Barbie and Bratz – The Story Continues

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MGA Entertainers Inc. and Mattel Inc, the creators of the Barbie and Bratz dolls are set to restart their court battle which occurred initially back in 2004, when MGA first brought out their new Bratz dolls. Since the introduction of the Bratz dolls in 2001, MGA managed to sell $3.3 billion dolls and related products, and made $292 million in profits. With the introduction of the rival dolls, Mattel has suffered a loss of nearly $400 million in profits from their Barbie dolls.

Background

The original case was started because Mattel Inc. the maker of the Barbie dolls accused MGA of stealing their intellectual property in the Bratz dolls concept. According to Mattel the Bratz dolls were created by Mattel’s staff member Bryant. Therefore, Mattel claimed that MGA had used Bryant’s work, whom they had hired away from Mattel and had come up with the sketches for the Bratz dolls while still working for Mattel. Mattel accused MGA Entertainment of a conspiracy with Bryant to steal the idea for the Bratz dolls while he was still working for them.

MGA opposing the verdict

In 2008 Mattel had been awarded $100 million from the legal battle by a judge in South California, and the trademark for the Bratz dolls was transferred over to Mattel. However, in this new case MGA is moving to oppose the verdict of the last jury, claiming that Mattel had hidden evidence in the previous case. Bryant claimed that he came up with the idea when on an eight- month hiatus from Mattel, which were then shown to MGA Entertainment. The attorney fighting for MGA claimed that it was only when Mattel’s profits suffered due to the competition, did they move to crush the opposition.

Two sides to every story

She states “There are really two sides to every story, after the Bratz dolls became an international hit, and after Mattel’s attempts to imitate them with its massive creative genius flopped, Mattel ruthlessly used its power to keep retailers from carrying Bratz.” However, the Mattel attorney Quinn declared, “We will prove to you that Bratz was created in Mattel’s design center, using the same people assembled to create Mattel’s toys, including Barbies. We will prove that Bratz was created by Mattel, secretly stolen by MGA, and MGA took Mattel’s design and with it took Mattel’s sales.”

And this is the crucial point of this court battle namely whether the Bratz doll was indeed created in the course of employment – since, this is the exception to the general principle that all rights in a created work initially vest in the creator. When the work is created in course of employment, the rights in the work, such as design rights or copyrights, are owned by the employer.  It remains to be seen how the court will assess the new arguments alleged by both parties.

With millions of pounds having been spent in legal costs by both Mattel and MGA in this battle, there is a lot to lose. However, according to toy- industry watchers, the Bratz line is no longer as successful as it used to be. Sean McGowan, a toy- industry analyst states that if Mattel win “they get a shoddy brand that is a shell of itself”  and MGA themselves have been crippled trying to fight off these accusations.

If this were a UK case, I would want to find out more about Bryant’s 8 months’ break in employment, and whether he was subject to any restrictive covenants. There may be lessons to learn there in terms of how to avoid intellectual property disputes.

For earlier posts see ‘Mattel Stops Bratz in the US’ and ‘Award disputed in Barbie Infringement Case