................................................................................ 9
`28 U.S.C. § 1292(b).................................................................................1, 19, 21, 22
`H.R. Rep. No. 94-1476 at pg 129-130 (1976)............................................... 9, 15, 18
`
`STATE STATUTES
`Civ. Code § 3426.1 ................................................................................................. 11
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`MOTION FOR RECONSIDERATION OR CERTIFICATION OF
`INTERLOCUTORY APPEAL RE COPYRIGHT PREEMPTION
`CV 04-9049-DOC (RNBX)
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`Case 2:04-cv-09049-DOC-RNB Document 9572 Filed 01/01/11 Page 6 of 30 Page ID
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`NOTICE OF MOTION AND MOTION
`TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD;
`PLEASE TAKE NOTICE THAT, at a date and time to be set by the Court,
`the MGA Parties will and hereby do move for reconsideration pursuant to Local
`Rule 7-18 of the Court’s December 27, 2010 summary judgment order denying
`copyright preemption of Mattel’s trade secret misappropriation claim concerning
`Bratz drawings and dummy dolls/prototypes or, in the alternative, moves for an
`order certifying the Court’s order denying copyright preemption of the Bratz trade
`secret claim for immediate interlocutory appeal pursuant to 28 U.S.C. § 1292(b)
`and a stay of the trial pending such interlocutory appeal.
`Reconsideration is warranted on two grounds: first, there is new evidence
`and law that was not available at the time the motion for summary judgment was
`filed in the form of (a) the Court’s order itself as to the copyright claim, and (b)
`facts set forth in Mattel’s damages expert report and deposition that occurred after
`the summary judgment filing deadline; second, in all events the order was legally
`erroneous with respect to the issue of copyright preemption of trade secrets.
`Alternatively, certification of the copyright preemption issue for
`interlocutory appeal pursuant to 28 U.S.C. 1292(b) and a stay of trial pending
`appeal is warranted as the issue plainly presents a controlling question of law, there
`is substantial ground for difference of opinion, and an immediate appeal will
`materially advance the ultimate termination of the litigation. Further, a stay is
`appropriate as determination of this critical issue on appeal will define and change
`the course of the litigation. To deny a stay would result in serious waste of the
`Court’s and parties’ resources, given that any subsequent appeal would require yet
`another retrial.
`This motion is based on this Notice, the accompanying Memorandum of
`Points and Authorities, the parties’ summary judgment briefing, the Court’s
`summary judgment order, the expert report of Michael Wagner and deposition of
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`MOTION FOR RECONSIDERATION OR CERTIFICATION OF
`INTERLOCUTORY APPEAL RE COPYRIGHT PREEMPTION
`CV 04-9049-DOC (RNBX)
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`Michael Wagner, and expert report of James Malackowski found at Docket Nos.
`9478, Ex. 71 and 9367, Ex. 2, the other papers, pleadings, and documents on file
`with the Court, and such further matters as may be presented to the Court prior to or
`at the time of the hearing on this motion.
`Certificate of Compliance
`Lead counsel met and conferred regarding these motions on December 31,
`
`2010.
`
`Dated: January 1, 2011
`
`Respectfully submitted,
`ORRICK, HERRINGTON & SUTCLIFFE LLP
`By: /s/ Annette L. Hurst ____
`Annette L. Hurst
`Attorneys for MGA ENTERTAINMENT, INC.,
`MGA ENTERTAINMENT HK, LTD., MGA de
`MEXICO, S.R.L. de C.V., and ISAAC LARIAN
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`MOTION FOR RECONSIDERATION OR CERTIFICATION OF
`INTERLOCUTORY APPEAL RE COPYRIGHT PREEMPTION
`CV 04-9049-DOC (RNBX)
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`INTRODUCTION
`The Court has now definitively ruled that Mattel’s copyright claim is limited
`to six Bratz female dolls. That Order is based on the Court’s holding that MGA did
`not copy original elements of the Bryant Bratz drawings as to the remaining dolls.
