FOR PUBLICATION
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`No. 09-55673
`D.C. No.
`2:04-cv-09049-
`SGL-RNB
`
`
`
`MATTEL, INC., a Delaware
`corporation,
`Defendant-counter-claimant-
`Appellee,
`
`v.
`MGA ENTERTAINMENT, INC.; MGA
`ENTERTAINMENT (HK) LIMITED, a
`Hong Kong Special Administrative
`Region business entity; ISAAC
`LARIAN, an individual,
`Counter-defendants-Appellants,
`CARTER BRYANT, an individual,
`Plaintiff-counter-defendant,
`CARLOS GUSTAVO MACHADO
`GOMEZ, an individual; MGAE DE
`MEXICO, S.R.L. DE C.V., a Mexico
`business entity,
`
`Counter-defendants,
`
`ANNE WANG,
`
`Third-party-defendant,
`OMNI 808 INVESTORS LLC,
`
`Movant.
`
`17319
`
`(cid:252)
`(cid:253)
`(cid:254)
`

`
`17320
`
`MATTEL v. MGA ENTERTAINMENT
`
`
`
`CARTER BRYANT, an individual,
`Plaintiff-counter-defendant-
`Appellee,
`MGA ENTERTAINMENT, INC.; MGA
`ENTERTAINMENT (HK) LIMITED, a
`Hong Kong Special Administrative
`Region business entity; ISAAC
`LARIAN, an individual,
`Counter-defendants-Appellees,
`v.
`MATTEL, INC., a Delaware
`corporation,
`Defendant-counter-claimant-
`Appellant,
`CARLOS GUSTAVO MACHADO
`GOMEZ, an individual; MGAE DE
`MEXICO, S.R.L. DE C.V., a Mexico
`business entity,
`
`Counter-defendants.
`
`No. 09-55812
`D.C. No.
`2:04-cv-09049-SGL-
`RNB
`
`ORDER AND
`AMENDED
`OPINION
`
`Appeal from the United States District Court
`for the Central District of California
`Stephen G. Larson, District Judge, Presiding
`
`Argued and Submitted
`December 9, 2009—Pasadena, California
`
`Filed July 22, 2010
`Amended October 21, 2010
`
`Before: Alex Kozinski, Chief Judge, Stephen S. Trott and
`Kim McLane Wardlaw, Circuit Judges.
`
`Opinion by Chief Judge Kozinski
`
`(cid:252)
`(cid:253)
`(cid:254)
`

`
`17324
`
`MATTEL v. MGA ENTERTAINMENT
`
`COUNSEL
`
`E. Joshua Rosenkranz (argued) and Lisa T. Simpson, Orrick,
`Herrington & Sutcliffe LLP, New York, New York; Annette
`L. Hurst and Warrington S. Parker III, Orrick, Herrington &
`Sutcliffe LLP, San Francisco, California; and Thomas J.
`Nolan and Jason D. Russell, Skadden, Arps, Slate, Meagher
`& Flom LLP, Los Angeles, California, for the appellants.
`
`

`
`MATTEL v. MGA ENTERTAINMENT
`
`17325
`
`Daniel P. Collins (argued), Kelly M. Klaus, Aimee Feinberg
`and Mark Yohalem, Munger, Tolles & Olson LLP, Los Ange-
`les, California; and John B. Quinn, Susan R. Estrich, Michael
`T. Zeller and B. Dylan Proctor, Quinn Emanuel Urquhart Oli-
`ver & Hedges, LLP, Los Angeles, California, for the appellee.
`
`Simon J. Frankel, Margaret D. Wilkinson and Steven D. Sas-
`saman, Covington & Burling LLP, San Francisco, California;
`Steven M. Freeman and Steven C. Sheinberg, Anti-
`Defamation League, New York, New York; and Michelle N.
`Deutchman, Anti-Defamation League, Los Angeles, Califor-
`nia, for amici Anti-Defamation League et al.
`
`ORDER
`
`The opinion is amended as follows:
`
`Page 10,544, Lines
`12-14
`
`Replace <But there’s not a big market
`for fashion dolls that look like Patty
`and Selma Bouvier. Little girls buy
`fashion dolls with> with <But fashion
`dolls that look like Patty and Selma
`Bouvier don’t express the idea behind
`Bratz. Dolls depicting young, fashion-
`forward females have to have some-
`what>
`
`Page 10,544, Line 27 Insert <Applying this test doesn’t
`create a circuit split. Although other
`courts have invoked a “substantial
`similarity” test in cases involving
`dolls, they’ve used it to compare only
`the protectable features of the dolls,
`rather than the dolls overall. See, e.g.,
`Susan Wakeen Doll Co. v. Ashton
`
`

