Opinion

Mattel, Inc. v. MGA ENTERTAINMENT, INC.

782 F. Supp. 2d 911
2011 WL 1114250

Court: District Court, C.D. California
Filed: Jan 5, 2011
Status: Published
Author: Carter
On the bench: Carter
Cited by: 53 cases
Authority: More cited than 79.4%

finding that the issue of reasonable secrecy under the circumstances was "for the fact-finder to resolve," since the disclosure "could have been accompanied by an 'implied obligation to not use or disclose it' for a specified period of time"

How later courts described this case

finding that the issue of reasonable secrecy under the circumstances was "for the fact-finder to resolve," since the disclosure "could have been accompanied by an 'implied obligation to not use or disclose it' for a specified period of time"
concluding that it was a question for the jury whether a new doll concept derived independent economic value from not being generally known
finding that goods were related where inter alia, “|t]he goods are often sold through the same . . . retailers, like Toys ‘R Us and WalMart”
dismissing breach of fiduciary duty claim to the extent predicated on 26 misappropriation of confidential information

Written by the judges who cited it.

Distinguished

Distinguished by Copart, Inc. v. Sparta Consulting, Inc., 277 F. Supp. 3d 1127 (2017)
Id. Thus, when the property and the' alleged trade secrét are distinguishable, and the property’s value is not tied to the trade secret, CUTSA does not preempt the conversion claim; when they are indistinguishable, and the property’s only source of value is the trade secret information, CUTSA . preempts.
District Court, E.D. CaliforniaSep 26, 2017Read it

The opinion

AMENDED ORDER

ON MGA’S MOTION FOR SUMMARY JUDGMENT; MATTEL’S MOTION FOR PARTIAL SUMMARY JUDGMENT; MACHADO’S MOTION FOR SUMMARY JUDGMENT; MATTEL’S MOTION FOR PARTIAL SUMMARY JUDGMENT ON MGA’S COUNTERCLAIMS-IN-REPLY

DAVID O. CARTER, District Judge.

Before the Court are the following Motions:

(1) MGA Entertainment, Inc. (“MGAE”), MGA de Mexico, S.R.L. de CV (“MGA Mexico”), MGA Entertainment (HK) Ltd. (“MGA HK”), and Isaac Larian (“Larian”)’s (collectively “MGA”) Motion for Summary Judgment;

(2) Mattel, Inc. (“Mattel”) and Mattel de Mexico, S.R.L. de CV (“Mattel Mexico”)’s joint Motion for Partial Summary Judgment;

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(3) Carlos Gustavo Machado Gomez (“Machado”)’s Motion for Summary Judgment; and

(4) Mattel’s Motion for Partial Summary Judgment on MGAE’s CounterClaims in Reply.

Background

On April 27, 2004, Mattel filed a state court complaint against former employee Carter Bryant (“Bryant”) alleging that Bryant breached his contractual and common law duties to Mattel by failing to disclose his concept sketches and sculpts of the Bratz dolls prior to leaving Mattel for MGA Entertainment, Inc. (“MGAE”) on or about October 4, 2000. Bryant filed a counter-claim against Mattel in state court and filed a separate action for declaratory relief in federal court on November 2, 2004, on which date Bryant also removed Mattel’s state court lawsuit to federal court. MGAE intervened in Mattel’s suit against Bryant on December 7, 2004 and, four months later, filed a stand-alone complaint in federal court against Mattel for trade dress infringement, dilution, unfair competition, and unjust enrichment, alleging that Mattel infringed MGAE’s distinctive packaging and interfered with MGAE’s business relationships. On June 19, 2006, the Honorable Stephen G. Larson consolidated the three cases for all purposes upon finding that “the[ ] actions involve a number of common issues of law and fact.”

Bryant was the only defendant named by Mattel’s state court complaint. On November 20, 2006, Mattel sought leave to file an amended complaint that would “substitute [MGAE] for Defendant Doe 1, [MGA HK] for Defendant Doe 2, and [Larian] for Defendant Doe 3” and add MGA Mexico and Machado as defendants to a pleading that asserted a host of new claims unrelated to Bryant’s conduct. (Dkt. 89.) Mattel’s request was denied but only as a procedural matter; the court permitted Mattel to plead its proposed amendments “in the form of an amended answer and counterclaim in” MGAE’s case against Mattel. (Dkt. 142.) Mattel filed its First Amended Answer and Counterclaims (FAAC) on January 1, 2007 (Dkt. 143) bringing the same claims that are now pending against MGA and Machado, though the substance of those claims and the detail with which they are alleged has changed considerably. Following the filing of Mattel’s counter-claims against MGA and Machado, the court ordered claims related to the ownership of the Bratz line of dolls — raised in Mattel’s complaint against Bryant and Mattel’s FAAC — to be tried separately from, and prior to, MGAE’s affirmative claims and Mattel’s counter-claims arising out of conduct unrelated to the ownership of Bratz.

Mattel entered into a settlement with Bryant on the eve of the “phase 1” trial, leaving the following claims to be tried to the jury: (1) Mattel’s claim for intentional interference with contract against Larian and MGAE; (2) Mattel’s claim for aiding and abetting breach of fiduciary duty against Larian and MGAE; (3) Mattel’s claim for aiding and abetting breach of duty of loyalty against Larian and MGAE; (4) Mattel’s claim for conversion against MGAE, MGA HK, and Larian; (5) Mattel’s claim for statutory unfair competition against Larian, MGAE, and MGA HK; (6) Mattel’s claim for declaratory relief against Larian, MGAE, and MGA HK; and (7) Mattel’s claim for copyright infringement against Larian, MGAE, and MGA HK. (Dkt. 3917 at 11.) Mattel prevailed on each of its claims and the jury found that Bryant conceived the idea for the name Bratz and created the concept drawings and sculpt for the Bratz dolls during his second term of employment with Mattel (January 4, 1999 to October 4, 2000). On the basis of the jury’s special

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and general verdicts, and after independently examining the similarity between the concept sketches/sculpts and MGA’s Bratz dolls, the district court placed the Bratz trademarks in a constructive trust and enjoined MGA from continuing to sell dolls that were substantially similar to Bryant’s initial works. MGA appealed.

During the pendency of MGA’s appeal of the phase 1 orders, discovery proceeded on the claims not tried in the phase 1 trial. Mattel amended its responsive pleading three times and joined Mattel Mexico as a plaintiff to its operative Fourth Amended Answer and Counterclaims (“4AAC”), which brings claims arising out of MGA’s relationships with Bryant and other former Mattel employees who allegedly stole Mattel’s confidential information before leaving Mattel. The 4AAC’s claims also arise out of MGA’s alleged litigation misconduct and unwillingness to comply with the phase 1 jury’s verdicts, though many of these allegations were dismissed on August 2, 2010. MGA narrowed its trade dress infringement allegation to the two-pronged claim that Mattel copied MGA’s trapezoidal and heart-shaped packaging. MGA also filed counterclaims-in-reply that arise out of Mattel’s alleged market research tactics.

On July 22, 2010, MGA prevailed on its appeal. In vacating the constructive trust and injunction, the Ninth Circuit held that the equitable relief was impermissibly broad and predicated upon jury verdicts tainted by erroneous instruction. On October 22, 2010, this Court granted MGA’s motion for a new trial on all claims and issues tried to the jury in phase 1, finding that the indistinct and inseparable claims were all infected by instructional error. The Court separately discarded with the earlier bifurcation of claims, and ordered that all pending claims between the parties be tried in a single proceeding to commence on January 11, 2011.

Standard

Rule 56 of the Federal Rules of Civil Procedure provides that “[a] party may move for summary judgment, identifying each claim or defense — or the part of each claim or defense — on which summary judgment is sought.” Fed.R.Civ.P. 56(a). Summary judgment should be granted “when, viewing the evidence in the light most favorable to the non-moving party, there are no genuine issues of material fact” and the moving party is entitled to judgment as a matter of law.

Avery v. First Resolution Mgmt. Corp.,

568 F.3d 1018, 1021 (9th Cir.2009);

see also

Fed. R.Civ.P. 56(a). In adjudicating cross-motions for summary judgment, the Ninth Circuit “evaluate[s] each motion separately, giving the nonmoving party in each instance the benefit of all reasonable inferences.”

ACLU of Nevada v. City of Las Vegas,

466 F.3d 784, 790-91 (9th Cir.2006) (citations omitted);

see also Friends of Columbia Gorge, Inc. v. Schafer,

624 F.Supp.2d 1253, 1263 (D.Or.2008).

Discussion

I. Bryant’s Inventions Agreement

As explained in the order granting MGA’s Motion for New Trial, Mattel’s counter-claims for conversion, intentional interference with contractual relations, aiding and abetting breach of fiduciary duty, copyright infringement, and declaratory relief require the interpretation of Mattel’s Employee Confidential and Inventions Agreement (the “Inventions Agreement”) that Bryant signed on January 4, 1999. By paragraph 2 of the Inventions Agreement Bryant agreed to “communicate to [Mattel] as promptly and fully as

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practicable all inventions ... conceived or reduced to practice by me (alone or jointly with others) at any time during my employment with [Mattel].” (Declaration of Dylan Proctor, Ex. 124.) Bryant also assigned to Mattel any “right, title and interest” in such inventions, which the Inventions Agreement defined as “including], but [] not limited to, all discoveries, improvements, processes, developments, designs, know-how, data computer programs, and formulae, whether patentable or unpatentable.”

Id.

A. Inventions

Prior to the phase 1 trial, Mattel successfully argued that the terms of the Inventions Agreement assigned to Mattel Bryant’s right, title, and interest in his ideas for the names Bratz and Jade, leaving for the jury the question of whether Bryant’s ideas were conceived at any time during his employment with Mattel. On appeal, the Ninth Circuit held that “the agreement could be interpreted to cover ideas, but the text doesn’t compel that reading,” and suggested that this Court evaluate whether the ambiguity “could be resolved by extrinsic evidence.”

1. Extrinsic Evidence

Mattel argues that Bryant and Mattel mutually intended for the Inventions Agreement to assign to Mattel Bryant’s right, title, and interest in the ideas he conceived or reduced to practice at any time during his employment with Mattel. Because “[t]he fundamental goal of contractual interpretation is to give effect to the mutual intention of the parties,” the Court may consider extrinsic evidence of the parties’ intent when the contract is ambiguous.

Morey v. Vannucci,

64 Cal.App.4th 904, 912 , 75 Cal.Rptr.2d 573 (1998) (quoting

Bank of the West v. Superior Court,

2 Cal.4th 1254, 1264 , 10 Cal.Rptr.2d 538 , 833 P.2d 545 (1992)) (quotation marks omitted).

Admissible extrinsic evidence includes “surrounding circumstances under which the parties negotiated or entered into the contract; the object, nature, and subject matter of the contract; and the subsequent conduct of the parties.”

Id.

Mattel cites Bryant’s testimony from an unrelated lawsuit and the deposition testimony of Mattel’s corporate designee to show that both Bryant and Mattel understood the Inventions Agreement to assign Bryant’s right, title, and interest in his ideas. As a general rule, evidence of the contracting parties’ “undisclosed intent or understanding” is irrelevant to the contract’s interpretation.

Cedars-Sinai Medical Ctr. v. Shewry,

137 Cal.App.4th 964, 980 , 41 Cal.Rptr.3d 48 (2006). However, evidence of the parties’ subjective intent may be used “in interpreting an ambiguity, although in the case of contracts, it is a mutual declaration of intention which is sought to be found.”

Heston v. Farmers Ins. Group,

160 Cal.App.3d 402, 414 , 206 Cal.Rptr. 585 (1984) (finding prior representations about similar agreement relevant to whether parties shared intent).

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During a 2007 trial between MGA and Art Attacks Ink, LLC, Bryant testified about his relationship with Mattel:

Q And part of your job [at Mattel] was to come up with new ideas, right?

A Yeah, that was part of my job.

Q I’m not asking you whether it was fair or whether [Mattel] explained [the Inventions Agreement] to you. I’m just asking what your understanding of the agreement was.

A I really don’t remember.

Q Sir, [Exhibit 3074 is] a proprietary information checkout from Mattel that you signed on October 19th, 2000, your last day of employment there, correct?

A Yes.

Okay. And scroll up. Mattel wanted to make sure that you were aware that each terminating employee should be aware that in his employment agreement he has agreed to transfer all inventions made or conceived during the period of his employment at Mattel. By this time did not you understand that condition?

A I’m sorry. I’m not exactly sure what you’re asking me.

Q Did you understand what this first sentence meant, by October 19th, 2000?

A This is the first time I’d ever seen that contract.

THE COURT: Today is?

THE. WITNESS: No. On my exiting day this was the first time I’d ever seen this particular contract. And, again, it was a contract that was not explained to me.

BY MR. GRINNELL:

Q Did you not understand that your interest in any and all inventions, improvements and ideas which you made or conceived during your employment at the company was the exclusive property of Mattel? Did you not understand that?

A You know, I think I was aware of that. It wasn’t pointed out to me when I left. Nothing on this contract was pointed out to me specifically.

Declaration of Jon Corey In Support of Mattel’s Motion for Partial Summary Judgment, Exh. 84

(Art Attacks v. MGA

May 2, 2007 Trial Tr. (Carter Bryant) at 115:25 to 123:15).

