JANUARY 23, 2018
GIVEN THE MASSIVE AMOUNT of Los Angeles legal resources thrown at the Mattel v. MGA Entertainment case, I, like much of the local legal community, followed the case with much interest. I knew several of the Orrick, Herrington & Sutcliffe attorneys who worked on the case and had heard their war stories firsthand. At the time, I worked at Blecher Collins, which advised on some of the anti-competition aspects of the case and learned about some of the strategy behind MGA’s counterclaims. I also wrote the successful demurrer for the related 2010 state court fraudulent transfer case brought by Mattel against MGA, Isaac Larian (the CEO of MGA), and several of his family members. So, when I picked up Orly Lobel’s You Don’t Own Me: How Mattel v. MGA Entertainment Exposed Barbie’s Dark Side, I was expecting a walk down memory lane with some juicy behind-the-scenes commentary. Unfortunately, the majority of the book is a disjointed and repetitive diatribe against Barbie with only a small section devoted to the case, and an even smaller portion devoted to MGA’s discovery and exposure of Mattel’s shady business practices, or what one might call “Barbie’s Dark Side.”
Lobel’s book reads like a trashy pulp fiction novel. Much of it explores Barbie’s European sex toy background and the artists who have rebirthed Barbie as a sexual fetish item, much to the chagrin of Mattel. Now don’t get me wrong — a lot of the social commentary regarding gender roles and this iconic “fashion” doll is fascinating on its own. But if you bought this book hoping to get an insider’s view of the Barbie v. Bratz legal wars, you will be disappointed. Much of the story told here has already been reported in the news, and most of the dirty secrets “revealed” in the book about Barbie and Mattel have nothing to do with the litigation against MGA. Rather, most of it involves cases arising years and years before Bratz even came on to the scene.
This is because Lobel discusses in depth Mattel’s “attempts to control its cultural queen’s image.” While the message comes across loud and clear that Mattel uses litigation to try to crush those that get in its way, it is not hard to sympathize with and understand why a company that focuses on marketing toys to young girls, mostly tweens, would take issue with the overt sexualizing and perversion of a doll by adults. Is it any surprise that Mattel took issue with Aqua’s tacky but catchy “Barbie Girl” song or Tom Forsythe’s Food Chain Barbie photograph series, which basically shows naked Barbie dolls being cooked or destroyed with various kitchen appliances?
However, what is notable is how unsuccessful Mattel was at protecting Barbie from these “attacks” under copyright and trademark law. For example, in the case against Aqua, Mattel tried to argue that the song tarnished and diluted the Barbie brand, but the courts found that the song was a parody and that the use of the name Barbie was protected under the fair use doctrine. A similar result occurred when Mattel took Forsythe to court. The courts found that the use of the copyrighted dolls was protected because of the artistic nature of the work. Forsythe’s photographs were a critical commentary on gender within society, thus, once again, a parody, and legal.
Yet, even with these disappointing legal decisions behind them, Mattel chose to engage in an all-out legal war, with armies of lawyers arrayed on both sides, against MGA. Barbie v. Bratz was a case that captured the attention of not just the legal community, but also designers, creators, and corporations throughout the country. It gave legal news writers so many tropes to play with: David v. Goliath, Creativity v. Corporate Control, and Innovation v. Old Ideas, to name a few. Unfortunately, after all these years, the case really just boils down to two wealthy entities willing to spend millions upon millions of dollars to win at all costs.
Barbie v. Bratz did not begin when Bratz first appeared on the shelves. In fact, Barbie sales had been on the decline for quite sometime. The lawsuit against MGA appeared at first to be another publicity stunt, similar to Barbie’s “divorce” from Ken in 2004, not long before the lawsuit was filed.
According to Lobel, however, what caused Mattel to eventually pull the trigger was an anonymous letter cryptically sent to its CEO stating: “I have information that I think Mattel should investigate.” The letter further revealed that Carter Bryant, a former employee of Mattel, had created Bratz. The next big piece of information to land in Mattel’s lap came from an entity that MGA was suing. This enemy of an enemy gave Mattel the contract that Bryant had signed with MGA while he was still employed by Mattel.
Although Lobel tries to paint Bryant as a victim throughout her book — a creative artist trapped, underpaid, and underappreciated at Mattel — it is hard to go along with the theory that Bryant was just an innocent pawn striving to create art in the form of a mass-produced plastic tween doll. Bryant, in fact, spent significant time preparing for a fight with Mattel — from trying to get his work copyrighted and notarized, to using code names to describe his Bratz dolls, to listing the CEO of MGA on the patent for Bratz.