`
`17326
`
`MATTEL v. MGA ENTERTAINMENT
`
`Drake Galleries, 272 F.3d 441,
`451-52 (7th Cir. 2001); see also Ali-
`otti, 831 F.2d at 901-02. When there
`are
`few protectable
`features not
`required by
`the underlying
`idea,
`applying the substantial similarity test
`to them is effectively the same as
`determining whether the dolls or doll
`sculpts are virtually identical over-
`all.> as a footnote after <copying.>
`
`Page 10,546, Line 34 Delete < v. R. Dakin & Company>
`
`Mattel’s petition for panel rehearing and rehearing en banc
`is otherwise denied. See Fed. R. App. P. 35, 40. No further
`petitions for rehearing or rehearing en banc may be filed.
`
`OPINION
`
`KOZINSKI, Chief Judge:
`
`Who owns Bratz?
`
`I
`
`Barbie was the unrivaled queen of the fashion-doll market
`throughout the latter half of the 20th Century. But 2001 saw
`the introduction of Bratz, “The Girls With a Passion for Fash-
`ion!” Unlike the relatively demure Barbie, the urban, multi-
`ethnic and trendy Bratz dolls have attitude. This spunk struck
`a chord, and Bratz became an overnight success. Mattel,
`which produces Barbie, didn’t relish the competition. And it
`was particularly unhappy when it learned that the man behind
`Bratz was its own former employee, Carter Bryant.
`
`Bryant worked in the “Barbie Collectibles” department,
`where he designed fashion and hair styles for high-end Barbie
`
`

`
`MATTEL v. MGA ENTERTAINMENT
`
`17327
`
`dolls intended more for accumulation than for play. In August
`2000, while he was still employed by Mattel, Bryant pitched
`his idea for the Bratz line of dolls to two employees of MGA
`Entertainment, one of Mattel’s competitors. Bryant was soon
`called back to see Isaac Larian, the CEO of MGA. Bryant
`brought some preliminary sketches, as well as a crude dummy
`constructed out of a doll head from a Mattel bin, a Barbie
`body and Ken (Barbie’s ex) boots. The Zoe, Lupe, Hallidae
`and Jade dolls in Bryant’s drawings eventually made it to
`market as Cloe, Yasmin, Sasha and Jade, the first generation
`of Bratz dolls.
`
`Bryant signed a consulting agreement with MGA on Octo-
`ber 4, 2000, though it was dated September 18. Bryant gave
`Mattel two weeks’ notice on October 4 and continued work-
`ing there until October 19. During this period, Bryant was
`also working with MGA to develop Bratz, even creating a
`preliminary Bratz sculpt.1 A sculpt is a mannequin-like plastic
`doll body without skin coloring, face paint, hair or clothing.
`
`MGA kept Bryant’s involvement with the Bratz project
`secret, but Mattel eventually found out. This led to a flurry of
`lawsuits, which were consolidated in federal district court.
`Proceedings below were divided into two phases. Phase 1
`dealt with claims relating to the ownership of Bratz; Phase 2
`is pending and will deal with the remaining claims. This is an
`interlocutory appeal from the equitable orders entered at the
`conclusion of Phase 1.
`
`During Phase 1, Mattel argued that Bryant violated his
`employment agreement by going to MGA with his Bratz idea
`instead of disclosing and assigning it to Mattel. Mattel
`claimed it was the rightful owner of Bryant’s preliminary
`sketches and sculpt, which it argued MGA’s subsequent Bratz
`
`1The sculpt was actually crafted by a freelance sculptor with input from
`Bryant. The parties disputed below whether Bryant “created” it, and the
`jury found that Bryant did. This finding is not challenged on appeal.
`
`