Bryant’s ambiguous testimony about a distinct agreement, as well as his understanding at the time of his resignation, does not evidence “the mutual intention of the parties as it existed

at the time of

contracting.” Cal. Civ.Code § 1636 (emphasis added). The October 19, 2000 proprietary information checkout form referenced in Bryant’s testimony is a document he was asked to sign on his last day at Mattel. (Ex. 43 to MGA’s MSJ.) As a reminder to Bryant, the checkout form purported to quote the assignment provision in the Inventions Agreement:

My interest in (a) any and all inventions, improvements and ideas (whether or not patentable) which I have made or conceived, or may make or conceive at any time during the period of my employment with the Company, either solely or jointly with others and in (b) any suggestions, designs, trademarks, copyrightable subject matter, literary works, artistic works, and computer software which I have made or conceived, or may make or conceive at any time during the period of my employment which relate or are applicable directly or indirectly to any phase of the Company’s business

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shall be the exclusive property of the Company, its successors, assignees or nominees.

Ex. 43 to MGA MSJ.

The checkout form misquoted Bryant’s Inventions Agreement, which did not expressly assign to Mattel Bryant’s interest in his ideas. This error may be attributable to the fact that prior versions of Mattel’s Inventions Agreement expressly assigned the contracting employee’s interest in his ideas.

Compare id. and

Exs. 9077,

with

Proctor Deck, Ex. 124. The minimal overlap between these prior versions and the version signed by Bryant — for example, Bryant’s agreement identifies “discoveries, improvements, processes, developments, designs, know-how, data computer programs and formulae, whether patentable or unpatentable,” many of which do not appear in prior versions — shows a genuine issue of material fact as to whether Bryant’s understanding about the checkout form paralleled his prior understanding about the scope of the Inventions Agreement.

Mattel’s evidence of its

own

intent is also undermined by the dissimilarity between the Inventions Agreement and checkout form. For example, Mattel’s Vice President for Human Resources, Alan Kaye, submitted a declaration stating that:

Although the version of the Inventions Agreement signed by Mr. Bryant did not specifically identify ‘ideas’ among the categories of property to be assigned, it was Mattel’s intent and understanding that ideas related to Mattel’s line of business were included among the intellectual property assigned to Mattel. Invention is a fluid concept, and Mattel considers ‘ideas’ part and parcel with the creation of designs and inventions that are assigned to Mattel.

Declaration of Alan Kaye in Support of Mattel’s Motion for Partial Summary Judgment ¶ 8.

Kaye’s claim that Mattel considers ideas “part and parcel” with inventions is belied by the fact that the checkout form and earlier versions of the agreement treated inventions and ideas as distinct. Ninth Circuit Op. at 10534. Though he claims familiarity with “Mattel’s understanding of and position with respect to ownership of ideas and concepts developed off-site,” Kaye could not explain at his deposition why the Inventions Agreement signed by Bryant omitted the word “ideas.” Deposition of Alan Kaye, Vol. I, June 19, 2010, 127:2 to 130:3. Nor could Kaye define the phrase “includes but is not limited to” in Bryant’s agreement, even though his declaration claims a “familiarity] with the Inventions Agreement that Bryant signed in 1999.”

Compare id.

at 127:23

with

Kaye Deck ¶ 4.

The fact that prior versions of the agreement used the word ideas may undermine the credibility of Mattel’s witness.

Travis v. Southern Pacific Co.,

210 Cal.App.2d 410, 421 , 26 Cal.Rptr. 700 (1962). However, contrary to MGA’s argument, the evolution of the Inventions Agreement does not entitle MGA to judgment as a matter of law on this issue, since a reasonable fact-finder could conclude that Bryant intended for the agreement to encompass ideas. Both motions for summary judgment are denied on this issue.

2. Assignability

MGA argues that Bryant lacked an assignable right, title, or interest in his ideas because ideas are not property under California law. The Ninth Circuit rejected this argument, which MGA made in its opening brief on appeal, by holding that a narrower constructive trust may be imposed after re-trial. MGA’s argument is thus precluded by the law of the case doctrine.

United States v. Houser,

804 F.2d 565, 567 (9th Cir.1986) (“A trial court may not [on remand] reconsider a question

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decided by an appellate court.”). Given the broad and variable rights in intangibles, the Ninth Circuit’s conclusion was not error, let alone clear error, which is the only applicable exception to the law of the case doctrine.

See Kremen v. Cohen,

337 F.3d 1024, 1030 (9th Cir.2003);

cf. Painton & Co. v. Bourns, Inc.,

442 F.2d 216, 223 (2d Cir.1971) (finding that commercially valuable ideas may be licensed);

Armorlite Lens Co. v. Campbell,

340 F.Supp. 273, 275 (S.D.Cal.1972) (similar).

MGA also claims the assignment of ideas is (1) contrary to a reasonable employee’s expectations and (2) unconscionable. These factors preclude the assignment of ideas if Mattel imposed and drafted the agreement and offered Bryant “only the opportunity to adhere to the contract or reject it.”

Neal v. State Farm Ins. Cos.,

188 Cal.App.2d 690, 694 , 10 Cal.Rptr. 781 (1961). Whether Bryant was forced to accept the agreement as drafted turns on his credibility. For example, a more senior Mattel employee declares that he negotiated a more limited assignment with Mattel. Declaration of Robert Hudnut in Support of Mattel’s Opp. to MGA’s MSJ ¶ 4. The fact-finder must also resolve whether the assignment of ideas was contrary to a reasonable employee’s expectations, given Bryant’s testimony acknowledging the assignment of ideas in his other agreements with Mattel.

Graham v. Scissor-Tail, Inc.,

28 Cal.3d 807, 820 , 171 Cal.Rptr. 604 , 623 P.2d 165 (1981) (“[Graham] had been a party to literally thousands of ... contracts containing a similar provision. ...”). There is likewise a genuine issue of material fact as to whether the assignment of Bryant’s interest in his ideas would have been unconscionable, since paragraph 2(a) of the Inventions Agreement similarly requires the non-disclosure of employee ideas. Contrary to MGA’s argument, the assignment of ideas is no more offensive to employee mobility than the assignment of inventions, which MGA requires of its employees. Proctor Dec., Ex. 179 at 4604. As long the assignment does not extend to post-employment work, it is generally enforceable.

See Patent & Licensing Corp. v. Olsen,

188 F.2d 522, 525 (2d Cir.1951).

Both motions for summary judgment are denied on this issue of contract interpretation.

B. Timing

Bryant’s Inventions Agreement assigned his right, title, and interest in inventions “conceived or reduced to practice by me (alone or jointly by others) at any time during my employment with the Company.” Proctor Dec., Ex. 124. Prior to the phase 1 trial, Mattel successfully argued that the phrase “at any time during my employment” extends to nights and weekends. (Dkt. 3285 at 5.) On appeal, the Ninth Circuit held that the term “at any time during my employment” was ambiguous. The parties’ exclusion of inventions defined by Cal. Labor Code § 2870

did not necessarily evidence a mutual intent to capture everything else.

The Ninth Circuit’s mandate forecloses this Court from deciding the issue at summary judgment. Concluding that “[e]xtrinsic evidence doesn’t resolve the ambiguity,” the court held that “[t]he issue

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should have been submitted to the jury.” Ninth Circuit Op. at 10539;

see also Narell v. Freeman,

872 F.2d 907, 910 (9th Cir.1989) (“A finding that a defendant copied a plaintiffs work, without application of a substantial similarity analysis, has been made only when the defendant has engaged in a virtual duplication of a plaintiffs entire work.”);

Situation Mgmt. Sys., Inc. v. ASP Consulting LLC,

560 F.3d 53, 58 (1st Cir.2009) (requiring evidence of both factual copying and infringement of protected elements).

B. Substantial Similarity

Summary judgment must be granted where “no reasonable juror could find substantial similarity of ideas and expression viewing the evidence in the light most favorable to the nonmoving party.”

Kouf v. Walt Disney Pictures & Television,

16 F.3d 1042, 1045 (9th Cir.1994). A two part extrinsie/intrinsic test determines whether two works are substantially similar.

See Shaw v. Lindheim,

919 F.2d 1353, 1357 (9th Cir.1990). The extrinsic test requires an objective examination of concrete manifestations of the ideas and expression in the two works, while the intrinsic test requires a subjective evaluation, most often by the fact-finder, of the “ ‘total concept and feel of the works.’ ”

Cavalier v. Random House,

297 F.3d 815 ,

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822 (9th Cir.2002) (quoting

Kouf,

16 F.3d at 1045 ).

The “extrinsic” test originally required a comparison of only the ideas expressed by the two works, but has since been augmented to include an objective examination of articulable similarities in both ideas and expression.

Funky Films,

462 F.3d at 1077 (quoting

Kouf,

16 F.3d at 1044 ).

This inquiry focuses on whether “the specific details of an author’s rendering of ideas ... standing alone, are substantially similar.”

Funky Films,

462 F.3d at 1078 (quoting

Metcalf v. Bochco,

294 F.3d 1069, 1074 (9th Cir.2002) and

Cavalier,

297 F.3d at 822).

Specific details, or “protectable elements,” do not include (1)

scenes a faire

that “necessarily result from the choice of a setting or situation,”; (2) purely utilitarian elements; and (3) elements of expression merged with the underlying idea.

See Well-Made Toy Mfg. Corp. v. Goffa Intern. Corp.,

210 F.Supp.2d 147, 160-161 (E.D.N.Y.2002);

see also Apple Computer, Inc. v. Microsoft Corp.,

35 F.3d 1435, 1444 (9th Cir.1994). Because both the extrinsic and intrinsic tests must be satisfied in order to prove substantial similarity, a “plaintiff who cannot satisfy the extrinsic test necessarily loses on summary judgment.”

Kouf,

16 F.3d at 1045 .

1. The Sculpt

A genuine issue of material fact exists as to whether MGA’s Bratz Production Sculpt (TX 17733) infringed Bryant’s sculpt (TX 1136), in which Mattel registered a copyright. Since “[t]he expression of an attractive young, female fashion doll with exaggerated proportions is [ ] highly constrained,” the protectable elements subject to an extrinsic analysis are few, and the standard to be applied at the intrinsic stage is virtual identity overall. Am. Ninth Cir. Op. at 10544 & n. 9 (“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 overall.”).

Both the Bratz production sculpt and Bryant’s sculpt depict a young, female fashion doll with exaggerated proportions — an unprotectable idea. The Bratz production sculpt and Bryant’s sculpt also share large heads, thick lips, high cheekbones, slim arms, long legs, and slim torsos, all of which are unprotectable features as they are required by the underlying idea.

A reasonable fact-finder could conclude that the protectable expression of the Bryant sculpt is substantially similar to

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the Bratz production sculpt. For instance, a reasonable jury could find that the precise shape, size, and placement of the ears on the Bratz Sculpt and the Bryant Sculpt are substantially similar. In particular, a jury could find that the inner ear cochlea separates from the outer ear in an identical manner on both sculpts. A jury could further find that the precise design of the nose is substantially similar, noting that both sculpts almost completely lack a nasal bridge. With respect to overall face shape, a reasonable jury could find that the rear-most point of the scalp on both sculpts similarly slopes down to the jaw at about a fifteen degree angle before immediately curving forward at about a five degree angle.

A reasonable jury could also find substantial similarity in the precise angles, measurements, and shapes of the sculpts’ midsections. For example, although the sculpts have very small, defined waists, both have a slightly protruding, rounded lower stomach. Both sculpts also lack the roundness in the breast area that is common to many other fashion dolls with exaggerated, idealized proportions. Likewise, a reasonable jury could note substantial similarity in the uniquely rounded shoulders of both sculpts, as well as the way in which both sets of lower arms flare out from the body in an unnatural and unrelaxed state. Looking at the back of the sculpts, a reasonable jury could find substantial similarity in noticeable indentation that exists between both sculpts’ shoulder blades. A view of the sculpts’ profile reveals the dramatic S-shaped curve in both sculpts’ spines.

Both on this illustrative list of substantial similarities in protectable elements of the sculpt, a genuine issue of material fact remains as to whether the Bratz Sculpt infringes Bryant’s Sculpt.

MGA’s request for summary judgment is therefore denied.

2. First Generation Dolls

MGA contends the first generation of Bratz dolls are not substantially similar to any of Bryant’s sketches.

(a). First Generation Jade

There is a genuine issue of material fact as to whether there are articulable similarities between the first generation Jade doll and Bryant’s Jade sketches. Both the doll and the sketches express the idea of a complete, young, hip female fashion doll who wears trendy clothing and exhibits a bratty look or attitude. The doll and sketches use exaggerated physical proportions to express this idea, including larger eyes, heads, lips and feet, longer legs, and skinnier torsos and limbs than found in nature; however, the mere fact of these exaggerated features is both unoriginal and an unprotectable idea.

See

Ninth Circuit Op. at 10546-10547;

cf. Mattel, Inc. v. Goldberger Doll Mfg. Co.,

365 F.3d 133 , 136 (2d Cir.2004) (“An upturned nose, bow lips, and wide eyes are the ‘idea’ of a certain type of doll face. That idea be

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longs not to Mattel but to the public domain.”).

The dolls and sketches nevertheless share many protectable features, including “fashions and hairstyles.” Ninth Circuit Op. at 10547. Both the doll and the girl in the sketch don pink, midriff-baring, short sleeved t-shirts. On the center of the t-shirts is an emblem of a creature that appears to be a pink Cheshire-like cat with green eyes.

Compare

TX 1107

with

TX 17551. The t-shirts are worn over a long-sleeved, off-pink shirt adorned with dark pink, light pink, and white polka dots.

See id.

The doll and the girl in the sketch wear olive-green, flared, non-denim pants with off-pink vertical piping that runs down the outer seam.

See id.

Both the doll and the girl in the sketch sport red sneakers decorated with pink accenting and a lip on the front of the shoe that curls upwards, and, to complete the look, shoelaces untied.

