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Carl Kanowsky: Barbie vs. Bratz — the billion-dollar battle

It's The Law

Posted: November 4, 2010 9:34 p.m.
Updated: November 5, 2010 4:55 a.m.
 

As anyone with preteen daughters knows, Barbie, the iconic California doll who ruled the toy empire for years, has been vigorously challenged by Bratz, the line of saucy, spunky dolls, “The Girls With A Passion For Fashion!” 

Bratz, led by Jade, Sasha and Cloe, ignited a war not unlike that between Bill Gates of Microsoft and Steve Jobs of Apple. The conflict has spread from the shelves at Toys “R” Us to the federal courts, with Mattel claiming that Bratz cost them $1 billion in sales. (I bet you had no idea that mere toys were such big business.)

Mattel’s claim against Bratz is not that Bratz is major competition (which it obviously is), but that MGA Entertainment (the makers of the Bratz line) stole the concept and idea from Mattel. 

You see, the person who dreamed up Bratz is Carter Bryant, who before making his fortune with Bratz, was a fashion and hair style designer for, you guessed it, Mattel. 

While still working for Mattel, Bryant went to MGA with sketches and a fairly simple model of a Bratz-style doll (constructed of a head from Mattel’s inventory, a Barbie body and Ken’s boots).  Less than three months later, Bryant had left Mattel and was working for MGA.

Mattel sued MGA, asserting that since Bryant designed the Bratz dolls while still working for Mattel, Mattel owned the concept and right to exploit the idea. 

Basic law holds that generally if an employee creates something for his employer, the employer owns that development, not the employee. 

To bolster this, Mattel had Bryant agree in writing that he would communicate to Mattel all of his inventions as well as assign to Mattel “all right, title and interest” in such inventions.

Inventions were defined as including things such as discoveries, improvements, designs, developments, etc. 

Seems pretty comprehensive, doesn’t it?  The trial court judge thought so and ruled, before the case was tried before a jury, that the term “inventions” included Bryant’s ideas, such as Bratz.

Mattel and MGA then proceeded to fight out the rest of the battle in district court, with Mattel claiming that it should own the entire Bratz concept and with MGA, predictably, saying MGA should own it. 

The case went to the jury which agreed that Barbie (that is, Mattel) had been harmed that Jade (that is, MGA) owed her $10 million (a lot of money, but a far cry from the billion that Mattel was demanding). 

The judge ordered MGA to immediately stop making Bratz dolls, a devastating result for MGA.

MGA appealed, asking the Court of Appeals to set the Bratz free. Interestingly, the Court of Appeals agreed.

The appellate-court decision hinged on several factors, but one of the main ones was that the term “inventions” does not necessarily include “ideas.” 

The justices said that designs and processes are “concrete,” while ideas are “ephemeral and often reflect bursts of inspiration that exist only in the mind.” 

The Court of Appeals also ruled that the trial-court judge should have let the jury decide whether “inventions” include “ideas” rather than taking that decision from them. 

The jury, according to the appellate court, should have heard that contracts that other Mattel employees signed clearly stated that inventions did include ideas, whereas Bryant’s was silent on that topic.

Now because of the lack of one word, the case goes back to the trial judge and is likely to go through the whole process again. 

Mattel, which thought it had finally triumphed in the decade-long war, must continue the fight while MGA gets to begin marketing Bratz anew. What has already cost millions in attorneys fees will cost millions more with no certain outcomes.

The morals of the story to employers: 1. make sure that all of your internal documents are consistent with each other; 2. make sure your employees know that you welcome their ideas and inventions and that they will be well-rewarded for sharing with you.  Maybe if Mattel had that type of policy, Carter Bryant would have gone to his employer and not to the competition.

Carl Kanowsky of Kanowsky & Associates is an attorney in the Santa Clarita Valley. He may be reached by e-mail at cjk@kanowskylaw.com.  Mr. Kanowsky’s column represents his own views, and not necessarily those of The Signal. It’s The Law appears Fridays and rotates between members of the Santa Clarita Valley Bar Association. www.SCVbar.org.  Nothing contained herein shall be or is intended to be construed as providing legal advice.

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