`
`17328
`
`MATTEL v. MGA ENTERTAINMENT
`
`dolls infringed. And it asserted that MGA wrongfully
`acquired the ideas for the names “Bratz” and “Jade,” so the
`Bratz trademarks should be transferred from MGA to Mattel.
`
`Mattel won virtually every point below. The jury found that
`Bryant thought of the “Bratz” and “Jade” names, and created
`the preliminary sketches and sculpt, while he was employed
`by Mattel. It found that MGA committed three state-law vio-
`lations relating to Bryant’s involvement with Bratz. And it
`issued a general verdict finding MGA liable for infringing
`Mattel’s copyrights in Bryant’s preliminary Bratz works. Mat-
`tel sought more than $1 billion in copyright damages but the
`jury awarded Mattel only $10 million, or about 1% of that
`amount, perhaps because it found only a small portion of the
`Bratz dolls infringing. See p.17334-35 infra.
`
`The district court entered equitable relief based on the
`jury’s findings. As to the state-law violations, the district
`court imposed a constructive trust over all trademarks includ-
`ing the terms “Bratz” and “Jade,” essentially transferring the
`Bratz trademark portfolio to Mattel.2 The transfer prohibited
`MGA from marketing any Bratz-branded product, such as
`Bratz dolls (Bratz, Bratz Boyz, Lil’ Bratz, Bratz Lil’ Angelz,
`Bratz Petz, Bratz Babyz, Itsy Bitsy Bratz, etc.), doll accesso-
`ries (Bratz World House, Bratz Cowgirlz Stable, Bratz Spring
`Break Pool, Bratz Babyz Ponyz Buggy Blitz, etc.), video
`games (“Bratz: Girlz Really Rock,” “Bratz: Forever Dia-
`mondz,” “Bratz: Rock Angelz,” etc.) and Bratz the movie.
`
`As to the copyright claim, the district court issued an
`injunction prohibiting MGA from producing or marketing vir-
`tually every Bratz female fashion doll, as well as any future
`
`2Based on the finding that MGA wrongfully acquired the ideas for the
`names “Bratz” and “Jade,” the district court also entered a UCL injunction
`and a declaratory judgment concerning MGA’s right to the Bratz trade-
`marks. For simplicity, we will refer only to the constructive trust to
`describe all equitable relief.
`
`

`
`MATTEL v. MGA ENTERTAINMENT
`
`17329
`
`dolls substantially similar to Mattel’s copyrighted Bratz
`works. The injunction covered not just the original four dolls,
`but also subsequent generations (e.g., “Bratz Slumber Party
`Sasha” and “Bratz Girlfriendz Nite Out Cloe”) and other doll
`characters (e.g., “Bratz Play Sportz Lilee” and “Bratz Twins
`Phoebe and Roxxi”).
`
`In effect, Barbie captured the Bratz. The Bratz appeal.
`
`II
`
`[1] A constructive trust is an equitable remedy that com-
`pels the transfer of wrongfully held property to its rightful
`owner. Communist Party of U.S. v. 522 Valencia, Inc., 41 Cal.
`Rptr. 2d 618, 623 (Cal. Ct. App. 1995); see also Cal. Civ.
`Code § 2223 (“One who wrongfully detains a thing is an
`involuntary trustee thereof, for the benefit of the owner.”). A
`plaintiff seeking imposition of a constructive trust must show:
`(1) the existence of a res (property or some interest in prop-
`erty); (2) the right to that res; and (3) the wrongful acquisition
`or detention of the res by another party who is not entitled to
`it. Communist Party, 41 Cal. Rptr. 2d at 623-24.
`
`Prior to trial, the district court held that Bryant’s employ-
`ment agreement assigned his ideas to Mattel, and so instructed
`the jury. What was left for the jury to decide was which ideas
`Bryant came up with during his time with Mattel. It found that
`Bryant thought of the names “Bratz” and “Jade” while he was
`employed by Mattel, and that MGA committed several state-
`law violations by interfering with Bryant’s agreement as well
`as aiding and abetting its breach. After trial, the district court
`imposed a constructive trust over all Bratz-related trademarks.
`We review that decision for abuse of discretion. See GHK
`Assocs. v. Mayer Group, Inc., 274 Cal. Rptr. 168, 182 (Cal.
`Ct. App. 1990).
`
`