See id.

Both accessorize with a silver satchel with quilted accenting. The doll and the girl in the sketch complete their look with light-colored lipstick and lip liner, pinkish eyeshadow, and dark bangs that protrude from a flat-topped, pink-based, multi-colored hat with horizontal stripes and two pink thread-braid tassels dangling from the uppermost corners.

The doll and the girls in the sketches also share anatomical similarities unrelated to standard features of the underlying idea, especially -with respect to the eyes. For example, the doll and sketches both depict three equidistant and identically shaped eyelashes, having an equal and triangular girth, on each doll eye, with each of the eyelashes protruding from the eyelid at identical angles.

Compare

Ex. 302 at MGA 006463

with

TX 17551-001. Although the upper eyelid in Bryant’s Jade sketches droops a little lower than on the doll, the dolls and sketches all lack a lower eyelid and the surface area between the top of the upper eyelid and the bottom of the upper eyelid is consistent across the eyelid between the sketches and doll.

See id.

The doll is also substantially similar to the sketches’ particular expression of the eyes: the pupils are dilated in a nearly identical manner, with the pupils situated at the top center of the iris (these sketches apparently depict young female fashion dolls with defective vision), and the inner corner where the upper and lower eye lids meet sits at the center of the nose.

Id.

To be sure, there are dissimilarities between the doll and sketches. For example, the doll wears rolled up pants made of a shiny fabric that resembles an alligator’s skin. By contrast, the pants worn by the doll depicted in the sketch appear to be made of cotton, and fall over the shoes depicted in the sketch; the pants drawn in the sketch also feature prominent orange piping. The doll’s shoes reveal more white cushioning on the outside of the shoe than the shoes depicted in the sketch. The satchel depicted in the sketch bears the word “Purrfect” and the doll’s satchel has no lettering or otherwise narcissistic terms incorporating sounds commonly made by animals. The doll’s lips are darker than the lips depicted in the sketch, and the doll’s eyeshadow is two-toned and more dramatic than the eyeshadow depicted in the sketch. Finally, the girl depicted in the sketch has rosier cheeks and shorter hair (in pigtails) than the doll.

A reasonable fact-finder could easily conclude that there are articulable and substantial similarities between the protectable expression of the Jade sketch (Trial Exhibit 1107, 10638) and sculpt (Trial Exhibit 17551). MGA’s request for

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summary judgment as to the first generation Jade doll is therefore denied.

(b). First Generation Cloe

There is likewise a genuine issue of material fact as to whether the first generation Cloe doll and Bryant’s sketches are substantially similar in their expression of the underlying idea.

Compare

TX 1109, 771

with

TX 13903-001. Both the doll and the sketches express the idea of a complete, young, hip female fashion doll who wears trendy clothing and exhibits a bratty look or attitude. The doll and sketches share exaggerated physical proportions, including larger eyes, heads, lips and feet, longer legs, and skinnier torsos and limbs than found in nature; however, the mere fact of these exaggerated features is both unoriginal and an unprotectable idea.

See

Ninth Circuit Op. at 10546-10547;

cf. Goldberger Doll Mfg. Co.,

365 F.3d at 136 (“An upturned nose, bow lips, and wide eyes are the ‘idea’ of a certain type of doll face. That idea belongs not to Mattel but to the public domain.”).

A reasonable fact-finder could nevertheless conclude that the doll and sketches are substantially similar in their particular expression of these anatomical features.

See id.

(“But Mattel’s copyright will protect its own particularized expression of that idea and bar a competitor from copying Mattel’s realization of the Barbie features.”). For example, both the girl depicted in the sketch and the doll have bright, cerulean eyes with dilated pupils centered on the upper half of the iris. Unlike the eye lids depicted on the Jade doll and in the Jade sketches, which maintain a consistent inward gradient where the upper and lower eye lids meet, both the Cloe doll and Bryant’s Ze sketch depict lower eye lids that drop at a steep gradient and then immediately flatten for the latter half of their approach to the center of the face. Moreover, in addition to the three eye lashes located on the outside corner of the upper eyelid (as found on the Jade doll and in the Jade sketches), the Cloe doll and Ze sketch depict a patch of much smaller eye lashes that protrude from the outside corner of the lower eye lid (the doll’s three eye lashes are evenly spaced but the eyelashes in the sketch appear to merge together).

The doll and the girls in the sketches also share non-anatomical features, including hairstyle and fashions. Both the sketch and doll depict a baby-blue, midriff-baring t-shirt adorned with sequined studding along the collar and the word “Angel” in cursive font in the center of the shirt; sparkling bell-bottom jeans with a fringe on the outer seams and a slit on the bottom outer ankle, which fall over the boots worn in the sketch and on the doll; and a baby-blue, bumpy, rubbery-textured belt with a square buckle. The doll is sold with a jacket worn in the sketch and both three button jackets have fold-over collars, rolled up sleeves, and fringes around the lower seam. Both jackets appear to be composed of the same sparkly denim fabric as the jean pants. The doll is sold with a pair of boots that, like the boots depicted in the sketch, are weighty and white, with an orange and brown buckle that falls on top of the foot. The sketch and the doll share a one-shouldered bag with a white base, teal piping, and a leopard-print flap that covers most of the front of the bag. The sketch and the doll share light blonde, long hair parted to the side and pulled back with a wide headband made of teal and gold fabric. Both have metallic-pinkish lip color, with noticeably contrasting, darker lip liner.

There are nevertheless certain differences between the doll and sketches. In the sketches, the lips are slightly parted, though the doll’s lips remain closed. The doll’s eyes are surrounded by blue eyeshadow, whereas the sketch’s eyeshadow ap

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pears to be more grayish in color. The sketch’s cheeks are more flushed than the doll’s. The doll’s attire also differs from the sketch’s: the leopard-print flap on the doll’s bag overlays a white background whereas the sketch’s leopard-print bag overlays a tan background; the doll’s buttons appear to be more metallic than the sketch’s; the doll’s shirt exposes more of her stomach; and the sketch’s jacket displays more noticeable, defined stitching. In addition, the buckle on the Doll’s belt is silver, and the buckle on the sketch’s belt is baby-blue, like the rest of the belt.

A reasonable fact-finder could easily conclude that the Cloe doll and Bryant’s Zoe sketches share many protectable features. MGA’s motion for summary judgment is therefore denied as to the first generation of Cloe dolls.

(c). First Generation Yasmin

There is a genuine issue of material fact as to whether there are substantial similarities between the protectable elements of Bryant’s Lupe sketch and the first generation Yasmin doll.

Compare

TX 1110

with

TX 13901. Both the doll and the sketches express the idea of a complete, young, hip female fashion doll who wears trendy clothing and exhibits a bratty look or attitude. The doll and sketches share exaggerated physical proportions, including larger eyes, heads, lips and feet, longer legs, and skinnier torsos and limbs than found in nature; however, the mere fact of these exaggerated features is both unoriginal and an unprotectable idea.

See

Ninth Circuit Op. at 10546-10547;

cf. Goldberger Doll Mfg. Co.,

365 F.3d at 136 (“An upturned nose, bow lips, and wide eyes are the ‘idea’ of a certain type of doll face. That idea belongs not to Mattel but to the public domain.”).

The doll also depicts certain non-anatomical features found in the sketch, including fashions and certain elements of the hair style. For instance, the doll and the girl in the sketch don a purple, midriff-baring tube top as well as flared, light-colored pants that fall over pure platform shoes. Both pairs of pants feature prominent stitching along the sides of the outer leg and a pattern at the very bottom of each leg. Both accessorize with a tan satchel cinched at the top with a drawstring bow and decorated with a purple-themed, intricate, geometric pattern. Both sport a suede, maroon/brown bandana with fashion-keyhole designs along the edge that is threaded with an exposed drawstring tied into a bow at the nape. Both wear their hair with two small braids featured towards the front of their heads amongst their flowing locks. And both wear a similar smoky-purple eye makeup and identical lipstick surrounded by dark brown lip liner.

The Yasmin doll also parallels Bryant’s particularized expression of Lupe’s anatomical features. Like the other first generation Bratz dolls and sketches, the Yasmin doll and the girl in the sketch share dilated pupils located in eyes partially covered by upper eyelids. The Yasmin doll and the girl in the sketch both have hazel eyes with a speck of blue, accentuated by four upper eye lashes, as well as eye lashes on the bottom corner of the bottom eye lid of only the left eye. And both have an identically located small dark mole below the left eye.

There are ways in which a fact-finder could nevertheless find that there relevant similarities between the Lupe sketch and Yasmin doll are not substantial. The speck of blue in the doll’s eye is much smaller than in the sketch. Though the doll’s upper lip is smaller than its lower lip, the opposite is true in the sketch. The sketch depicts a large necklace, though the doll wears no such accessory. Moreover, the doll’s eyeshadow contains more shades of brown than the eyeshadow depicted in

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the sketch. Whereas the doll uses her brown bandana as a headband, with the exposed tan drawstring tied into a bow at the nape of the neck, the sketch wears the bandana as a sarong tied diagonally across the hips in the sketch. The doll’s hair is longer and darker than the almost blonde hair depicted in the sketch, though the drawings on the back of the packaging for the Yasmin doll depict the character with lighter hair than the doll itself. The hair in the sketch is pulled back by a pair of barrettes, which the doll does not appear to own. The tube top worn by the doll is a pure magenta color, whereas the tube top depicted in the sketch is a darker purple with subtle pink striping. The doll’s pants are khaki-colored, whereas the pants depicted in the sketch are white. The pattern on the bottom of the pants depicted in the sketch is geometric, with red orange, blue and yellow color themes. By contrast, the embroidery at the bottom of the doll’s pants have two orange stripes and a floral pink and blue pattern. The platform clogs depicted in the sketch are open-toed, whereas the doll’s platform clogs are closed-toed.

A reasonable fact-finder could easily conclude that the protectable details of the rendering of the underlying idea expressed by the sketch (Trial Exhibit 1110) and sculpt (Trial Exhibit 13901) are substantially similar. MGA’s request for summary judgment as to the first generation Yasmin doll is therefore denied.

(d). First Generation Sasha

There is a genuine issue of material fact as to whether the first generation Sasha doll shares protectable elements of Bryant’s Hallidae sketches.

Compare

TX 1108

and

TX 3-5

with

TX 17558. Both the doll and the sketches express the idea of a complete, young, hip female fashion doll who wears trendy clothing and exhibits a bratty look or attitude. The doll and sketches share exaggerated physical proportions, including larger eyes, heads, lips and feet, longer legs, and skinnier torsos and limbs than found in nature; however, the mere fact of these exaggerated features is both unoriginal and an unprotectable idea.

See

Ninth Circuit Op. at 10546-10547;

cf. Goldberger Doll,

365 F.3d at 136 (“An upturned nose, bow lips, and wide eyes are the ‘idea’ of a certain type of doll face. That idea belongs not to Mattel but to the public domain.”).

The doll nevertheless depicts protectable expression found in the sketch, including fashions and hair style. Both the sketches and the doll depict long-sleeved t-shirts with horizontal stripes on the sleeves with a burst of orange in the center. In another Bryant sketch, TX 3-5, Hallidae wears a similar ensemble comprised of a multicolored, striped, long-sleeved shirt overlaid with an orange puffy vest. Both the doll and sketch also depict long, oversized, flared denim skirts with cargo pockets, which fall over remarkably similar white, orange, and blue sneakers with oversized soles and untied white laces. Both also depict blue and orange backpacks that bear the term “hip hop” and, in a display of wit, pictures of bunny rabbits. Both depict long, kinky, black hair trapped underneath silver triangular hats made of a ribbed knitted material and topped with a poof ball. Both depict dramatically defined eyebrows and eyes covered in two-toned eyeshadow, and makeup that includes purple-toned lip liner and loud cheek paint.

There are some elemental differences between the doll and sketches, though the differences between TX 17558 and TX 3-5 are more defined than the differences between TX 17558 and TX 1108, which are minimal. TX 3-5 depicts brown-toned eyeshadow, whereas TX 1108 and the doll share purple-toned eyeshadow. The bunny rabbit on the backpack depicted in TX

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3-5 is more cartoonish than the more realistic bunny rabbit on the backpacks depicted in TX 1108 and the doll (though the doll packaging depicts a bunny that is very similar to the bunny rabbit on TX 3-5’s backpack). The hat depicted in TX 3-5 is orange with stripes, and covers the ears, whereas the hats worn in TX 1108 and on the doll are silver. The hair depicted in TX 3-5 is dreadlocked, whereas the hair depicted in TX 1108 and on the doll is smoother and straight. With respect to differences in clothing, the t-shirt depicted in TX 1108’s t-shirt shows the word “YUM”, whereas the doll’s shirt contains no words, images, or exclamations of satisfaction after a tasty treat. The pocket attached to the skirt depicted in TX 3-5 is located near the thigh, whereas the pockets depicted in TX 1108 and the doll are located near the calf. The pocket in sketch 3-5 is near the thigh, whereas the pocket in sketch 1108 is lower on the skirt, near the calf. Both TX 1108 and the doll depict a stitching indicating that the lower portion of the skirt can be removed to transform the skirt into a mini-skirt, but TX 3-5 does not appear to have that design. The shoes depicted in TX 3-5 differ from the shoes shared by TX 1108 and the doll, because the TX 3-5 depicts Timberland boots, whereas sneakers are worn by both TX 1108 and the doll.

A reasonable fact-finder could conclude that the Hallidae sketches and Sasha doll are substantially similar in not just the ideas depicted, but in the expression of those ideas as well.

