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Markham Concepts, Inc. v. Hasbro, Inc.

United States District Court, D. Rhode Island

January 25, 2019

MARKHAM CONCEPTS, INC.; SUSAN GARRETSON; and LORRAINE MARKHAM, individually and in her capacity as trustee of the Bill and Lorraine Markham Exemption Trust and the Lorraine Markham Family Trust, Plaintiffs,
v.
HASBRO, INC.; REUBEN KLAMER; DAWN LINKLETTER GRIFFIN; SHARON LINKLETTER; MICHAEL LINKLETTER; LAURA LINKLETTER RICH; DENNIS LINKLETTER; THOMAS FEIMAN, in his capacity as co-trustee of the Irvin S. and Ida Mae Atkins Family Trust; ROBERT MILLER, in his capacity as co-trustee of the Irvin S. and Ida Mae Atkins Family Trust; and MAX CANDIOTTY, in his capacity as co-trustee of the Irvin S. and Ida Mae Atkins Family Trust, Defendants.

          FINDINGS OF FACT AND CONCLUSIONS OF LAW

          WILLIAM E. SMITH CHIEF JUDGE.

         To people of a certain age, who grew up in the America of the 1960s and 70s - where television meant three channels and shows like Bonanza, Star Trek, and The Art Linkletter Show (more on that to come); where cars were made in America, period; and where phones were connected to wires, not cell towers - the Game of Life was a gangbuster hit found (it seemed) in every household in the country, alongside Twister, Clue, and Monopoly. In the Game of Life, the winner retires to “Millionaire Acres.” In this suit, life imitates art as the heirs of toy developer Bill Markham have sued over what they see as proceeds from the exploitation of the Game that they have been wrongfully denied.

         The Game of Life was inspired by the first board game invented by Milton Bradley himself, in 1860, called the Checkered Game of Life. It sold millions of copies after hitting the market in 1960, and continues to sell to this day. Based on the idea that “life's a game that can be played well, or badly, ” historian Jill Lepore writes in The New Yorker, “[o]nly a handful of games have had as long a shelf life.” Jill Lepore, The Meaning of Life, The New Yorker, May 21, 2007, at 38, 39. This case, filed in 2015, has had a shelf life of its own. But after two amendments to the complaint and considerable motion practice, the parties tried to the Court (in Los Angeles[1] and Rhode Island) Plaintiffs' third claim for relief, which asks for a declaratory judgment that Markham's heirs control the Game's intellectual property. Specifically, Plaintiffs ask the Court to find that they have termination rights under section 304 of the Copyright Act of 1976.

         With these, Plaintiffs would be able to acquire the copyrights to the Game that were long ago transferred to Defendant Hasbro, Inc., 's predecessor-in-interest, the Milton Bradley Company. Plaintiffs lose this turn, however: the facts found below show that the physical creation of the Game's prototype was done by Markham's erstwhile employees - Grace Chambers and Leonard Israel - as well as Markham's wife, Sue, and unnamed parties hired by Markham to furnish finishing touches. They also show that this work was done at the instance and expense of Defendant and toy developer Reuben Klamer.

         I. Findings of Fact

         The series of events leading to the Game[2] hitting the market in 1960 began a year earlier. See, e.g., Exs. JTX 9, JTX 11, JTX 12. In 1959, a Reuben Klamer traveled from his home in Beverly Hills, California, to Milton Bradley's headquarters in Springfield, Massachusetts. Ex. JTX 9; Nov. 16, 2017, Trial Tr. (“Trial Tr. I”) 23-26. Klamer was a toy developer with myriad contacts in the industry, and had come to pitch Milton Bradley executives a concept for a new toy. See Trial Tr. I 18-26.

         Milton Bradley passed on the pitch. Id. at 25. But the company's president at the time, Jim Shay, asked Klamer to develop a product idea to commemorate Milton Bradley's 1960 centennial. Id. at 23; Ex. JTX 9. Intrigued, Klamer agreed to do so and went searching for inspiration in Milton Bradley's archive, where he stumbled upon an old copy of the Checkered Game of Life, see Ex. JTX 9, Trial Tr. I 23, which had been invented by the company's namesake just before the Civil War to “forcibly impress upon the minds of youth the great moral principles of virtue and vice, ” Lepore, supra, at 41. The concept Klamer developed on the trip back home to California was to update the Checkered Game of Life to reflect post-World War II American society and values.[3] See Trial Tr. I 25-27; Exs. JTX 10., PTX 20, PTX 275.

         But Klamer was mostly an ideas man - he needed help refining his concept and, importantly, translating it into a prototype he could actually sell to Milton Bradley. See Trial Tr. I 28-31, 64; Ex. JTX 10. For this he reached out to one of his toy-industry contacts, Bill Markham. Trial Tr. I 28-33. An experienced advertiser, Markham was head of a firm set to that purpose named California Product Development (“CPD”). See JTX 2; Trial Tr. I 112; Nov. 17, 2017, Trial Tr. (“Trial Tr. II”) 64. CPD employed two artists at the time, Grace Chambers and Leonard Israel, who were very good in Klamer's estimation, and whose presence at CPD convinced Klamer to hire Markham's firm over others he considered. Trial Tr. I 28-31. Chambers had received her training from the Art Center College of Design in Los Angeles, Trial Tr. II 60; Israel his from the Chicago Art Institute, Trial Tr. I 100.