`
`17330
`
`MATTEL v. MGA ENTERTAINMENT
`A.
`
`[2] A constructive trust would be appropriate only if Bry-
`ant assigned his ideas for “Bratz” and “Jade” to Mattel in the
`first place. Whether he did turns on the interpretation of Bry-
`ant’s 1999 employment agreement, which provides: “I agree
`to communicate to the Company as promptly and fully as
`practicable all inventions (as defined below) conceived or
`reduced to practice by me (alone or jointly by others) at any
`time during my employment by the Company. 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.” (Emphasis added.) The contract specifies that
`“the term ‘inventions’ includes, but is not limited to, all dis-
`coveries, improvements, processes, developments, designs,
`know-how, data computer programs and formulae, whether
`patentable or unpatentable.” The district court held that the
`agreement assigned Bryant’s ideas to Mattel, even though
`ideas weren’t included on that list or mentioned anywhere
`else in the contract.3 We review the district court’s construc-
`tion of the agreement de novo. See L.K. Comstock & Co. v.
`United Eng’rs & Constructors Inc., 880 F.2d 219, 221 (9th
`Cir. 1989).
`
`Mattel points out that the list of examples of what consti-
`tutes an invention is illustrative rather than exclusive. Ideas,
`however, are markedly different from most of the listed exam-
`ples. Cf. People ex rel. Lungren v. Superior Ct., 926 P.2d
`1042, 1057 (Cal. 1996) (courts avoid constructions that would
`make “a particular item in a series . . . markedly dissimilar to
`other items on the same list”). Designs, processes, computer
`programs and formulae are concrete, unlike ideas, which are
`ephemeral and often reflect bursts of inspiration that exist
`only in the mind. On the other hand, the agreement also lists
`
`3Contrary to Mattel’s argument, MGA adequately preserved its objec-
`tions to this ruling.
`
`

`
`MATTEL v. MGA ENTERTAINMENT
`
`17331
`
`less tangible inventions such as “know-how” and “discover-
`ies.” And Bryant may have conveyed rights in innovations
`that were not embodied in a tangible form by assigning inven-
`tions he “conceived” as well as those he reduced to practice.
`
`[3] We conclude that the agreement could be interpreted to
`cover ideas, but the text doesn’t compel that reading. The dis-
`trict court thus erred in holding that the agreement, by its
`terms, clearly covered ideas. Had the district court recognized
`the ambiguity, it might have evaluated whether it could be
`resolved by extrinsic evidence. See Wolf v. Superior Court, 8
`Cal. Rptr. 3d 649, 655-56 (Cal. Ct. App. 2004). At various
`stages of litigation, the parties introduced such evidence sup-
`porting their respective interpretations of “inventions.” Con-
`tracts Mattel drafted for other employees, for example,
`expressly assigned their “ideas” as well as their “inventions.”
`This tends to show that the term “inventions” alone doesn’t
`include ideas. On the other hand, a Mattel executive claimed
`during her deposition that it was common knowledge in the
`design industry that terms like “invention” and “design” did
`include employee ideas. Because the district court concluded
`that the language of the contract was clear, it didn’t consider
`the extrinsic evidence the parties presented. Even if it had, it
`may not have been able to resolve the meaning of “inven-
`tions.” If the meaning turns in part on the credibility of con-
`flicting extrinsic evidence, a properly instructed jury should
`have decided the issue. See Morey v. Vannucci, 75 Cal. Rptr.
`2d 573, 579 (Cal. Ct. App. 1998). Because we must vacate the
`constructive trust in any event, for reasons explained below,
`this is a matter the district court can take up on remand.
`
`B.
`
`The very broad constructive trust the district court imposed
`must be vacated regardless of whether Bryant’s employment
`agreement assigned his ideas to Mattel. Even assuming that it
`did, and that MGA therefore misappropriated the names
`“Bratz” and “Jade,” the value of the trademarks the company
`
`