See Kouf,

16 F.3d at 1045 (summary judgment only appropriate if no reasonable fact-finder could find substantial similarity of ideas and expression). MGA’s motion is therefore denied as to the first generation Sasha doll.

3. Subsequent Generation Dolls

In addressing the district court’s errors, the Ninth Circuit stated that it “fail[ed] to see how the district court could have found the vast majority of Bratz dolls, such as ‘Bratz Funk N’ Glow Jade’ or ‘Bratz Wild Wild West Fianna,’ substantially similar — even though their fashions are hair styles are nothing like anything Bryant drew — unless it was relying on similarities in ideas.” Ninth Circuit Op. at 10547. Since the court must determine at the extrinsic stage whether “no reasonable juror could find substantial similarity of ideas

and

expression,”

Kouf,

16 F.3d at 1045 (emphasis added), the Ninth Circuit’s inability to identify a basis for a substantial similarity determination for dolls with distinct fashions and hair styles from Bryant’s sketches disposes of the vast majority of Mattel’s counter-claim as to the later generations of Bratz dolls.

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Not only do the vast majority of the subsequent generations of Bratz dolls differ in their hair styles and fashions (the two elements identified by the Ninth Circuit), but they lack any meaningful similarities outside of ideas. Like Bryant’s sketches, all of the subsequent generation Bratz dolls express the idea of a complete, young, hip female fashion doll who wears trendy clothing and exhibits a bratty look or attitude. The dolls also depict exaggerated physical proportions, including larger eyes, heads, lips and feet, longer legs, and skinnier torsos and limbs than found in nature; however, the mere fact of these exaggerated features is both unoriginal and an unprotectable idea.

See

Ninth Circuit Op. at 10546-10547;

cf. Goldberger,

365 F.3d at 136 (2d Cir.2004) (“An upturned nose, bow lips, and wide eyes are the ‘idea’ of a certain type of doll face. That idea belongs not to Mattel but to the public domain.”). The similarities end there: with the exception of two subsequent generation dolls (identified below), the dolls sport distinct fashions; make up; jewelry; accessories; hair styles, colors, and sheens; eye colors and shapes; and eye lash shape, size, and texture; from Bryant’s sketches. In its subsequent generation Bratz dolls, MGA unmistakably abandoned Bryant’s particular expressions of the underlying idea.

Mattel nonetheless argues that “the proof of infringement is substantial” as to these subsequent generation dolls, relying upon a report prepared by its expert.

See

Declaration of Lee Loetz in Opposition to MGA MSJ. Mr. Loetz does not analyze the subsequent generation dolls on a doll by doll basis, but instead purports to provide exemplar comparisons of the placement and proportions of body parts,

(id.,

Ex. B at 7), poses,

(id.,

Ex. B at 9), facial elements,

(id.,

Ex. B at 10), and clothing/accessories,

(id.,

Ex. B at 12).

Mr. Loetz’s report commits a number of logical errors that corrode the foundation for his analysis. First, Mr. Loetz attempts, on numerous occasions in his report, to show that “parallels between the drawings and doll faces are not coincidental, but the result of executing the drawings in the dolls.”

See, e.g., id.,

Ex. B at 12. Mr. Loetz confuses evidence of factual copying — which is relevant to a defense of inadvertent infringement — with copying of

original

elements of Bryant’s works that are protectable.

See Goffa Intern. Corp.,

210 F.Supp.2d at 159 . So long as the parallels between the drawings and the subsequent generations of dolls were parallels in ideas or unprotectable expression, MGA was free to execute the drawings with impunity.

Narell,

872 F.2d at 910 .

Second, Mr. Loetz bases almost all of his conclusions about the subsequent generation dolls on the express basis of similarity between ideas and unprotectable elements. For example, Mr. Loetz states that the placement of the body landmarks in the subsequent generation dolls in similar to the placement of such landmarks in Bryant’s sketches, a conclusion that is both factually wrong and irrelevant. The placement of anatomical features is, as Mr. Loetz admits, relevant to making a doll “look older or younger.” Loetz Dec., Ex. B at 7. Elongating the body expresses a different idea about the “age and gender,” since “[a]s the human body grows from child to adult, the body proportions lengthen from top to bottom.”

Id.

Just as “slightly larger heads, eyes and lips; slightly smaller noses and waists; and slightly longer limbs” are elements that necessarily result from the idea of a young, fashion forward female, so too does the idea require “proportionally shorter bodies.” A body with compressed proportions is not a protectable element of Bryant’s sketches and Mr. Loetz admits as much.

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Mr. Loetz commits this error again when he states that the manner in which the facial features are situated in the subsequent generation dolls is substantially similar to Bryant’s drawings. He argues:

The proportional placement of features on the face of a doll design is a key factor in how the design develops its look.

To vary the placement of features on a face is to change who the character will be.

Think of the compressed features of a cute baby, and then think of the elongated features in a traditional ‘evil witch’ character face. There are endless variations in between.

Id.

at 11 (emphasis added).

Each of the endless variations of facial features to which Mr. Loetz refers can express a different idea. Working within Mr. Loetz’s “cute baby” to “evil witch” spectrum, different variations of facial features can express different

ideas

— e.g., a cute witch, an evil baby, a toddler, or an old woman. Mr. Loetz concedes, however, that the compacted features in Bryant’s drawings were necessary to “create a pleasing attractive look,” which is an unprotectable idea that is distinct from the other ideas expressed by the “endless variations” in the placement of facial features discussed in Mr. Loetz’s report. Allowing Mattel to prevent others from depicting the placement of facial features that necessarily result from the idea of a young, fashion forward female with exaggerated features is tantamount to giving Mattel a monopoly over the idea itself.

See

Am. Ninth Circuit Op. at 17341 (“[F]ashion dolls that look like Patty and Selma Bouvier don’t express the idea behind Bratz.”).

Mr. Loetz also argues that the dolls are substantially similar to specific facial features found in Bryant’s sketches, like lips that curve, “the look of a girl who has too much eye makeup on,” oversized almond eyes, and angular eyebrows. Loetz Dec., Ex. B at 11-12. But these unoriginal features are all unprotectable elements of Bryant’s work, because they belong to the underlying idea of a young, fashion-forward doll with exaggerated features and a bratty look or attitude.

Cf. Ideal Toy Corp. v. Sayco Doll Corp.,

302 F.2d 623, 627 (2d Cir.1962) (Clark, J., dissenting) (“But is it so that one gets a 56-year copyright in normal arms and legs of a doll or in a hidden smile? This gives plaintiff a destructive power against competitors of unexplored extent. For a grin or a smirk in their otherwise dissimilar product may turn out to make them accountable as infringers.”). The features discussed by Mr. Loetz

(e.g.,

a heavily made-up young female) are unprotectable ideas and, for the reasons discussed below, the subsequent generation dolls are not substantially similar to Bryant’s particular expression of these ideas.

See Goldberger Doll Mfg. Co.,

365 F.3d at 136 (“Mattel’s copyright will protect its own particularized expression” of the idea of a certain type of doll face composed of “[a]n upturned nose, bow lips, and wide eyes”).

The vast majority of Mr. Loetz’s actual comparisons

{see

Loetz Dec., Ex. B, Ex. 1-25) concern the first generation of Bratz dolls. Those comparisons that concern the subsequent generation Bratz dolls reveal the lack of similarity between the dolls and the protectable elements of Bryant’s sketches. For example, exhibit 20 to Mr. Loetz’s report includes a side-by-side comparison of the head of a subsequent generation Cloe doll with Bryant’s Lupe sketch. Both the doll and sketch share large eyes, large parted lips, light colored hair, and heavily made up eyes, none of which are protectable elements. The particularized expression of each of these elements is not similar, let alone substantially similar: the lips are of a different shape and color, the eyes rounder, the eye lashes more numerous and spaced

*958

differently, the faces shaped differently, and the hair of a different color, sheen, and style. The comparison between a subsequent generation Sasha doll and Bryant’s Hallidae sketch located at exhibit 21 of Mr. Loetz’s report reveals even more dissimilarities in Bryant’s particular expression of the unprotectable idea: the hairstyles, lips, eye lashes, and face shape, and skin tone are all different.

Mattel attempts to remedy these defects by pointing to Mr. Loetz’s conclusion that the dolls have “a visual consistency from Carter Bryant’s sketches, to the first wave of dolls, and through the later waves of Bratz dolls, even including the most recent 2010 Bratz dolls.” Mattel Mot. at 40. Mr. Loetz’s observation may have be relevant to an intrinsic examination, which involves “mere subjective judgment as to whether two [] works are or are not similar.”

Shaw,

919 F.2d at 1357 . Since “objective manifestations of creativity” must be examined in the “extrinsic” test, the absence of any similarity in protectable expression, from fashions, to hair styles, to facial features, make up, and the eyes, means that Mattel cannot show a genuine issue of material fact on the extrinsic test for the subsequent generation Bratz dolls.

Nevertheless, there are two subsequent generation dolls as to which an “indicia of sufficient disagreement concerning the substantial similarity of [the] two works” remains.

Swirsky v. Carey,

376 F.3d 841, 846 (9th Cir.2004) (internal citations omitted). First, a reasonable fact-finder could conclude that Ooh La La Cloe is substantially similar to the protectable elements of the sketch depicted in TX 5.051, TX 11810.001. Ooh La La Cloe likes to shop til she drops at “the world’s most chic boutiques” and wears a fashion ensemble that resembles the ensemble depicted in the sketches: a plaid, short, Aline skirt with a ribbon around it; a midriff-baring, slightly scoop-necked shift worn underneath a cropped jacket with a flared collar, chest-level pockets, and exposed stitching; (differently adorned and shaped) knee-high boots; and a distinctively-shaped, pleated, somewhat floppy hat that falls to the middle of the forehead and tilts to one side in a loose manner. Second, a reasonable fact-finder could conclude that Formal Funk Dana is substantially similar to protectable elements of TX 3^4. Formal Funk Dana is dressed for the ball and, like the doll in the sketch, wears a midriff-baring, two-pieced gown that is cinched at the waist with a bow, a sequined top held up by two thin shoulder straps, and, to finish her look, a beaded, dangling, choker and drop-earrings, as well as a triangle, sequined tiara.

For the foregoing reasons, MGA’s Motion is granted as to all subsequent generation Bratz dolls with the exception of Ooh La La Cloe and Formal Funk Dana.

C. Lost Opportunity Damages

MGA argues that Mattel should be precluded from recovering damages that flowed from a speculative lost opportunity to exploit the Bratz creative works. The Copyright Act provides for the recovery of “actual damages” and “wrongful profits.”

Polar Bear Prods., Inc. v. Timex Corp.,

384 F.3d 700 , 707 (9th Cir.2004).

Other than asserting in conclusory fashion that Mattel is precluded from recovering “infringer’s profits against MGA,” MGA does not meaningfully challenge Mattel’s ability to recover “wrongfully obtained profits resulting from the infringement.”

Polar Bear,

384 F.3d at 707. MGA’s challenge is limited to the actual damages that Mattel can recover from MGA under a lost opportunity theory. To the extent Mattel intends to rely upon such a theory at trial, there is a genuine issue of material fact as to whether Mattel would have exercised the opportunity to

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use the Bratz works absent MGA’s infringement of those works.

III. Misappropriation of Trade Secrets

Mattel’s third counter-claim seeks to hold MGA, MGA Mexico, Larian and Machado liable for misappropriating Mattel’s trade secrets. Mattel alleges the illegal acquisition, use and disclosure of its trade secret materials, which include “documents, materials, designs, names, and other information stolen by Machado, Trueba, Vargas, Brisbois, Castilla, Cooney, Contreras, Brawer, other former Mattel employees, and other persons acting for, on behalf of or at the direction of MGA and/or Larian.” 4AAC ¶ 134.

California’s Uniform Trade Secrets Act proscribes the improper disclosure, acquisition or use of a trade secret. Cal. Civ. Code § 3426.1 . The term “trade secret” is defined by the Act as:

[I]nformation, including a formula, pattern, compilation, program, device, method, technique, or process, that:

(1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure; and

(2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

Id.,

§ 3426.1(d).

Information derives independent economic value from not being generally known when its secrecy “provides a business with a ‘substantial business advantage.’ ”

Morlife, Inc. v. Perry,

56 Cal.App.4th 1514, 1522 , 66 Cal.Rptr.2d 731 (1997) (quoting

Klamath-Orleans Lumber, Inc. v. Miller,

87 Cal.App.3d 458, 465 , 151 Cal.Rptr. 118 (1978)). Both parties request broad summary judgment rulings on the issue of whether Mattel’s alleged trade secrets derived independent economic value from not being generally known. The parties’ briefs failed to discuss each alleged trade secret with particularity, but the Court nevertheless proceeds to analyze Mattel’s counter-claim by considering the evidence as to each trade secret. For the reasons that follow, the Court finds genuine issues of material fact as to the independent economic value that the vast majority of Mattel’s alleged trade secrets derived from not being generally known.

The determination of whether information is the subject of efforts that are reasonable under the circumstances to maintain its secrecy is fact specific.

See Rockwell Graphic Sys., Inc. v. DEV Indus., Inc.,

925 F.2d 174, 176-77 (7th Cir.1991). It is relevant whether an employer “required its employees to sign confidentiality agreements respecting its trade secrets.”

See MAI Sys. Corp. v. Peak Comp., Inc.,

991 F.2d 511, 521 (9th Cir.1993). However, an employer’s vague descriptions of exactly what it is that constitutes a trade secret renders the confidentiality agreement largely meaningless. Moreover, an employer’s failure to mark documents as confidential or trade secret “precludes in many cases trade secret protection for those materials.”