`Mattel’s copyright claim is now worth no more than a maximum of $28M under
`this legally correct analysis. But the remainder of the Court’s Order seemingly
`gives back to Mattel an overweening damages claim in excess of $1.1B expressly
`ruled out under the Copyright Act, simply by recharacterizing the very same
`allegations as a trade secret claim. This makes no sense. If MGA did not copy
`original elements either because those elements were not original or because they
`were ideas and not protectable expression, then MGA did not use any Mattel trade
`secret (even assuming Mattel had one). The Court’s order appears to stand for the
`proposition that Mattel can recover all of the value in Bratz (translated by Mattel’s
`damages expert as more than $1.1B) for purported misappropriation of a bratty doll
`idea when that result would be absolutely prohibited by Section 102(b) of the
`Copyright Act and has been already rejected by the Ninth Circuit in this very case.
`This is a result that plainly cannot stand.
`If the Court denies reconsideration, then it should grant an order certifying
`the denial of copyright preemption of Mattel’s Bratz trade secret claim for
`immediate interlocutory appeal pursuant to 28 U.S.C. § 1292(b) and staying the
`trial pending such appeal. The Court’s Order denying copyright preemption of the
`Bratz trade secret is now the central legal question of the case governing the scope
`of the second trial and a swing of more than $1.1B in damages rests on this single
`legal ruling. It is inconsistent with the law of the case as previously expressed by
`the Ninth Circuit and other precedents. This issue plainly presents “a controlling
`question of law as to which there is substantial ground for difference of opinion and
`that an immediate appeal from the order may materially advance the ultimate
`termination of the litigation . . .” 28 U.S.C. § 1292(b). Accordingly, it also makes
`
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`MOTION FOR RECONSIDERATION OR CERTIFICATION OF
`INTERLOCUTORY APPEAL RE COPYRIGHT PREEMPTION
`CV 04-9049-DOC (RNBX)
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`no sense to proceed to the second trial pending resolution of this legal question, and
`in fact doing so may deprive MGA of the right to ever obtain appellate review of
`this issue given the potential damages award at stake. Certification of an appeal
`and stay of trial would ensure that this significant, controlling legal issue is
`consonant with Ninth Circuit jurisprudence and would advance ultimate
`termination of the litigation. The last thing any of the parties needs is three trials in
`this case.
`NEW FACTS AND LAW WARRANTING RECONSIDERATION
`A.
`The Summary Judgment Order.
`The Court’s analysis in its Order on MGA’s Motion for Summary Judgment;
`Mattel’s Motion for Partial Summary Judgment; Machado’s Motion for Summary
`Judgment (“Order”) held that Mattel could not prove, as a matter of law, that MGA
`had copied “original elements” of the Bryant Bratz drawings with respect to all but
`six female dolls—the four first-generation Jade, Sasha, Yasmin and Cloe dolls, and
`the later generation Ooh La La Cloe and Formal Funk Dana. Order at 12-29
`(emphasis original). As to all other Bratz products, the Court granted judgment as a
`matter of law under the Copyright Act. Id. at 24-29.
`The Order expressly recognizes that the subject matter forming the basis of
`Mattel’s copyright claim also forms the basis of its trade secret claim. The Court
`defines the purported Bratz trade secret as the contents of the Bratz pitchbook,
`including the drawings and brief character descriptions, as well as the dummy dolls
`brought by Bryant to his pitch meeting with MGA. Order at 30-31.1 This content
`is exactly the same (with the exception of the Margaret Leahy sculpt) as that
`considered by the Court in its copyright analysis. 2 Order at 12. Nonetheless, the
`
`1 Bryant took these dummy dolls back with him the same day. They have never
`been seen again and are not submitted as evidence in this case. (Bryant Depo.,
`164:14-169:17)
`2 The Court uses the word “sculpt” in defining the trade secret but appears to be
`referring to the dummy dolls brought by Bryant to the pitch rather than to the later
`sculpts created by Margaret Leahy. There is no question that MGA hired Leahy, an
`independent sculptor, long after the pitch to create the sculpts. (Dkt. #2755 (Garcia
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`MOTION FOR RECONSIDERATION OR CERTIFICATION OF
`INTERLOCUTORY APPEAL RE COPYRIGHT PREEMPTION
`CV 04-9049-DOC (RNBX)
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`Court held that the trade secret misappropriation claim is not preempted by the
`Copyright Act, concluding that an alleged obligation on Bryant’s part to maintain
`the “secrecy” of the purported Bratz trade secret is an “extra element” sufficient to
`avoid preemption. Order at 71-72 & n.31.