`
`17332
`
`MATTEL v. MGA ENTERTAINMENT
`
`eventually acquired for the entire Bratz line was significantly
`greater because of MGA’s own development efforts, market-
`ing and investment. The district court nonetheless transferred
`MGA’s entire Bratz trademark portfolio to Mattel on the
`ground that the “enhancement of value [of the property held
`in trust] is given to the beneficiary of the constructive trust.”
`As a result, Mattel acquired the fruit of MGA’s hard work,
`and not just the appreciation in value of the ideas Mattel
`claims it owns.
`
`[4] In general, “[t]he beneficiary of the constructive trust
`is entitled to enhancement in value of the trust property.”
`Haskel Eng’g & Supply Co. v. Hartford Accident & Indem.
`Co., 144 Cal. Rptr. 189, 193 (Cal. Ct. App. 1978). This is so
`“not because [the beneficiary] has a substantive right to [the
`enhancement] but rather to prevent unjust enrichment of the
`wrongdoer-constructive trustee.” Id. Thus, a person who
`fraudulently acquired a house worth $100,000 in 2000 that
`appreciates to $200,000 by 2010 because of a strong real
`estate market can’t complain when the rightful owner takes
`the benefit of the $100,000 increase. “[I]t is simple equity that
`a wrongdoer should disgorge his fraudulent enrichment.”
`Janigan v. Taylor, 344 F.2d 781, 786 (1st Cir. 1965).
`
`[5] This principle has the greatest force where the appreci-
`ation of the property is due to external factors rather than the
`efforts of the wrongful acquisitor. Id. at 787. “When the
`defendant profits from the wrong, it is necessary to identify
`the profits and to recapture them without capturing the fruits
`of the defendant’s own labors or legitimate efforts.” Dan B.
`Dobbs, Dobbs Law of Remedies: Damages-Equity-Restitution
`§ 6.6(3) (2d ed. 1993). This is because “the aim of restitution
`has been to avoid taking the defendant’s blood along with the
`pound of flesh.” Id. § 6.6(3) n.4. A constructive trust is there-
`fore “not appropriate to every case because it can overdo the
`job.” Id. § 4.3(2).
`
`[6] When the value of the property held in trust increases
`significantly because of a defendant’s efforts, a constructive
`
`

`
`MATTEL v. MGA ENTERTAINMENT
`
`17333
`
`trust that passes on the profit of the defendant’s labor to the
`plaintiff usually goes too far. For example, “[i]f an artist
`acquired paints by fraud and used them in producing a valu-
`able portrait we would not suggest that the defrauded party
`would be entitled to the portrait, or to the proceeds of its
`sale.” Janigan, 344 F.2d at 787. Even assuming that MGA
`took some ideas wrongfully, it added tremendous value by
`turning the ideas into products and, eventually, a popular and
`highly profitable brand. The value added by MGA’s hard
`work and creativity dwarfs the value of the original ideas Bry-
`ant brought with him, even recognizing the significance of
`those ideas. We infer that the jury made much the same judg-
`ment when it awarded Mattel only a small fraction of the
`more than $1 billion in interest-adjusted profit MGA made
`from the brand.
`
`From the ideas for the names “Bratz” and “Jade,” MGA
`created not only the first generation of Bratz dolls (Cloe,
`Yasmin, Sasha and Jade), but also many other Bratz charac-
`ters (Ciara, Dana, Diona, Felicia, Fianna and so on), as well
`as subsequent generations of the original four dolls (“Bratz
`Flower Girlz Cloe,” “Bratz on Ice Doll Yasmin,” etc.). MGA
`also generated other doll lines, such as the Bratz Boyz, Bratz
`Petz and Bratz Babyz. And it made a variety of Bratz doll
`accessories, along with several Bratz video games and a
`movie. These efforts significantly raised the profile of the
`Bratz brand and increased the value of the Bratz trademarks.
`
`[7] 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 mis-
`appropriated names. The district court’s imposition of a con-
`structive trust forcing MGA to hand over its sweat equity was
`an abuse of discretion and must be vacated.
`
`