Gemisys Corp. v. Phoenix Am., Inc.,

186 F.R.D. 551, 559 (N.D.Cal.1999) (citing

Jensen v. Redevelopment Agency of Sandy City,

998 F.2d 1550, 1557 (10th Cir.1993)). At the same time, it makes no sense to hold, as a matter of law, that the failure to mark documents as confidential precludes a finding of reasonable efforts, since the very employee directed to create and mark as confidential the trade secret may be the individual who later misappropriates it. On the basis of these principles, the Court finds genuine issues of material fact as to whether Mattel took reasonable efforts to maintain the secrecy of its trade secret materials. Although Mattel conducted ex

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tensive employee training, had its employees sign agreements, and controlled access to its databases, it often provided vague direction to its employees and in many circumstances failed to mark proprietary documents, including the documents that are at issue in this case, as confidential.

A. Bratz

Mattel claims that the Bratz fashion doll concept is a trade secret, to which Mattel claims ownership under the assignment clause of the Inventions Agreement. The concept includes the group name Bratz, the four doll names Jade, Hallidae, Lupe, and Ze, as well as the doll designs, fashions, themes, and marketing slogans in Bryant’s pitch book. It is undisputed that Bryant disclosed the Bratz concept to MGA and shared his pitch book and concept sculpts with MGA while he was still employed by Mattel. (Bryant Tr. 2481:18-2482:5.) It is also undisputed that the dolls eventually released to market by MGA used the names Bratz and Jade.

1. MGA’s Procedural Objection

On the grounds that a trade secret counter-claim predicated upon the acquisition, disclosure, and use of the Bratz concept implicated phase 1 issues, the Court refused to allow Mattel to allege the Bratz concept was a trade secret until the Ninth Circuit ruled on MGA’s appeal from the post-phase 1 equitable relief. Following the Ninth Circuit ruling, Mattel timely moved to confirm the pendency of a trade secret misappropriation counter-claim predicated upon the disclosure, acquisition, and use of the Bratz fashion doll concept. On the basis of extensive briefing and oral argument, the Court granted Mattel’s request. MGA “reiterates its objection to amendment of Mattel’s pleading,” and claims to have suffered prejudice as a result of Mattel’s “change [in] legal theory,” which MGA claims “violated the [Ninth Circuit’s] mandate.” (MGA MSJ at 25 & MGA Reply at n. 2.)

MGA’s request for reconsideration of the two-month old order granting Mattel’s motion to confirm is denied as untimely.

United States v. Comprehensive Drug Testing, Inc.,

473 F.3d 915, 928-29 (9th Cir.2006). MGA’s request for reconsideration is also denied because no “new material facts or a change of law occurring after the time” of the court’s order compel a different outcome. Local Rule 7-18. To the contrary, the Court has since granted MGA a new trial on all phase 1 issues, eliminating the potential that Mattel’s Bratz trade secret counter-claim will undermine the phase 1 jury’s findings.

MGA’s arguments are not just procedurally defective but predicated upon a paranoid misreading of trade secret law. MGA is specifically concerned that identifying the Bratz concept as a trade secret allows Mattel to (1) lose the contractual assignment issues discussed above and still capture the Bratz line; and (2) avoid the supersessive effect of California’s Uniform Trade Secret Act. Neither concern is valid.

Mattel cannot prevail on a trade secret misappropriation counter-claim predicated upon the acquisition, disclosure, or use of the Bratz concept unless it proves it owned the concept.

See Cytodyn, Inc. v. Amerimmune Pharmaceuticals, Inc.,

160 Cal.App.4th 288, 297 , 72 Cal.Rptr.3d 600 (2008) (“[A] prima facie claim for misappropriation of trade secrets ‘requires the plaintiff to demonstrate [that it] owned [the] trade secret’”) (citation omitted).

Identifying the Bratz concept as a trade secret does

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not diminish, or even affect, Mattel’s burden to prove that Bryant assigned his rights to the ideas and creative works that composed the Bratz concept. Of course, by proving the doll names Bratz and Jade are trade secrets, Mattel may defeat MGA’s challenge to the existence of a property right in an idea.

See Silvaco Data Sys. v. Intel Corp.,

184 Cal.App.4th 210, 239 , 109 Cal.Rptr.3d 27 (2010) (“Information is not property unless some law makes it so.”). But MGA already failed to convince the Ninth Circuit that ideas are not property. Section IA2,

supra.

More importantly, information (or an idea) does not become a trade secret only when it is so alleged; whether the ideas behind the Bratz concept were or were not trade secrets is unrelated to Mattel’s pleading.

MGA commits a similar error when it argues that Mattel’s dilatory identification of the Bratz and Jade names as trade secrets prevented MGA from arguing during phase 1 that the Uniform Trade Secrets Act superseded the constructive trust or Mattel’s conversion claim. An allegation of trade secret misappropriation is not a prerequisite to UTSA supersession. (Dkt. 8705 at 5.) To the extent the formal assertion of a trade secret misappropriation allegation predicated upon the acquisition, disclosure, and use of the Bratz concept reminded MGA to argue that UTSA supersedes Mattel’s claim(s), MGA may have actually

benefitted

from Mattel’s identification of the Bratz concept as a trade secret.

MGA also argues that Mattel’s identification of the Bratz concept as a trade secret is untimely. As discussed in greater depth in the Court’s Order granting Mattel’s motion to confirm, the parties’ have long operated under the understanding that Mattel’s trade secret misappropriation counter-claim encompassed the Bratz and Jade names. MGA’s counsel remarked at a deposition in early 2010:

Well, let me say this. It’s part of Phase 2. They have made a trade secret misappropriation claim based on Bratz. Let me say that again. There is a trade secret misappropriation claim in Phase 2 with an allegation of willful misappropriation of trade secrets against MGA Entertainment and Mr. Larian based on Bratz.

(Dkt. 8705 at 3-4.)

Finally, MGA claims that it “continue[s] to dispute that the [4]AAC contains a Bratz and Jade trade secret misappropriation claim,” noting that the Court never ruled on Mattel’s request to formally amend its pleading to expressly allege the misappropriation of the Bratz and Jade doll names. (MGA MSJ at 61 n. 10.) Mattel’s failure to expressly allege the predicate facts for each of its counter-claims is unremarkable; the parties have long accepted that each other’s pleadings need not specifically enumerate all the factual predicates for each claim. For example, MGA’s claim for trade dress infringement does not identify the specific trade dress allegedly infringed by Mattel, which MGA only definitively identified a few months ago, more than five years after filing its Complaint. Mattel’s request for leave to amend was immaterial and irrelevant to its motion to confirm, and the Court’s failure to rule on Mattel’s request does not undermine the force of its Order granting the motion to confirm.

2. The Bratz Concept as a Trade Secret

MGA argues that, even assuming Bryant’s Inventions Agreement assigned to Mattel some right, title, and interest in the idea for the Bratz fashion doll concept, Bryant’s disclosure and MGA’s acquisition and use of those doll names did not constitute misappropriation because a doll concept and doll names are not trade secrets.

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Concepts can have value independent from the product they eventually inspire.

Cf. Learning Curve Toys, Inc. v. Play-Wood Toys, Inc.,

342 F.3d 714, 726 (7th Cir.2003) (finding issue of fact as to whether “concept for noise-producing toy railroad track” was trade secret);

see also

2 Roger M. Milgrim,

Milgrim on Trade Secrets

§ 9.05[4], at 9-487-9-488.2 & n. 36 (Eric E. Benson, ed., 2003 rev. ed. & 2009 supp.) (explaining that trade secrets may reside in “confidential disclosures of concepts, or as yet-untested, ideas for a new product or new process”). Mattel, for instance, invests a tremendous amount of material and human resources into the development of product concepts and ideas, including product names. Mattel’s Design Center houses hundreds of employees who experiment with doll names, fashions, and accessories. Internal correspondence exhibits a compulsion with getting the doll names exactly right.

See

Ex. 314 to MGA MSJ. For example, a memoranda to Mattel employees conceded:

Consider Barbie for example. A Barbie doll is made up of plastic, fabric, paint, synthetic hair, as well as cardboard and cellophane for the box, which combined is worth only a few dollars. Why then will a consumer pay $10, $20, $30 or more for this particular mix of raw materials? A primary reason is the name “Barbie.” This name means something special to little girls all over the world; it inspires fashion, friendship, association, dreams, fun.

See

Declaration of Richard DeAnda, Ex. A.

MGA argues that a product name or concept lacks independent economic value from the product with which it is associated, but this is a chicken and egg dilemma appropriate for resolution by a fact-finder. MGA’s own witness, and a key member of the Bratz team, previously recognized that “a toy manufacturer’s unreleased toy concepts ... are among its most highly valuable trade secrets.” Declaration of Paula Garcia in support of Carter Bryant and MGA’s Motion for Clarification (Zeller Dec., Ex. 13) 4. Larian similarly conceded that MGA considered a product name to be a trade secret while the product was still in development. Deposition of Isaac Larian, Vol. VII, dated January 20, 2010 (Buchakjian Dec., Ex. 74), at 1799:5-15. A reasonable fact-finder could certainly conclude that the Bratz concept, including the names Bratz and Jade, derived no independent economic value from not being generally known. However, MGA’s failure to cite any evidence supportive of its position, as well as the wealth of evidence discussing the value independently generated by doll concepts in the toy industry, precludes the entry of summary judgment.

MGA also argues that the easy accessibility of the names Bratz and Jade (both are words that can be found in the dictionary) means the names lack novelty and therefore aren’t trade secrets. But Mattel does not allege that the words Bratz and Jade are trade secrets in a vacuum just as the developer of a formula can’t claim that the numbers and variables that compose the formula are trade secrets.

O2 Micro Int’l Ltd. v. Monolithic Power Sys., Inc.,

420 F.Supp.2d 1070, 1089-1090 (N.D.Cal.2006) (“It does not matter if a portion of the trade secret is generally known, or even that every individual portion of the trade secret is generally known, so long as the combination of all such information is not generally known.”). Mattel argues that doll names Bratz and Jade are novel — -an argument MGA does not challenge with, for example, evidence that any doll sold in the course of toy history used the name Bratz or Jade.

MGA instead responds that treating easily discoverable product ideas as trade secrets will incentivize Mattel (or any other corporation) to “giv[e] each of its employees a dictionary and inform[ ] them that every name has been or will be con

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sidered a product name.” However, MGA’s concern is misplaced because the UTSA does not prevent a person from using independently developed or properly obtained trade secret information already in the possession of another.

See

Cal. Civ.Code § 3426.1(a);

Composite Marine Propellers, Inc. v. Van Der Woude,

962 F.2d 1263, 1265-66 (7th Cir.1992) (finding that plaintiff “must establish” that the trade secrets were “misappropriated (that is, stolen from it rather than developed independently or obtained from a third source)”);

see also E.I. Du Pont de Nemours & Co. v. U.S.,

153 Ct.Cl. 274 , 288 F.2d 904, 911 (1961) (“A plurality of individual discoverers may have protectible, wholly separate rights in the same trade secret.”). “Trade secret law, in short, protects only the right to control the dissemination” by Mattel employees of their ideas for doll names.

Silvaco Data Sys. v. Intel Corp.,

184 Cal.App.4th 210, 221 , 109 Cal.Rptr.3d 27 (2010).

MGA’s arguments are better addressed to a fact-finder tasked with determining whether the doll names Bratz and Jade qualify as trade secrets; in particular, whether the names derive independent value from not being generally known. Though MGA challenges this basis for Mattel’s counter-claim, it cites no material evidence to aid the Court’s evaluation of the issue.

B. Misappropriation of Other Mattel Information

Due to the commercial success of the Bratz dolls, MGA expanded its corporate operations between 2001 and 2006. Part of MGA’s expansion involved the recruitment of employees from Mattel. Mattel’s third counter-claim alleges that MGA should be held liable for alleged acts of misappropriation committed by nine of these former Mattel employees, three of whom — Machado, Mariana Trueba, and Pablo Vargas — were recruited away from Mattel Servicios, S.A. (Mattel Mexico’s subsidiary) to be founding members of MGA Mexico. Machado is also a named counter-defendant to this counter-claim. Mattel, MGA, and Machado move for summary judgment on various elements of this counter-claim.

1. Ron Brawer

Former Tyco Toys, Inc. employee Ron Brawer (“Brawer”) was retained when Mattel acquired Tyco in 1997. Between 1997 and his September 17, 2004 resignation, Brawer held the posts of Marketing Director and Senior Vice President/General Manager, in which he directed teams of employees who worked with Mattel’s retailer accounts. MGA recruited him away from Mattel with a competitive salary package but, more importantly, equity in MGA in anticipation of an Initial Public Offering. Mattel responded by escorting Brawer from the premises about 20 minutes after he tendered his letter of resignation. Deposition of Ron Brawer, dated February 5, 2008, Vol. I, at 127:11-24;

see also

Ex. 4252 to MGA MSJ. Mattel also directed a team of private investigators to shadow Brawer, Brawer’s wife, and Brawer’s young children, whose activities the investigators recorded via videotape and shared with Mattel’s legal department.

Brawer attempted to re-negotiate Mattel’s confidentiality agreements prior to his departure, and even before he accepted an offer with MGA. For example, in response to a March 5, 2004 request from the Director of Barbie Brands that all Mattel executives sign a revised Code of Conduct, (Webster Dec., Ex. 487), Brawer complained that “[t]here is one section of the document that contains new and fairly broad language” regarding confidentiality obligations, and expressed an intent to subject the language to an outside review

(id.,

Ex. 488). On August 13, 2004, and while his employment negotiations with MGA were ongoing

(see id.,

Ex. 480),

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Brawer asked to re-negotiate paragraph 6 of his employment agreement, which concerned his confidentiality obligations

(id.,

Ex. 486). During his post-resignation exit interview, Brawer did not sign Mattel’s standard Exit Interview and Checkout Form for Executives, which also addressed Brawer’s obligation to not disclose or use Mattel’s confidential information after his departure

(id.,

Ex. 490).