`B.
`The Damages Reports And Analysis.
`On December 1, 2010 after MGA filed its summary judgment motion, Mattel
`served its damages expert report by Michael Wagner. Wagner was deposed on
`December 8 and 10, 2010. Wagner’s report and the rough transcript of his
`deposition were subsequently filed in connection with MGA’s MIL No. 1 and can
`be found at Docket No. 9478 Exs. 71, 72. In the report and his deposition, Wagner
`makes clear that he has calculated a damages number for Mattel’s Bratz copyright
`claim and Bratz trade secret claim that include claims for unjust enrichment, lost
`profits, and royalties for all Bratz products. Wagner expressly premises trade secret
`damages claims on elements that he acknowledged are unprotected and cannot be
`protected under the Copyright Act. The Court’s order limits the value of the
`purported copyright claim to approximately $28M. Under Wagner’s analysis,
`however, the trade secret claim premised upon Bratz will remain in excess of
`$1.1B. Every penny and more that the Court has ruled out as a matter of law under
`the copyright claim will still be sought by Mattel as part of its UTSA claim.
`ARGUMENT
`The Court expressly held that Mattel’s copyright claim was limited to six
`dolls because Mattel could not prove sufficient copying of original elements to
`sustain any other claim. The import of this holding is that the rest of the Bratz
`drawings were unoriginal and unprotectable—in short, ideas that were already out
`in the public domain. That was exactly the holding of the Ninth Circuit in its
`discussion of Mattel’s copyright claim. Slip Op. at 17337-17346. Permitting
`
`
`Decl.) ¶ 12; Leahy Tr. 4128:25-4129:4; Bryant Tr. 2561:22-2562:9; 2563:23-
`2564:3). Thus, such cannot be Mattel’s trade secrets.
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`MOTION FOR RECONSIDERATION OR CERTIFICATION OF
`INTERLOCUTORY APPEAL RE COPYRIGHT PREEMPTION
`CV 04-9049-DOC (RNBX)
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`Mattel to recover all of the value in Bratz for these otherwise unprotectable ideas
`runs directly afoul of the Ninth Circuit’s prior holding and the law of this case. See
`id. at 17331-17333 (“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.”) This aspect of the Order
`cannot stand.
`Section 301(a) of the Copyright Act provides:
`[A]ll legal or equitable rights that are equivalent to any of
`the exclusive rights within the general scope of copyright
`as specified by section 106 in works of authorship that are
`fixed in a tangible medium of expression and come within
`the subject matter of copyright as specified by sections
`102 and 103 … are governed exclusively by this title …
`[N]o person is entitled to any such right or equivalent
`right in any such work under the common law or statutes
`of any State.
`17 U.S.C. § 301(a). Thus, Section 301(a) sets forth two conditions for preemption.
`First, the state law claim must assert rights regarding works that come within the
`general scope of copyright. Second, the rights asserted under state law must be
`“equivalent” to the exclusive rights of copyright owners. Where both conditions
`are satisfied—as is the case here with Mattel’s trade secret claim—a state law cause
`of action is preempted by copyright. See Laws v. Sony Music Entm’t, Inc., 448 F.3d
`1134, 1137-38 (9th Cir. 2006). Part I, infra.
`Moreover, whether or not a claim comes within the scope of Section 301
`using the Ninth Circuit’s governing “extra elements” test, conflict preemption must
`also be considered. See e.g. Jones v. Rath Packing Co., 430 U.S. 519 (1977)
`(applying conflict preemption and finding a state law preempted); Orson, Inc. v.