`
`17334
`
`MATTEL v. MGA ENTERTAINMENT
`III
`
`[8] Mattel also claimed ownership of Bryant’s preliminary
`Bratz drawings and sculpt under Bryant’s employment agree-
`ment, and that MGA’s subsequent Bratz dolls infringed its
`copyrights in those works. The drawings and sculpt clearly
`were “inventions” as that term is defined in Bryant’s employ-
`ment agreement with Mattel. However, MGA argued that the
`employment agreement didn’t assign the items because Bry-
`ant created them outside the scope of his employment at Mat-
`tel, on his own time. At summary judgment, the district court
`held that the agreement assigned inventions even if they were
`not made during working hours, so long as they were created
`during the time period Bryant was employed by Mattel. So
`instructed, the jury found that Bryant made the drawings and
`sculpt while he was employed by Mattel, and the agreement
`therefore assigned them to Mattel.4 The jury was not asked to
`find whether Bryant made the drawings and sculpt during
`Mattel work hours, and it’s unclear whether the record con-
`tained any evidence on this point.
`
`Once Mattel established ownership of Bryant’s preliminary
`sketches and sculpt, it pursued a copyright claim against
`MGA. The district court instructed the jury that any “substan-
`tially similar” Bratz doll infringed Mattel’s copyrights in the
`sketches and sculpt. During deliberations, the jury sent the
`judge a note asking if it could find infringement as to the first
`generation of Bratz dolls and no others. The judge said it
`could. The jury returned a general verdict finding MGA liable
`for copyright infringement, but awarded Mattel only $10 mil-
`lion in damages, a tiny fraction of the more than $1 billion to
`which Mattel claimed it was entitled. The district court
`thought it unclear which Bratz dolls, or how many dolls, the
`
`4The jury also found that Bryant created the dummy doll, see p.17327
`supra, while he was at Mattel. The dummy was thrown away long before
`this litigation ensued, and was so crude that no copyright claim is based
`on it.
`
`

`
`MATTEL v. MGA ENTERTAINMENT
`
`17335
`
`jury thought infringing, so it made its own infringement find-
`ings in determining whether Mattel was entitled to equitable
`relief. The district court found the vast majority of Bratz dolls
`infringing and enjoined MGA from producing them or any
`other substantially similar dolls.
`
`A.
`
`Bryant’s 1999 employment agreement assigns to Mattel
`inventions created “at any time during my employment by the
`Company.”5 MGA argues that “at any time during my
`employment” covers only works created within the scope of
`Bryant’s employment, not those created on his own time and
`outside of his duties at Mattel. Bryant wasn’t tasked with cre-
`ating new doll lines there; he designed fashions and hair styles
`for Barbie Collectibles. MGA thus argues that Bryant created
`the Bratz designs and came up with the names “Bratz” and
`“Jade” outside the scope of his employment, and that he
`therefore owns the work.6
`
`The district court disagreed, holding at summary judgment
`that the agreement assigned to Mattel “any doll or doll fash-
`ions [Bryant] designed during the period of his employment
`with Mattel.” It was therefore irrelevant “whether Bryant
`worked on [Bratz] on his own time [or] during his working
`hours at Mattel.” We again review the district court’s con-
`
`5The agreement excepts inventions that “qualif[y] under the provision
`of Section 2870 of the California Labor Code[, which] provides that the
`requirement to assign ‘shall not apply to an invention that the employee
`developed entirely on his or her own time without using the employer’s
`equipment, supplies, facilities or trade secret information except for those
`inventions that either (1) relate at the time of conception or reduction to
`practice of the invention to the employer’s business . . . or (2) result from
`any work performed by the employee for the employer.’ ”
`6It won’t matter whether Bryant came up with the ideas in the course
`of employment if the district court or a properly instructed jury determines
`that the agreement didn’t assign ideas in the first place. See Part II.A
`supra.
`
`

`
`17336
`
`MATTEL v. MGA ENTERTAINMENT
`
`struction of the contract de novo. See L.K. Comstock, 880
`F.2d at 221.
`
`[9] The phrase “at any time during my employment” is
`ambiguous. It could easily refer to the entire calendar period
`Bryant worked for Mattel, including nights and weekends.
`But it can also be read more narrowly to encompass only
`those inventions created during work hours (“during my
`employment”), possibly including lunch and coffee breaks
`(“at any time”).7 Extrinsic evidence doesn’t resolve the
`ambiguity. For example, an employee testified that it was
`“common knowledge that a lot of people were moonlighting
`and doing other work,” which wasn’t a problem so long as it
`was done on “their own time,” and at “their own house.” She
`agreed when asked, “Was it your understanding that if you
`designed dolls when you were at home at night that you
`owned them?” However, another employee testified, “Every-
`thing I did for Mattel belonged to Mattel. Actually, everything
`I did while I was working for Mattel belonged to Mattel.”
`
`[10] Because the agreement’s language is ambiguous and
`some extrinsic evidence supports each party’s reading, the
`district court erred by granting summary judgment to Mattel
`on this issue and holding that the agreement clearly assigned
`works made outside the scope of Bryant’s employment. See
`City of Hope Nat’l Med. Ctr., 181 P.3d at 156. The issue
`should have been submitted to the jury, which could then
`have been instructed to determine (1) whether Bryant’s agree-
`ment assigned works created outside the scope of his employ-
`
`7Mattel argues that because employers are already considered the
`authors of works made for hire under the Copyright Act, 17 U.S.C.
`§ 201(b), the agreement must cover works made outside the scope of
`employment. Otherwise, employees would be assigning to Mattel works
`the company already owns. But the contract provides Mattel additional
`rights by covering more than just copyrightable works. The contract can
`also be enforced in state court, whereas Copyright Act claims must be
`heard in federal court.
`
`