Brawer’s September 17, 2004 employment agreement with MGA also emphasized that he keep his contractual obligations to Mattel. (Ex. 4240 to MGA MSJ.) MGA reminded Brawer to “not retain any of Mattel’s property or confidential and proprietary information ... nor should you use or disclose Mattel’s property and/or confidential and proprietary information in connection with your employment at MGA.”

(Id.)

Mattel alleges that Brawer disregarded the instructions from both Mattel and MGA by disclosing Mattel’s “ideas, designs, and conception for a fashion doll theme” called “Swappin’ Styles” that MGA thereafter used for a line of Bratz dolls. (Webster Dec., Ex. 305 at 189.)

There is a genuine issue of material fact as to whether Mattel’s unreleased product idea for a line of dolls with interchangeable heads and fashions derived independent value from not being generally known to the public. MGA moves for summary judgment on this issue but cites no evidence or law, resting its argument on two appellate cases that discuss the parties’ burdens on a motion for summary judgment. (MGA SF ¶ 102(d) (citing

Celotex Corp. v. Catrett,

477 U.S. 317 , 106 S.Ct. 2548 , 91 L.Ed.2d 265 (1986) and

Devereaux v. Abbey,

263 F.3d 1070 (9th Cir.2001) (en banc)).) However, as discussed earlier, one of MGA’s employees submitted a declaration in this lawsuit claiming that “a toy manufacturer’s unreleased toy concepts ... are among its most valuable trade secrets.” Garcia Dec. ¶ 4. The disclosure of certain forthcoming product lines well before they hit the market, especially in the toy industry in which the product concept arguably requires more effort than its execution, may prevent a manufacturer from enjoying the potential benefits of primacy.

See Sikes v. McGraw-Edison Co.,

665 F.2d 731, 733-34 (5th Cir.),

cert. denied,

458 U.S. 1108 , 102 S.Ct. 3488 , 73 L.Ed.2d 1369 (1982);

but see Richter v. Westab, Inc.,

529 F.2d 896, 900 (6th Cir.1976) (holding that any product idea that would be obvious upon the product’s release is not a trade secret);

see also Hudson Hotels Corp. v. Choice Hotels Intern.,

995 F.2d 1173, 1178 (2d Cir.1993) (comparing cases and noting that “[i]n the premarketing stage, the question whether a marketing concept or new product idea can constitute a trade secret is murkier.”). Not all product plans derive independent economic value from not being generally known to the public, but some may. Given MGA’s failure to present any evidence as to the economic value Mattel obtained from keeping MyScene Swappin’ Styles secret prior to its release,

the Court finds

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the issue appropriate for resolution by a fact-finder.

There is also a genuine issue of material fact as to whether the MyScene Swappin’ Styles product plan was subject to reasonable efforts under the circumstances to maintain its secrecy. MGA argues that Mattel failed to either inform Brawer of his obligation to not misappropriate information after he resigned or warn MGA about Brawer’s potential misappropriation. MGA UF ¶ 102(c). However, Mattel’s efforts to bind and remind its employees to keep business information confidential is well documented.

See, e.g.,

Declaration of Kimberly Graham in support of Mattel’s MSJ ¶¶ 3-25 (discussing efforts to encourage employee secrecy from beginning to end of employment relationship). Brawer acknowledged receiving a notice reminding him of these obligations while he was in the process of participating in company-wide discussions about the release of MyScene Swappin’ Styles. (Webster Dec., Ex. 488.) On the other hand, Mattel’s company-wide circulars did not discriminate between categories of business information or illustrate confidential information.

See, e.g.,

Graham Dec., Ex. 16. Neither Mattel nor MGA cites any evidence specific to Mattel’s efforts to maintain the secrecy of Swappin’

Styles

— e.g., Mattel’s communications with retailers.

Finally, there is a genuine issue of material fact as to whether Brawer disclosed and MGA improperly acquired knowledge about Mattel’s MyScene Swappin’ Styles doll. On the one hand, MGA deliberately created a line of dolls sporting interchangeable heads and clothing on the heels of MyScene Swappin’ Styles’ release, acting with urgency and with apparent knowledge of Swappin’ Styles’ impending release to market.

See

Webster Dec., Ex. 8 (stating that project for interchangeable heads “back on” in apparent bid to beat Mattel to market). On the other hand, MGA’s 30(b)(6) designee testified that the company had long planned for the release of a product with interchangeable

heads

— i.e., the fact that it was released at the same time as Mattel’s product was purely coincidental and not the consequence of any improperly acquired knowledge of Mattel’s upcoming product lines. MGA 30(b)(6) Depo. Vol. XXV, dated October 4, 2010, at 6123. The same witness, however, claimed that the genesis for this product could be found in Bryant’s portfolio,

(id.

at 6123:4-6), even though Bryant’s portfolio only discusses interchangeable fashions, and not heads. Since a reasonable fact-finder could either conclude that the evidence shows improper acquisition, disclosure and/or use or that it doesn’t, summary judgment cannot be granted on this element of Mattel’s third counter-claim.

2. Nick Contreras

Nick Contreras (“Contreras”) served as a Manager on Mattel’s Customer Business Team for a retailer named Target. He started at Mattel in 1994, earning a salary of approximately $2,760.00 per month. (Ex. 1913 to MGA MSJ.) Ten years later, and after ascending Mattel’s hierarchy, he

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accepted a position with MGA, where he officially started work on November 29, 2004. (Deposition of Nick Contreras, dated January 28, 2008, at 204:22-24.) In a January 11, 2009 interrogatory response, Mattel identified twenty-four Mattel trade secrets allegedly misappropriated by Contreras and MGA. (MGA SUF ¶ 110.) On October 26, 2010, after the deadline for the filing of motions for summary judgment, Mattel abandoned the claim that any of these 24 categories of information constituted trade secrets. (Webster Dec., Ex. 305.)

To the extent Mattel’s third counter-claim arises out of Contreras’ conduct, it’s now predicated upon Contreras’ alleged attempt to recruit a subordinate from his time at Mattel to join MGA and to ask that the subordinate download documents to a thumb drive.

Contreras resigned from Mattel by a letter dated October 29, 2004 and was escorted out of the building. (Ex. 1917 to MGA MSJ.) During a short break in employment before he started working at MGA, Contreras allegedly met with Yoon Jung Kim (“Susan Kim”), who worked for him at Mattel, and has since left Mattel to pursue a graduate degree in business administration. (Deposition of Susan Kim, dated January 18, 2010, at 44-45.) Kim claims that Contreras “indicated that he would want me to come and work for him at MGA, and he [ ] also [ ] asked me to take a thumb drive [ ] that he gave me at this meeting and download certain files from our network for his use for what he said was formatting reasons.”

Id.

at 43-44;

see also

Declaration of Susan Kim ¶ 4 (same). Contreras denies ever asking Kim to download documents or even recruiting Kim to join MGA, although an email sent by Brawer to Larian while MGA was recruiting Contreras predicted that “he will want to bring an analyst who works for him named Susan Kim (she is fantastic) ... a real work horse who gets the numbers right.” (Webster Dec., Ex. 191.)

Even though there is an issue of fact as to whether Contreras induced Kim to download materials from Mattel’s servers, that fact is immaterial to Mattel’s third counter-claim. Although Kim claims she initially agreed to download the requested materials, she ultimately “didn’t think it was the right thing to do, and [ ] felt very awkward about the request.” Kim Depo. at 64:17-19. The undisputed evidence establishes that, whether or not Contreras intended to misappropriate Mattel trade secrets, his alleged efforts failed.

Mattel concedes that Contreras did not misappropriate trade secrets, but maintains that Contreras’ “attempt shows that the other multiple thefts by persons departing for MGA were deliberately orchestrated by MGA, rather than mere coincidence as MGA would have it.” (Mattel Opp. at 15.) While Mattel’s arguments about the probative value of Contreras’ conduct may certainly prove interesting in the context of a motion in limine to exclude evidence of the conduct, they have no bearing on whether Mattel’s third counterclaim can arise out of conduct that Mattel concedes does not give rise to liability under UTSA. Mattel cannot ignore that its operative pleading defines the allegedly stolen trade secret material to include “documents, materials, designs, names, and other information stolen by ... Contreras.” 4AAC ¶ 134. Mattel now concedes that it can prove no portion of this allegation and MGA’s motion is accordingly granted as to Mattel’s third counter-claim to the extent predicated upon Contreras’ conduct.

3. Jorge Castilla

Jorge Castilla (“Castilla”) was Mattel’s Planning Specialist for Operations, Plan

*967

ning & Finance, a position he ascended to over his seven years at the company. FAAC ¶¶ 68-69. Castilla worked on sales forecasting and inventory management.

Id.

¶ 70. He helped develop the Electronic Data Warehouse, “a proprietary database containing highly confidential business information, such as sales, future/pending orders, product availability and sales forecasts at the stock keeping unit level.”

Id.

Mattel alleges Castilla “created [by two days before his resignation] a folder on his Mattel network share[d] drive that he labeled ‘To Take.’ ”

Id.

¶ 74. This “To Take” folder allegedly included “documents [to] describe the function, method and manner of operation of Mattel’s inventory management and forecasting processes, as well as a highly confidential document prepared by Mattel’s senior executives that laid out Mattel’s future international business strategies and marketing.”

Id.

Castilla transferred the files to a personal email address and deleted the folder from his shared drive before leaving Mattel.

Id.

¶ 75. Mattel discovered the activity through computer forensics and contacted the Federal Bureau of Investigation (FBI), which dispatched agents to visit Castilla at his home and retrieve a digital storage device that Castilla used to store the files.

Id.

¶ 76;

see also

Proctor Dec., Ex. 281. All of this happened before Castilla’s first day of work at MGA.

Mattel alleges that seven categories of trade secrets misappropriated by Castilla encompassed his knowledge about Mattel’s proprietary processes. Such information may be considered a trade secret because “to afford protection to the employer, the information need not be in writing but may be in the employees’ memory.”

Greenly v. Cooper,

77 Cal.App.3d 382, 392 , 143 Cal.Rptr. 514 (1978);

see also Klamath-Orleans Lumber, Inc. v. Miller,

87 Cal.App.3d 458, 465 , 151 Cal.Rptr. 118 (1978) (“[W]here, in order to do business the employer is forced to impart such select information to certain key employees, the information hardly becomes part of the employees’ knowledge which they may freely use at some later time. Rather, it remains the exclusive property of the employer which must be appropriately protected.”). The departing employee must “expend their own resources in uncovering the information” learned during their prior employment, instead of riding their prior employer’s “coattails.”

Id.

at 465 n. 3, 151 Cal.Rptr. 118 .

To prevent employers from using trade secret law as a weapon against employee mobility, California requires that “a party seeking to protect trade secrets [ ] ‘describe the subject matter of the trade secret with sufficient particularity to separate it from matters of general knowledge in the trade or of special knowledge of those persons who are skilled in the trade, and to permit defendant to ascertain at least the boundaries within which the secret lies.’ ”

Whyte v. Schlage Lock Co.,

101 Cal.App.4th 1443, 1453 , 125 Cal. Rptr .2d 277 (2002) (quoting

Diodes, Inc. v. Franzen,

260 Cal.App.2d 244, 253 , 67 Cal. Rptr. 19 (1968)). Though a plaintiff need not “spell out the details of the trade secret,” it must minimally provide “reasonable notice of the issues which must be met at the time of trial and [] provide reasonable guidance in ascertaining the scope of appropriate discovery.”

Id.

at 252-53 , 67 Cal.Rptr. 19 . For example, a vague claim that a former employee misappropriated “business models and implementations” is insufficient to describe a trade secret with particularity.

See, e.g., Farhang v. Indian Institute of Tech., Kharagpur,

2010 WL 2228936 , at *14 (N.D.Cal. June 1, 2010). “A plaintiff must do more than just identify a kind of technology and then invite the court to hunt through the details in search of items

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meeting the statutory definition [of a trade secret].”

Imax Corp. v. Cinema Technologies, Inc.,

152 F.3d 1161, 1163-64 (9th Cir.1998). Mattel’s vague and self-congratulatory descriptions of the first seven categories of trade secret information allegedly misappropriated by Castilla force the Court into exactly this sort of “hunt.”

Mattel claims that Castilla made away with the information in his head about Mattel’s forecasting process, which “ensure[s] the right product is in the right place at the right time, to ensure that inventory costs and supply and days of supply are kept at appropriate levels, and to ensure the right amounts of products are made to fill demand.”

See

Declaration of Laura Owens in Support of Mattel’s MSJ ¶¶ 5-39. Though Mattel concedes that its forecasting process has undergone tremendous evolution over the last several decades, it does not identify the specific systems misappropriated by Castilla. Mattel instead claims that Castilla misappropriated information about a process that consists of measuring the market viability of a particular product through customer focus groups, communicating that information to the company’s marketing and pricing teams, and attempting to produce the optimal number of goods.

Id.

¶¶ 7-15. This vague description of the process does not provide the Court with

any

basis on which to conclude that the information obtains value from secrecy or was the subject of reasonable efforts to maintain its secrecy.

See id.

