Introduction

Unless you've somehow been on a remote island for the last several decades, you're likely familiar with Barbie and Bratz dolls, two top-rated children's toys. Barbie is a Mattel brand that first appeared in 1959. Since then, it has become the most famous doll in the world by sales volume. But there was a time where Barbie felt threatened by the competition and nearly ended up with complete ownership of their rival's brand. Here's the fascinating case of Mattel v. MGA Entertainment.

Discussion

Carter Bryant, an employee for Mattel, had an idea for a line of dolls. At the time, he was building Barbie Collectables. Barbie Collectables, unlike typical Barbie products in retail stores, were more like investments than toys. Individuals would add these items to their collections, rather than giving them as children's presents. In this department, Bryant spent his time designing fashions and hairstyles for high-end Barbie products.

Instead of going to Mattel with his ideas for a line of dolls, Bryant met with a couple of MGA Entertainment employees. After the initial pitch, Bryant had a meeting with Isaac Larian, CEO of MGA Entertainment. During this meeting, Bryant discussed his ideas for what would eventually become Bratz dolls. He even brought preliminary sketches and a dummy with thrown-away Mattel Barbie parts. Many of the drawings eventually became popular first-generation Bratz dolls.

So, as you would expect after a successful product pitch, Bryant had a lot of work to do. He became a consultant for MGA on the same day he put in his two weeks' notice at Mattel. For several weeks Bryant worked with both companies, developing Bratz while also creating Barbie products. On the day that Bryant put in his two-week notice, Mattel executives were unaware of Bryant's involvement with MGA. But once Mattel became aware of Bryant's participation in the project, it led to several significant lawsuits.

There were several reasons why Mattel felt a reason to sue MGA Entertainment.

First, Bryant signed an employment agreement in 1999 that assigned his inventions to Mattel. His "inventions" could include discoveries, designs, improvements, even if they're unpatentable.

Second, Bryant's initial sketches involved two doll designs for Bratz and Jade. Mattel argued that since Bryant came up with these ideas during his tenure, he should have disclosed and assigned those works to Mattel. Instead, he went to MGA, who had no rightful ownership rights for Bryant's creative output and sold the ideas. Thus, Mattel believed that MGA was benefitting from stolen work.

Finally, as Bryant took sketches and sculpts to MGA during his pitches with employees and the CEO, Bratz dolls were infringing on Mattel's property. 

Conclusion

The case between Mattel and MGA Entertainment began in district court, where a jury awarded Mattel $10 million in damages. Yet, that was only about 1% of the damages Mattel sought. But then, things got interesting.

After providing an award, the court also transferred Bratz's complete trademark portfolio to Mattel and prevented MGA from marketing or producing Bratz in the future.

However, the court of appeals had a very different outlook on the jury's findings. Instead of favoring Mattel like the previous court, the court of appeals reversed several decisions, which we'll discuss in Mattel v. MGA Entertainment part two.

Source: https://www.govinfo.gov/content/pkg/USCOURTS-ca9-09-55812/pdf/USCOURTS-ca9-09-55812-1.pdf 

Disclaimer: The views and opinions expressed throughout this blog are the views and opinions of the individual author(s) and/or contributor(s) and do not necessarily reflect the views and opinions of our firm, CIONCA IP Law. P.C.