`
`MATTEL v. MGA ENTERTAINMENT
`
`17337
`
`ment at Mattel, and (2) whether Bryant’s creation of the Bratz
`sketches and sculpt was outside the scope of his employment.
`
`B.
`
`The district court’s error in construing the employment
`agreement is sufficient to vacate the copyright injunction. On
`remand, Mattel might well convince a properly instructed jury
`that the agreement assigns works created outside the scope of
`employment, or that Bryant’s preliminary Bratz sketches and
`sculpt were created within the scope of his employment at
`Mattel. The district court would then once again have to
`decide whether to grant a copyright injunction. We therefore
`believe it prudent to address MGA’s appeal of the district
`court’s copyright rulings.
`
`[11] Mattel argued that MGA’s Bratz dolls infringed its
`copyrights in the sketches and sculpt. To win its copyright
`claim, Mattel had to establish three things. First, Mattel had
`to prove that it owned copyrights in the sketches and sculpt
`(it did). Second, it had to show that MGA had access to the
`sketches and sculpt (obviously). Third, it had to establish that
`MGA’s dolls infringe the sketches and sculpt (the kicker). See
`Aliotti v. R. Dakin & Co., 831 F.2d 898, 900 (9th Cir. 1987).
`
`[12] Assuming that Mattel owns Bryant’s preliminary
`drawings and sculpt, its copyrights in the works would cover
`only its particular expression of the bratty-doll idea, not the
`idea itself. See Herbert Rosenthal Jewelry Corp. v. Kal-
`pakian, 446 F.2d 738, 742 (9th Cir. 1971). Otherwise, the first
`person to express any idea would have a monopoly over it.
`Degas can’t prohibit other artists from painting ballerinas, and
`Charlaine Harris can’t stop Stephenie Meyer from publishing
`Twilight just because Sookie came first. Similarly, MGA was
`free to look at Bryant’s sketches and say, “Good idea! We
`want to create bratty dolls too.”
`
`[13] Mattel, of course, argues that MGA went beyond this
`by copying Bryant’s unique expression of bratty dolls, not just
`
`

`
`17338
`
`MATTEL v. MGA ENTERTAINMENT
`
`the idea. To distinguish between permissible lifting of ideas
`and impermissible copying of expression, we have developed
`a two-part “extrinsic/intrinsic” test. See Apple Computer, Inc.
`v. Microsoft Corp., 35 F.3d 1435, 1442 (9th Cir. 1994). At the
`initial “extrinsic” stage, we examine the similarities between
`the copyrighted and challenged works and then determine
`whether the similar elements are protectable or unprotectable.
`See id. at 1442-43. For example, ideas, scenes a faire (stan-
`dard features) and unoriginal components aren’t protectable.
`Id. at 1143-45. When the unprotectable elements are “filtered”
`out, what’s left is an author’s particular expression of an idea,
`which most definitely is protectable. Id.
`
`[14] Given that others may freely copy a work’s ideas (and
`other unprotectable elements), we start by determining the
`breadth of the possible expression of those ideas. If there’s a
`wide range of expression (for example, there are gazillions of
`ways to make an aliens-attack movie), then copyright protec-
`tion is “broad” and a work will infringe if it’s “substantially
`similar” to the copyrighted work. See id. at 1439, 1146-47. If
`there’s only a narrow range of expression (for example, there
`are only so many ways to paint a red bouncy ball on blank
`canvas), then copyright protection is “thin” and a work must
`be “virtually identical” to infringe. See id.; Satava v. Lowry,
`323 F.3d 805, 812 (9th Cir. 2003) (glass-in-glass jellyfish
`sculpture only entitled to thin protection against virtually
`identical copying due to the narrow range of expression).
`
`The standard for infringement—substantially similar or vir-
`tually identical—determined at the “extrinsic” stage is applied
`at the “intrinsic” stage. See Apple Computer, 35 F.3d at 1443.
`There we ask, most often of juries, whether an ordinary rea-
`sonable observer would consider the copyrighted and chal-
`lenged works substantially similar (or virtually identical). See
`id. at 1442. If the answer is yes, then the challenged work is
`infringing.
`
`