¶ 10 (“Mattel’s forecasting process begins with planning and development of the product line.”). As described, the concept of projecting sales through market research and communication within the company is general, intuitive, and without dispute derives no independent economic value from its secrecy.

Cf. Metro Traffic Control, Inc. v. Shadow Traffic Network,

22 Cal.App.4th 853, 862 , 27 Cal.Rptr.2d 573 (1994) (“[A] stable of trained and talented at-will employees does not constitute an employer’s trade secret.”).

The second category of trade secrets allegedly misappropriated by Castilla is even more nebulous. Mattel identifies this category as its “demand planning process,” which entails, to use Mattel’s words, “a series of inputs and outputs.” Owens Dec. ¶ 18;

see also

Declaration of Pablo Vargas at 65 (Proctor Dec., Ex. 1). Machado, Trueba, and Vargas corresponded with Kuemmerle in the weeks leading up to their meeting with Larian and Park in Mexico City.

Id.

Machado and Vargas prepared a power point presentation to show Larian, Park and Kuemmerle at the meeting in Mexico City. Machado Depo. at 1033. The presentation borrowed images and language from a report prepared for Mattel Mexico’s president by another Mattel executive.

Compare

Isais Dec., Ex. 34

with

Isais Dec., Ex. 33. The report was located on a shared Mattel Mexico server to which Machado had access on his work computer; Machado burned the report to a personal compact disc and/or copied the report to a personal thumb drive. Machado Depo. at 1033-1037. The presentation prepared for MGA by Machado and Vargas also incorporated data about the Mexican market prepared by outside vendors with whom Mattel had subscriptions.

See

Isais Dec., Ex. 33. Machado and Vargas failed to omit the vendors’ names, which were located on the bottom left of several of the presentation’s slides.

Id.

Larian watched the presentation and then interviewed the three Mattel Servicios employees at the March 2004 meeting in Mexico City.

On March 19, 2004, Larian sent an email to an email address jointly used by Machado, Vargas, and Trueba with the name plot 04@yahoo.com.mx.

See

Proctor Dec., Ex. 22. Larian’s email directed the three individuals to see offer letters for employment (dated March 18, 2004) attached to the email.

Id.

All three Mattel Servicios employees were offered employment with MGA Mexico at a salary of 8,910 U.S.

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Dollars per month.

Id.

Both Machado and Vargas were offered positions as Directors of Marketing and Trueba was offered a position as Director of Marketing, Girls Division.

Id.

On April 16, 2004, an attorney representing Machado, Vargas, and Trueba sent an email attaching acceptance of employment letters executed by the three individuals.

See

Ex. 6436 to MGA MSJ.

Prior to leaving Mattel Servicios for MGA Mexico, Machado, Trueba, and Vargas copied some files from the company’s shared servers to personal storage devices. Deposition of Mariana Trueba, dated May 20, 2010, at 230 (stating that she thought the files she downloaded from shared servers would “at some point be useful”);

see also

Vargas Dec. at 7. Machado collected the storage devices after Trueba and Vargas downloaded and copied files, downloaded the files from the storage devices to his computer, deleted the files from the storage devices, and returned the storage devices to Trueba and Vargas so that they could download more files from the shared servers to which they had access. Machado Depo. at 218-219. Trueba separately emailed Machado files that she received from other Mattel Servicios employees in the weeks leading up to her resignation.

See, e.g.,

Webster Dec., Ex. 287.

All three employees formally resigned from Mattel Servicios on April 19, 2004.

See

Proctor Dec., Exs. 8-10. The next day Machado emailed Larian from the “plot04” email address stating that “we resigned yesterday and let me tell you ‘Rome is on fire’. We left the office at 1:30 PM yesterday and since then they have already made 10 changes in the staff, we are driving them crazy!!!,” (Proctor Dec., Ex. 11), to which Larian responded “I am in Ny. What is your cell?”

Id.

On April 23, 2004, Mattel Servicios sent all three employees a post-termination letter in which they would acknowledge receiving a salary from Mattel Servicios and, in relevant part, acknowledge that they “undertook not to [ ] reveal, exploit, reproduce or publish or otherwise disclose confidential information of which I became aware during my work in service of [Mattel Servicios].”

See

Proctor Dec., Ex. 141. None of the three employees signed and returned the letter to Matttel Servicios.

Id.

(a) Choice of Law

Machado and MGA argue that Mexican law governs Mattel and Mattel Mexico’s counter-claim for trade secret misappropriation to the extent it arises out of the conduct of Machado, Vargas, and Trueba. Mattel and Mattel Mexico disagree. In cases such as this one, where the Court exercises supplemental jurisdiction over state law claims, the choice of law rules of the forum state apply to those state claims.

Paracor Fin., Inc. v. Gen. Elec. Capital Corp.,

96 F.3d 1151 , 1164 (9th Cir.1996). The Court accordingly considers California’s choice of law framework in determining whether the laws of Mexico or California apply.

California applies a three part “governmental interest” test to choice of law disputes:

First, the court examines the substantive law of each jurisdiction to determine whether the laws differ as applied to the relevant transaction. Second, if the laws do differ, the court must determine whether a “true conflict” exists in that each of the relevant jurisdictions has an interest in having its law applied. If only one jurisdiction has a legitimate interest in the application of its rule of decision, there is a “false conflict” and the law of the interested jurisdiction is applied. On the other hand, if more than one jurisdiction has a legitimate interest, the court must move to the third stage of the analysis, which focuses on the “comparative impairment” of the

*976

interested jurisdictions. At this stage, the court seeks to identity and apply the law of the state whose interest would be the more impaired if its law were not applied.

Abogados v. AT & T, Inc.,

223 F.3d 932, 934 (9th Cir.2000) (citations and internal quotation marks omitted).

“If distinct claims for relief implicate different alignments of interests among the relevant jurisdictions, separate applications of the governmental interest analysis are required.”

McGhee v. Arabian American Oil Co.,

871 F.2d 1412, 1422 (9th Cir.1989). It follows, naturally, that “[u]nder both California and New York conflicts rules, a different determination properly is made for each defendant and each claim.”

Lombard v. Economic Development Admin, of Puerto Rico,

1995 WL 447651 , at *4 (S.D.N.Y. July 27, 1995);

see also

Ex. 6908 to MGA MSJ. Brisbois resigned from Mattel Canada on September 26, 2005 and was immediately escorted from the premises.

See

Deposition of Steve Totzke at 231:10-232:18. She retained a thumb drive containing files relating to Mattel Canada’s business, as well as Brisbois’ line of work for Mattel Canada.

See

Brisbois Depo. at 225:11 to 226:5. When deposed in connection with this lawsuit, she testified that at least some (if not most) of the files on the thumb drive were “work that I was involved with, that you know, that I was proud of, that I put effort into, and I was simply keeping a copy for [] my own personal file of work done.”

Id.

at 242.

Mattel identifies twenty one categories of trade secrets that Brisbois and MGA allegedly misappropriated. Mattel’s alleged trade secrets include a power point presentation evaluating- advertising for

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Mattel’s doll brands during the 2004 and 2005 calendar years, (Compendium of Trade Secrets, Ex. 3), market analysis that compares Mattel products’ market share with shelf space at various retailers,

(id.,

Ex. 4), a chart that visually depicts Mattel’s shelf space at one Toys ’R Us store and compares pricing for Mattel’s products against pricing for MGA’s products at that store,

(id.,

Ex. 5), a comparison of sales in 2005 with projected sales in 2006,

(id.,

Ex. 6), a chart that identifies sales, receipts, margins, and profits with regard to Mattel’s relationship with Wal-Mart in 2003 and 2004,

(id.,

Ex. 7), a promotional spread sheet for 2005 and 2006 that includes a number of blank or invalid fields,

(id.,

Ex. 8), a September 22, 2005 interoffice memorandum from Janine Brisbois and Mattel Canada colleague to members of Mattel Canada’s “Girl’s [sic] Business Unit” discussing price reductions for various Mattel products,

(id.,

Ex. 11), a March 28, 2003 Canadian Leadership Plan for Mattel’s Girls Division that focuses on market threats like Bratz and purports to identify pricing and marketing strategies to improve Mattel sales in the second half of 2003,

(id.,

Ex. 14), a standardized Mattel form that retailers must complete before “marking down” the retail price of a particular Mattel product (the form contains proposed mark down prices),

(id.,

Ex. 20), spread sheets containing data about Mattel’s 2003 performance and contemplated performance for 2004 on a retailer-by-retailer basis,

(id.,

Exs. 23-25, 57), a “handbill” spread sheet that lists the retail prices for Mattel’s products sold at WalMart stores,

(id.,

Ex. 30), business plans that discuss Mattel’s management of its retailer accounts and, for example, concludes that “all things being equal, a consumer will purchase an item connected to a charity over an item that is not,”

(id.,

Exs. 42, 60), a spread sheet that tracks Mattel’s product sales at Wal-Mart by month and product category

(e.g.,

Girls products),

(id.,

Ex. 58), an internal project management form completed by Brisbois that tracked her team’s success in achieving particular goals,

(id.,

Ex. 58), a Mattel Canada sales team organization chart attached to an email from Brisbois to her MGA Canada supervisor that identifies the size of Mattel Canada’s business and discusses the size of an average team meeting at Mattel,

(id.,

Ex. 63), and a Mattel Canada organization chart attached to an email from Brisbois to her MGA Canada supervisor and in response to an email from the supervisor asking Brisbois to “sketch that org chart ... I want to take it to Ohio with me on Wednesday to show Ron,”

(id.,

Ex. 64).

Finally, Mattel alleges that Brisbois disclosed Mattel’s mechanism to distribute its products to retailers throughout Canada. After Brisbois joined MGA Canada, the company received an email from a retailer seeking to purchase MGA Canada’s product.

(Id.,

Ex. 66). In an email concerning the retailer’s request, Brisbois’ supervisor asked her to identify a distributor who “would be the best to direct the toy store below to.”

Id.

The email to Brisbois also stated “Janine, I know that Mattel does a much better job at covering the small retailers. What are your thoughts?”

Id.

Brisbois responded that Mattel

invested some money into a B2B site which generates a good amount of the independent business. They also set up the customer service folks who manage the Key accounts as contacts for the independent! ] [retailers] and create monthly specials that get posted on the site. Finally, there is one NAM that manages all of this along with some of the smaller accounts.

Id.

Both parties discuss the documents and information with some generality and with few citations to evidence whose

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credibility is not at issue.

There is a genuine issue of material fact as to whether the documents and information allegedly misappropriated by Brisbois derived independent economic value from not being generally known. The majority of documents allegedly misappropriated by Brisbois shared Mattel Canada’s actual and projected pricing schemes, calibrated to retailers’ space constraints and tailored to maximize profits, categories of information commonly understood to hold value within an industry.

Cf. Morlife, Inc. v. Perry,

56 Cal.App.4th 1514, 1521 , 66 Cal.Rptr.2d 731 (1997). Brisbois herself acknowledged the great amount of time involved in crafting the pricing schemes used to maximize the profit realized by Mattel Canada’s products for particular retailers.

See, e.g.,

Brisbois Depo. at 524-525;

see Morlife,

56 Cal.App.4th at 1521-1522 , 66 Cal.Rptr.2d 731 (“As a general principle, the more difficult information is to obtain, and the more time and resources expended by an employer in gathering it, the more likely a court will find such information constitutes a trade secret.”). On the other hand, at least some of the pricing information contained in the spread sheets prepared by Brisbois may have been well known throughout the industry, including among Mattel Canada’s competitors.

Another category of documents allegedly misappropriated by Brisbois described Mattel Canada’s marketing schemes, including scheduled promotions for Mattel Canada’s products. MGA appears to argue that marketing plans are not trade secrets as a matter of law because the marketing strategies were inevitably revealed to the public. However, a reasonable fact-finder could conclude that a particular marketing strategy not generally known to the public gave Mattel Canada a competitive advantage over other retailers who, for example, may not have known of the relative profitability of a marketing campaign that tied product sales to charitable efforts.

See Ruckelshaus v. Monsanto Co.,

467 U.S. 986 , 1011 n. 15, 104 S.Ct. 2862 , 81 L.Ed.2d 815 (1984) (“[T]he value of a trade secret lies in the competitive advantage it gives its owner over competitors.”). For instance, Brisbois testified at deposition that she retained one of the promotional plans presented to Wal-Mart because “[t]his document represents a lot of my work and effort.” Brisbois Depo. at 527. Her “work and effort” wasn’t just expended planning the promotion, in which case MGA could plausibly argue that the document was no longer a trade secret at the time Brisbois left Mattel Canada. Instead, as Mattel’s witness points out, the promotional documents included “Mattel’s confidential analysis of and recommendations for continuing [one promotional] program and confidential POS, shipping, sell-thru and promotional information for specific products.” Totzke Dec. ¶ 30. It is for a fact-finder to determine whether the promotional materials had continuing value to Mattel Canada at the time Brisbois left for MGA.

A third category of documents and information allegedly misappropriated by Brisbois concerned Mattel Canada’s

internal

processes, including its organizational structure, its progress reviews, and its distribution network. The economic value derived from the secrecy of Mattel Canada’s organizational structure appears to be limited, since Mattel Canada was a public company at the time of Brisbois’ departure and its corporate structure was probably well known. However, Mattel has cited evidence to suggest that (1) its Canadian

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subsidiary’s organizational structure wasn’t well known; (2) MGA placed a premium on determining Mattel Canada’s organizational structure; and (3) a properly structured organization had the potential to help MGA become profitable. For example, Brisbois’ email disclosing Mattel Canada’s organizational structure to her supervisor at MGA stated “[t]his should help out with understanding the type of structure we are up against. This structure supports a business worth about $250MM in CDN in shipments.” Compendium of Trade Secrets, Ex. 63. Brisbois also stated, in a separate email to her supervisor at MGA, that “[i]f you do some quick math on a volume per total head count basis, you may fall off your chair!”