`Miramax Film Corp., 189 F.3d 377, 386 (3rd Cir. 1999) (state law conflicting with
`copyright law overturned on conflict preemption principles). First, mere “secrecy”
`in asserted material contravenes Congress’ intent to encompass within the federal
`Copyright Act both published and unpublished works. Second, the Court’s ruling
`permits Mattel to create a “borderline” state-law claim covering matter within the
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`MOTION FOR RECONSIDERATION OR CERTIFICATION OF
`INTERLOCUTORY APPEAL RE COPYRIGHT PREEMPTION
`CV 04-9049-DOC (RNBX)
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`scope of copyright, contravening Congress’ intent in creating the federal Act.
`Third, the Court’s ruling allows protection of the “idea” or “concept” of a
`copyrightable work, in direction contravention of Section 102(b) of the Copyright
`Act and thus cannot stand. See Part II, infra.
`I.
`SECTION 301 EXPRESS PREEMPTION APPLIES TO THE BRATZ
`TRADE SECRET CLAIM.
`A. Mattel’s Bratz Trade Secret Claim Covers Material That Comes
`Within The Subject Matter Of Copyright
`As discussed above, there is no dispute that the same subject matter
`regarding the Bratz “concept” sketches and sculpts underlying Mattel’s copyright
`claim is recast by Mattel as the basis of its trade secret claim. The Court recognizes
`this fact in its summary judgment order. Thus, Mattel’s state-law claim asserts
`rights regarding works that come within the general subject matter of copyright and
`the first requirement for copyright preemption is met. See Entous v. Viacom Int’l
`Inc., 52 U.S.P.Q. 2d 1628, 1634-35 (C.D. Cal. 2001) (claim premised on
`defendant’s unauthorized use of creative “ideas and concepts” preempted; “courts
`have consistently held that they fall within the ‘subject matter of copyright’ for
`purposes of preemption analysis”); Selby v. New Line Cinema Corp., 96 F. Supp. 2d
`1053, 1058 (C.D. Cal. 2000) (“ideas embodied in a work covered by the [Act] are
`nevertheless within the subject matter of copyright for purposes of preemption
`because [s]cope and protection are not synonymous”).
`Indeed, it is impossible to separate out what Mattel says was copyrightable
`from what it says is a trade secret. As was observed by the Ninth Circuit, the prior
`art was full of public disclosures of the basic concept of female fashion dolls and
`bratty teens with “exaggerated features” such as big eyes or “oversized head and
`feet.” Slip Op. at 17337-17346. The record before this Court is replete with such
`undisputed prior art evidence.3 Given the extensive prior public disclosures of such
`
`3 See following materials submitted as part of the Appendix of Previously Marked
`Exhibits provided on the hyperlinked drives with the MSJ briefing: Ex. 4958 (slides
`C- 6 – C-19 and C-32 – C-35 illustrate prior art); Ex. 17246-126, 10179-134
`- 5 -
`MOTION FOR RECONSIDERATION OR CERTIFICATION OF
`INTERLOCUTORY APPEAL RE COPYRIGHT PREEMPTION
`CV 04-9049-DOC (RNBX)
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`Case 2:04-cv-09049-DOC-RNB Document 9572 Filed 01/01/11 Page 13 of 30 Page ID
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`elements, what Mattel is asserting as a trade secret is—at most—Carter Bryant’s
`very specific implementation of these ideas which, of course, is exactly the same
`thing as the claimed copyrights that have been largely rejected.
`B.
`The Rights Asserted By Mattel In Its Trade Secret Claim Are
`“Equivalent” To The Rights It Asserts Under Copyright.
`Section 106 of the Copyright Act confers upon copyright owners the
`exclusive right to reproduce, distribute and display original works of authorship, to
`prepare derivative works and to authorize the same. The Ninth Circuit has held:
`To survive preemption, the state cause of action must
`protect rights which are qualitatively different from the
`copyright rights. The state claim must have an extra
`element which changes the nature of the action.
`Laws, 448 F.3d at 1143 (internal quotation marks omitted).