         Markham agreed to take on the project in the summer of 1959. See Trial Tr. I 29-33. With little time to waste - Milton Bradley wanted the product ready for market by January 1, 1960, see id. at 55 - Markham and his team went to work, see id. at 34-35. As to who did what during the approximately six weeks it took to produce the prototype, the Court credits especially the testimony of Chambers and Israel, which the Court heard live in Los Angeles.[4]See generally Trial Tr. II 58-111 (Chambers); Trial Tr. I 99-136 (Israel). Neither has received a cent in royalties from the Game, nor have they any financial interest in the outcome of this suit. See Trial Tr. I 108-09; Trial Tr. II 58, 80. The testimony each gave was largely consistent with that of the other. See generally Trial Tr. II 58-111; Trial Tr. I 99-136. Both, moreover, had only good things to say about their time working for Markham at CPD and with Klamer on the project. See Trial Tr. I 101; Trial Tr. II 65- 66.

         They testified that labor was divided: Klamer and Markham combined to provide the big ideas, many ahead of their time. See Trial Tr. I 34, 103, 107-08, 127; Trial Tr. II 67-71, 75; see also Ex. JTX 25. These included that the Game would be played on a circuitous path; the Game's board would contain three-dimensional elements; the Game's object would be to achieve various life milestones; and a spinner would dictate movement of the Game's players. See Trial Tr. I 107, 126-29; Trial Tr. II 68-71; Ex. JTX 25. Klamer also visited Markham's firm once or twice a week during development to give real-time edits to Chambers and Israel while they worked - the former on the game board, the latter on the box cover - to produce a physical instantiation of Klamer's and Markham's ideas. Trial Tr. I 103-04, 106-08, 129, 130-33; Trial Tr. II 71-78.

         Chambers and Israel both testified that they - not Markham or Klamer - were the ones at CPD who built the prototype. Trial Tr. I 103-04, 106-07, 130-33; Trial Tr. II 71-78. Asked who constructed the prototype's game board, Chambers said that she did “most of it.” Trial Tr. II 72. Israel went further, testifying that “once it was decided what we wanted to have on the board, [Chambers] was the one who put it all together and did the final art work on it.” Trial Tr. I 106. Chambers was the one who built the houses, the mountains, and the elevated track out of balsa wood, cardboard, and colored pantone paper. Trial Tr. II 99-103. Chambers also placed the printing on the track and constructed a cardboard spinner. See id. at 101, 132-33. Some of these objects, such as the spinner and the mountains, were later converted to the plastic replicas used for the prototype by an outside firm Markham hired for that purpose. See Trial Tr. I 121-22; Trial Tr. II 103- 04; Ex. JTX 13. An outside firm also bound the game board and printed the play money that was part of the prototype. See Trial Tr. II 106-07; Ex. JTX 13.

         The art for the prototype's box cover was Israel's handiwork, according to both his and Chambers's testimony. Trial Tr. I 103- 04, 110-11; Trial Tr. II 72, 74. Israel created several small-scale sketches as possibilities for the box cover, from which Markham and Klamer selected the one they preferred. Trial Tr. I 103. The favored design was then made by Chambers into a box cover of proper scale. Id. at 134. As with the board, Markham had “nothing to do” with the physical creation of the box cover. Id. at 107. Indeed, it was the testimony of both Israel and Chambers that Markham was often attending to other matters at CPD during the time the prototype was taking physical form. Id. at 116; Trial Tr. II 73-74.

         The third major component to the prototype besides the board and the box - the rules - were a collective, iterative effort. Trial Tr. I 105-06, 116-18; Trial Tr. II 76-77, 105. Once the Game was operational, everyone in and around the CPD offices at the time - Markham, Klamer, Chambers, and Israel - would play it, and then throw out suggested rule changes for the group to consider. Trial Tr. I 105-06, 118-19, 128; Trial Tr. II 76-77, 105. Some of these were tried and, because of some unforeseen disruptive effect on another rule, discarded. Trial Tr. I 105- 06. Some, however, were ultimately adopted, then copied by Sue Markham (Bill's wife, and a copywriter by profession) into the prototype's rule book. Trial Tr. I 105-06, 116-18, 128; Trial Tr. II 105.

         Once completed, Markham and Klamer presented the prototype to Milton Bradley executives, including its vice president, Mel Taft, on or around August 10, 1959, at the famous Chasen's restaurant in Hollywood, California. See Trial Tr. I 38-39, 65-68, 86; Exs. JTX 25, JTX 29. Also at Chasen's was radio and television personality Art Linkletter. See Trial Tr. I 33, 39; Exs. JTX 25, JTX 29. He was there on behalf of Link Research Corporation (“Link”), the firm Linkletter had founded with Klamer to develop consumer products that could be marketed using Linkletter's considerable celebrity. See Trial Tr. I 20, 33; Exs. JTX 29, JTX 34, JTX 39, JTX 42. Part of Klamer's pitch to Milton Bradley at the Chasen's meeting was that Linkletter could help promote the Game. See Trial Tr. I 38-39; Exs. JTX 11, JTX 12. The pitch worked: Taft and Shea were impressed by the prototype, and left the restaurant thinking that with some tweaks it could be a commercial success. See Exs. JTX 18, JTX 19, JTX 20, JTX 21, JTX 25, JTX 33; Trial Tr. I 40-41. Soon thereafter, on August 19, Klamer mailed the prototype to Milton Bradley. Ex. JTX 12; Trial Tr. I 96.

         Two agreements regarding rights to the Game followed. See Exs. JTX 1, JTX 2. The first, entered on September 21, 1959, was a License Agreement between Link and Milton Bradley. Ex. JTX 1. This agreement gave Milton Bradley the exclusive right to manufacture and market the Game, which Link “had . . . designed and constructed.” Id. The License Agreement also allowed Milton Bradley to use Linkletter's name and image in its advertising of the Game, and required Linkletter to plug the Game fifty-two times on his nationally televised show. Id. In return, Link received a six percent royalty on sales of the Game and an ...


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