Id.,

Ex. 64. Brisbois further disclosed not just Mattel Canada’s organizational structure, but also the manner in which Mattel Canada allocated its human resources towards particular projects:

The Girls business alone which includes Barbie, Polly, Pixel Chix, etc ... is about $75MM. There are a total of 14 cross functional people that compose the Girls Team plus the third party partners from Ryan Partnership (Mktg & Promotions), and Mosaic (in store execution). A typical team meeting would have 15-20 people in attendance. The WM Team includes 9 cross functional people plus the same third party partners mentioned above. A typical team meeting would have 10 people in attendance supporting a business that peaked out at $95MM CDN in shipments.

Id.,

Ex. 63.

A reasonable fact-finder could likewise conclude that information about Mattel’s retailer network derived value from not being generally known. The email exchange preceding Brisbois’ disclosure of that information reveals its potential value — when MGA Canada was approached by a retailer interested in purchasing its products, the company found itself caught badly off guard. When asked about Mattel Canada’s solution to the same problem, Brisbois revealed her former employer’s approach in some detail and with specific reference to the retailers serviced by Mattel Canada’s network.

There is also a genuine issue of material fact as to whether Mattel took reasonable efforts to maintain the secrecy of documents and information allegedly misappropriated by Brisbois. MGA argues that Mattel Canada did not uniformly and consistently enforce a policy requiring its employees to mark documents as “confidential.” Mattel’s witness testified at deposition that Mattel only directed, but did not require, that proprietary information be marked “confidential.”

See

Deposition of Keith Storie, Vol. I, dated December 16, 2009, at 63-64. He also, however, testified that Mattel reminded its employees of their obligation to maintain documents’ confidentiality through periodic presentations and circulars.

See id.

at 64-65. MGA also points to the testimony of a Mattel witness who admitted that some of Mattel’s retailers, including Wal-Mart, were “reluctant to sign” nondisclosure agreements.

See

Deposition of Steve Totzke, Vol. I, dated January 18, 2010, at 94-95. But that testimony concerned the nondisclosure of information about products before their release, while the documents allegedly misappropriated by Brisbois included information (including pricing and marketing schemes and expenditures) that may not have been shared with Mattel Canada’s retailers in the first place. Finally, MGA argues that Mattel did not require its employees to encrypt emails that attached trade secret information.

See

Storie Depo. at 59-60. However, MGA provides no evidence about the “reasonableness” of widespread email encryption; there is no evidence in

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the record that any of the corporations at issue in this lawsuit used email encryption, a process that would appear to undermine the very purpose of email communication.

There is a genuine issue of material fact as to whether MGA acquired the documents and information allegedly misappropriated by Brisbois with the knowledge that the acquisition was improper. MGA instructed Brisbois to “not retain and [] not bring to MGA[] any of your former employers’ or Current employer’s property or confidential and proprietary information, including customer-related information.”

See

Ex. 6909 to MGA MSJ. On the other hand, Brisbois’ supervisor twice asked Brisbois to share information about Mattel in the months after Brisbois started working for MGA.

See, e.g.,

Compendium of Trade Secrets, Exs. 64, 65.

There is a genuine issue of material fact as to whether MGA used the documents and information allegedly misappropriated by Brisbois. Two Mattel witnesses testified that they lacked knowledge of any specific example of Brisbois disclosing Mattel Canada’s information and documents to MGA.

See

Storie Depo. at 204; Totzke Depo. at 611. However, the email from Brisbois’ supervisor requesting more information about Mattel Canada’s organizational structure foreshadowed the use of such materials in a meeting with Ron Brawer.

See

Compendium of Trade Secrets, Ex. 64. And Brisbois admitted to using some of the documents on the thumb drive in connection with her employment at MGA. Brisbois Depo. at 241.

Finally, there are genuine issues of material fact as to whether MGA benefitted and/or Mattel suffered any injury as a result of the alleged misappropriation of documents and information by Brisbois. Mattel’s witness was incapable of specifically identifying any injury suffered by the company as a result of Brisbois’ alleged misappropriation, though the question posed to the witness was outside the scope of the topics on which he was designated.

See

Storie Depo. at 200-201. However, another Mattel witness testified that he “observed what was happening with Toys ’R Us and saw [MGA] move into [ ] some TV campaigns before the Barbie TV campaign” about which Brisbois gained knowledge while at Mattel. Totzke Depo. at 405. He testified further that “it certainly was an aggressive late move to tactically mute or block what was a very big initiative for Barbie internally.”

Id.

Neither MGA nor Mattel has cited to any evidence in the record about the extent to which Brisbois was involved in MGA’s preemptive TV campaign and/or whether the impetus for the campaign was wrongfully acquired information about Mattel’s own promotional strategy. The fact-finder can resolve these disputes on the basis of more specific testimony and an expanded factual record.

C. Disposition as to Third Counter-Claim

For the foregoing reasons, summary judgment is granted in favor of MGA as to those trade secrets abandoned by Mattel, as well as the Castilla and Contreras allegations discussed herein. MGA’s request for the application of Mexican law to MGAE and Larian is denied. Mattel, MGA, and Machado’s requests for summary judgment are otherwise denied.

IV. Mattel’s Other State Law Counter-Claims

Mattel also brings counter-claims for breach of fiduciary duty against Bryant and Machado, aiding and abetting breach of fiduciary duty against MGAE and Larian, breach of duty of loyalty against Bryant and Machado, aiding and abetting breach of duty of loyalty against MGAE and Larian, breach of contract against

*985

Bryant and Machado, intentional interference with contractual relations against MGA, conversion against MGA and Machado, and unfair competition against Bryant and MGA. Before proceeding to examine the arguments as to these counter-claims, the Court sets forth certain foundational principles about the supersessive scope of the California Uniform Trade Secret Act and the preemptive scope of the Copyright Act, since both issues are relevant to the vitality of the state law counter-claims.

A. Supersession by the Uniform Trade Secrets Act

California’s Uniform Trade Secrets Act “occupies the field” of common law claims based on the misappropriation of a trade secret.

K.C. Multimedia, Inc. v. Bank of America Tech. & Operations, Inc.,

171 Cal.App.4th 939, 954 , 90 Cal.Rptr.3d 247 (2009). However, the Act does not supersede “(1) contractual remedies, whether or not based upon misappropriation of a trade secret, [and] (2) other civil remedies that are not based upon misappropriation of a trade secret.” Cal. Civ.Code § 3426.7(b). The Act’s language “implicitly preempts alternative civil remedies based on trade secret misappropriation.”

K.C. Multimedia,

171 Cal.App.4th at 954 , 90 Cal.Rptr.3d 247 (citation omitted). A claim cannot simply depend on a “different theory of liability” to survive the UTSA’s supersessive effect.

See id.

at 957-959 & n. 7, 90 Cal.Rptr.3d 247 (distinguishing rule set forth in

Powell Prods., Inc. v. Marks,

948 F.Supp. 1469, 1474 (D.Colo.1996) (allowing a claim based on trade secret misappropriation to survive if the claim “requires an [element] [ ] which is not an element of a misappropriation claim”)). The claim must be based on more than “the same nucleus of facts as the misappropriation of trade secrets claim for relief.”

K.C. Multimedia,

171 Cal.App.4th at 958 , 90 Cal.Rptr.3d 247 (quoting

Digital Envoy, Inc. v. Google, Inc.,

370 F.Supp.2d 1025, 1035 (N.D.Cal.2005)).

Before applying these principles to each of Mattel’s counter-claims, the Court must resolve whether California’s UTSA supersedes claims based upon the misappropriation of information that does not meet the statutory definition of a trade secret. Mattel argues that California UTSA’s savings clause, Cal. Civ.Code § 3426.7(b), expressly excepts from the statute’s supersessive ambit those claims

not

based upon misappropriation of a trade secret, including claims based upon the misappropriation of information that does not qualify as a trade secret. MGA responds that Mattel’s approach eviscerates the statute’s purpose to “sweep away the adopting states’ bewildering web of rules and rationales and replace it with a uniform set of principles for determining when one is — and is not — liable for acquiring, disclosing, or using ‘information ... of value.’ ”

Silvaco,

184 Cal.App.4th at 239 n. 22, 109 Cal.Rptr.3d 27 . The Supreme Court of California has not addressed this issue. Decisions of the California Court of Appeal do not bind this Court, though they may be instructive to applying the law as the California Supreme Court would if presented with these facts.

Wyler Summit P’ship v. Turner Broad. Sys., Inc.,

135 F.3d 658 , 663 (9th Cir.1998);

Guebara v. Allstate Ins. Co.,

237 F.3d 987, 993 (9th Cir.2001).

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Courts in other states have reached divergent answers to the question of whether the UTSA supersedes common law claims based upon the misappropriation of information that does not meet the statutory definition of a trade secret. These decisions, though not binding, are instructive in interpreting the UTSA.

K.C. Multimedia.,

171 Cal.App.4th at 955 , 90 Cal.Rptr.3d 247 . Two state supreme court cases capture the arguments made by courts on either side of this issue.

Burbank Grease Servs., LLC v. Sokolowski,

294 Wis.2d 274 , 717 N.W.2d 781, 788-94 (2006), the court endorsed the argument that Mattel makes here. Interpreting a savings clause that materially differs from the one found in California’s UTSA, the court concluded that the UTSA’s unambiguous language “leaves available all other remaining civil remedies for the protection of confidential information,” rendering the statute’s purpose irrelevant.

Id.

at 788-90.

Mortgage Specialists, Inc. v. Davey,

a dispute between a mortgage brokerage and its former brokers, the court held that New Hampshire’s UTSA superseded state common law claims based upon the misappropriation of information, “regardless of whether that information meets the statutory definition of a trade secret.” 153 N.H. 764 , 904 A.2d 652, 666-668 (2006). The court acknowledged that the UTSA only superseded remedies for a “misappropriation of a trade secret” and thus could be read to leave alone remedies based on the misappropriation of other information. However, the court rejected this construction as ignorant of both “the overall legislative scheme” to make uniform the remedies available as a result of the theft of confidential information and the “purpose of making uniform the law among States that have adopted the UTSA.”

Id.

at 664.

The approach taken by

Davey

is better aligned with the decisions reached by the two recent California Court of Appeal cases to discuss UTSA’s supersessive effect.

K.C. Multimedia ,

for instance, held that UTSA supersedes any claim “based on the same nucleus of facts as the misappropriation of trade secrets claim,” even though the superseded claim may seek “something more.” 171 Cal.App.4th at 958 , 90 Cal.Rptr.3d 247 . The court rejected

Powell Prods., Inc. v. Marks,

in which the court stated that UTSA doesn’t supersede a conspiracy claim based on the theft of trade secrets because such a claim “requires an agreement [] which is not an element of a misappropriation claim under the UTSA.” 948 F.Supp. 1469, 1474 (D.Colo.1996). It’s no longer the case in California that a claim for breach of fiduciary or breach of duty of loyalty based upon the misappropriation of trade secrets would survive even though both claims require proof of “additional elements” like a relationship of trust or confidence.

See K.C. Multimedia,

171 Cal.App.4th at 960 , 90 Cal.Rptr.3d 247 . Allowing civil plaintiffs to nevertheless proceed with such claims on the basis of the theft of confidential information that doesn’t meet the statutory definition of a trade secret undermines the California Court of Appeal by “alternatively plead[ing] claims with less burdensome requirements of proof.”

Diamond Power Int’l, Inc. v. Davidson,

540 F.Supp.2d 1322, 1345 (N.D.Ga.2007). Along these lines, a recent California Court of Appeal opinion “emphatically rejected the [] suggestion that the uniform act was not intended to preempt ‘common law conversion claims based on the taking of information that, though not a trade secret, was nonetheless of value to the claimant.’ ”

Silvaco,

184 Cal.App.4th at 239 n. 22, 109 Cal.Rptr.3d 27 .

Like both

K.C. Multimedia

and

Silvaco,

and unlike

Sokolowski, Davey

eschewed a pure application of the statute

*987

for an approach that adhered to “the history, purpose, and interpretation of the statutory scheme.”

Compare Davey,

904 A.2d at 664 ,

K.C. Multimedia,

171 Cal.App.4th at 957 , 90 Cal.Rptr.3d 247 ,

and Silvaco,

184 Cal.App.4th at 239 n. 22, 109 Cal.Rptr.3d 27 ,

with Sokolowski,

717 N.W.2d at 791 . In an effort to align with the California courts that have addressed this issue, the Court concludes that UTSA supersedes claims based on the misappropriation of confidential information, whether or not that information meets the statutory definition of a trade secret.

B. Copyright Act Preemption

The Copyright Act preempts “all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright.” 17 U.S.C. § 301 (a). “The rights protected under the Copyright Act include the rights of reproduction, preparation of derivative works, distribution and display.”

Altera Corp. v. Clear Logic, Inc.,

424 F.3d 1079, 1089 (9th Cir.2005) (citing 17 U.S.C. § 106 ). The Copyright Act’s preemptive ambit does not extend to state law claims that include an “ ‘extra element’ that makes the right asserted qualitatively different from those protected under the Copyright Act.”

Id.

(citing

Summit Mach. Tool Mfg. v. Victor CNC Sys.,

7 F.3d 1434, 1439-40 (9th Cir.1993)).

For instance, the Copyright Act doesn’t preempt Mattel’s claim for misappropr

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