`As an initial matter, preemption analysis does not turn merely on the ability
`to articulate, in the abstract, some “extra element” in a state law cause of action.
`Rather, as the Ninth Circuit confirms, a specific examination of the asserted theory
`is required, in a context, to determine whether the state law cause of action
`“qualitatively … changes” the nature of the action from a copyright claim. Id.
`(emphasis added) For example, this Court has rejected a “categorical rule”
`exempting all claims of a certain type from preemption, noting that “Courts have
`instead adopted a more fact-specific inquiry” into whether a claim asserts rights that
`are equivalent to those in the Copyright Act. See Entous, 52 U.S.P.Q. 2d at 1634-
`35. The summary judgment preemption ruling violates the proper mode of
`analysis, as it holds that trade secret claims are never preempted because such
`require “secrecy,” but fails to examine the actual substance of what Mattel is
`alleging.
`In this case precisely the same material and acts by MGA form the basis of
`
`
`(Editions of Seventeen Magazine published in 1998 and 1999 depict advertisements
`for Paris Blues), Ex. 17246-115, 10179-133 (Steve Madden materials), Ex. 17246-
`016, 17246-017 (Cover Girl materials), Ex. 17246-126 (the Dixie Chicks materials)
`and Ex. 17246-193 (Coca Cola materials)
`- 6 -
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`MOTION FOR RECONSIDERATION OR CERTIFICATION OF
`INTERLOCUTORY APPEAL RE COPYRIGHT PREEMPTION
`CV 04-9049-DOC (RNBX)
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`Mattel’s copyright claim and its trade secret claim. Indeed, the gravamen and
`details of Mattel’s claim is that MGA used and modified material that Mattel claims
`is protected by copyright, without authorization, to create a new line of dolls and
`that such was reproduced, distributed and sold. Accordingly, the rights asserted by
`Mattel under its trade secret theory are not only “equivalent” to its copyright theory,
`but are identical. Thus, the second requirement for copyright preemption is met
`and Mattel’s trade secret theory is preempted. See Harper & Row Publishers, Inc.
`v. Nation Enters., 723 F.2d 195, 200 (2d Cir. 1983), rev’d on other grounds, 471
`U.S. 539 (1985) (equivalency exists if the right defined by state law may be
`abridged by an act which in and of itself would infringe one of copyright’s
`exclusive rights)
`C.
`“Secrecy” Is Not An Extra Element.
`The Court erroneously finds that while Mattel asserts precisely the same
`material and acts as copyright infringement on the one hand and as trade secret
`misappropriation on the other, it may avoid copyright preemption merely because
`trade secret law requires that asserted material be “secret.” Order at 71-72. The
`ruling ignores that the right to maintain the secrecy of a copyrighted work is
`expressly within the scope of Section 106 and therefore directly equivalent under
`Section 301. In doing so, the Court ignores that Congress intended to avoid
`precisely the mischief put forth by Mattel in this case—namely the creation of state-
`law rights wholly redundant of copyright law or which interfere with the
`harmonization of copyright law achieved through the Copyright Act. Failing under
`its copyright theories, Mattel cannot simply point to the same material, call it
`“secret” and emerge with a brand new, yet wholly identical state-law theory, under
`the guise of trade secret law. To hold otherwise is a fundamental error of law. The
`Court should reconsider its copyright preemption ruling and should hold that
`Mattel’s trade secret claim based on the Bratz materials is preempted.
`
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`MOTION FOR RECONSIDERATION OR CERTIFICATION OF
`INTERLOCUTORY APPEAL RE COPYRIGHT PREEMPTION
`CV 04-9049-DOC (RNBX)
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`1.
`
`The Copyright Act Specifically Governs Secret Works By
`Controlling The Right Of First Publication.
`
`The addition of a purported “secrecy” obligation on the part of Bryant to
`protect the Bratz work does nothing to remove the material from the ambit of
`copyright as pertains to MGA. To the contrary, the concept of secret, unpublished
`works was expressly incorporated by Congress in the Act itself when Congress
`decided i