`
`MATTEL v. MGA ENTERTAINMENT
`
`17339
`
`The district court conducted an extrinsic analysis and deter-
`mined that the following elements of Bryant’s sketches and
`sculpt were non-protectable:
`
`1. The resemblance or similarity to human form
`and human physiology.
`
`2. The mere presence of hair, heads, two eyes, eye-
`brows, lips, nose, chin, mouth, and other fea-
`tures that track human anatomy and physiology.
`
`3. Human clothes, shoes, and accessories.
`
`4. Age, race, ethnicity, and “urban” or “rural”
`appearances.
`
`5. Common or standard anatomical features rela-
`tive to others (doll nose and relatively thin,
`small bodies).
`
`6. Scenes a faire, or common or standard treat-
`ments of the subject matter.
`
`It found that the following elements were protectable:
`
`synergistic compilation and
`1. Particularized,
`expression of the human form and anatomy that
`expresses a unique style and conveys a distinct
`look or attitude.
`
`2. Particularized expression of the doll’s head, lips,
`eyes, eyebrows, eye features, nose, chin, hair
`style and breasts, including the accentuation or
`exaggeration of certain anatomical features rela-
`tive to others (doll lips, eyes, eyebrows, and eye
`features) and de-emphasis of certain anatomical
`features relative to others (doll nose and thin,
`small doll bodies).
`
`

`
`17340
`
`MATTEL v. MGA ENTERTAINMENT
`
`3. Particularized, non-functional doll clothes, doll
`shoes, and doll accessories that express aggres-
`sive, contemporary, youthful style.
`
`Based on this determination, the district court decided that
`“substantial similarity” is the appropriate test for infringe-
`ment. And, in determining whether Mattel was entitled to
`equitable relief, it found that the two Bratz sculpts and the
`overwhelming majority of the Bratz female fashion dolls were
`substantially similar to Mattel’s copyrighted works. The dis-
`trict court therefore entered an injunction prohibiting MGA
`from producing the infringing dolls or any future substantially
`similar dolls. We review de novo the district court’s determi-
`nation as to the scope of copyright protection. See Ets-Hokin
`v. Skyy Spirits, Inc., 225 F.3d 1068, 1073 (9th Cir. 2000).
`
`1. Doll Sculpt. The district court enjoined MGA from mar-
`keting or producing any doll that incorporates the “core Bratz
`fashion doll production sculpt” or the “Bratz Movie sculpt”
`because it held they were substantially similar to Bryant’s
`preliminary sculpt.8 By adopting the “substantially similar”
`standard, the district court afforded Bryant’s sculpt broad
`copyright protection. See pp.17337-38 supra. MGA argues
`that the district court should have given Bryant’s preliminary
`sculpt only thin protection against virtually identical works.
`
`[15] In order to determine the scope of protection for the
`sculpt, we must first filter out any unprotectable elements.
`Producing small plastic dolls that resemble young females is
`a staple of the fashion doll market. To this basic concept, the
`Bratz dolls add exaggerated features, such as an oversized
`head and feet. But many fashion dolls have exaggerated
`
`8The district court’s analysis was brief, so we must infer this finding.
`It’s possible that the district court also thought MGA’s two sculpts were
`substantially similar to some of Bryant’s sketches of doll bodies. Even if
`this were so, it wouldn’t change our analysis because the sketches of doll
`bodies would be entitled to no more protection here than Bryant’s sculpt.
`
`

`
`MATTEL v. MGA ENTERTAINMENT
`
`17341
`
`features—take the oversized heads of the Blythe dolls and My
`Scene Barbies as examples. Moreover, women have often
`been depicted with exaggerated proportions similar to those of
`the Bratz dolls—from Betty Boop to characters in Japanese
`anime and Steve Madden ads. The concept o