And while MGA would later argue that the initial Bratz sketches were created while Bryant was staying with his family on a leave of absence from Mattel (and that his inspiration ranged from the high school students he saw in his hometown to the popular Steve Madden shoe and Paris Blues jean ads featuring disproportionate models from the late 1990s and not from sources within Mattel), this does not change the fact that Bryant pitched Bratz to MGA while he was working for Mattel, that he created the original mock-up (known as the “Franken-Bratz”) from random parts of discarded Barbie and Ken dolls he took from Mattel, that he recruited other Mattel employees to work behind the scenes on the Bratz dolls, and that when Bryant eventually left Mattel, he lied to Mattel saying that he was moving home and quitting the doll business, when he was actually just heading across town to continue his work for what would become Barbie’s main competitor.
When the book finally gets to the two trials at issue here, Lobel’s slant against Mattel is glaring. The examinations of key witnesses, such as Bryant, are described as “ugly,” even though multiple-day examinations are common in most high-stakes trials. And the judicial decisions, which were indeed more favorable to Mattel than MGA in the first trial but still legally sound, are criticized as preventing the jury from hearing the true story. While it is true that the decisions a judge makes with regard to what evidence can come in and what must stay out can have a major effect on the stories told by the defendant and the plaintiff, and thus on what the jury bases its decision on, the ruling, for example, to prevent MGA from introducing evidence of Mattel’s engagement in unrelated litigation is not so unusual or groundless to be considered biased or trial swaying.
During the course of the first trial, Mattel made a strategic decision to have the corporate representative for Mattel be a passionate young doll designer who, like Bryant, was trying to design dolls that were edgier and less polished than Barbie. Her involvement in the trial allowed Mattel to leave the jury with the impression that Bryant may have stolen the entire Bratz idea from his co-workers at Mattel, while putting forward a representative who seemed to be both hip and genuine. Similarly, MGA’s attorneys threw Bryant under the bus by arguing that even if he had stolen from Mattel, MGA was innocent and did not know about it. Furthermore, MGA had, in any case, departed far from Bryant’s original designs, so whether he had breached his contract with Mattel did not matter.
Yet, despite the spin that Mattel and MGA each gave to the dispute, both trials came down to a few simple questions: How much of Bryant’s work done outside of Mattel was covered by the contract he had signed with his employer? Did it cover the pet projects he pursued on the weekends? Did it cover designs that would be of no appeal to Mattel? Initially, one wants to say of course not. Why would Mattel own something that someone worked on in their free time? Under the law, however, one can contract away pretty much all their rights to creativity, invention, and art.
Here, Bryant had signed a contract stating that he was assigning to Mattel all the inventions he conceived during his employment with Mattel. Inventions were defined as: “[A]ll discoveries, improvements, processes, developments, designs, knowhow, data computer programs and formulae, whether patentable or unpatentable.” As Lobel repeatedly points out, the term “ideas” was not included within the definition. In the first trial, the jury found that the “idea” of the Bratz dolls was covered under the contract even though the specific words dolls, ideas, creations, et cetera, were not listed. The jury focused on the concept, shaped in part by the jury instructions provided to them, that the name, design, and entire Bratz line had been “invented” while Bryant was still working for Mattel. The result was that the Bratz line of dolls disappeared from the market under a worldwide injunction and Mattel was awarded $100 million in damages. This was when, as you might recall, the resale prices for Bratz dolls soared on Amazon and eBay.
While some companies might have taken their licks and moved on, MGA chose instead to appeal and the case went up to Judge Alex Kozinski on the Ninth Circuit. (Oddly, at this point in the book Lobel goes off on several long tangents about Judge Kozinski. While some of the stories are fascinating, some of them are utterly bizarre, such as accusations that Judge Kozinski had to recuse himself from a case because of a rumored bestiality porn collection. Even so, Lobel’s digression has proven prescient: Kozinski has recently resigned in the face of numerous allegations by staff and clerks of sexual harassment.) This ended up being a bad draw for Mattel, as Judge Kozinski had actually ruled against them in the prior Aqua song case. Here too, Judge Kozinski ruled against Mattel, overturning the verdict on the first trial, and sending the case back to trial on the very narrow issue of whether the language of the contract actually covered the creation of a new line of dolls. While a better-written, more inclusive contract would have covered Bratz, the contract Bryant signed was somewhat ambiguous and a second trial was needed for a more detailed and thoughtful analysis of the contract terms.
In the second trial, MGA, however, was not content to sit back and just be a defendant. Instead, it went on the attack against Mattel, bringing various new anti-competition counterclaims. MGA also hired a new lead attorney just before the trial started, in part because MGA had stopped paying its legal bills, but also because, if the judge from the first trial had been pro-Mattel, the judge from the second trial was pro-MGA. For example, the less charismatic Mattel CEO was ordered to be in trial every day for the second trial, versus the younger, more charming designer representative from the first trial. This proved damaging to Mattel, as the CEO could barely tell Bratz dolls apart from the newly released Mattel Monster High dolls, weakening Mattel’s arguments that Mattel was the innovator and Bryant the copycat.
And MGA took a different approach to Bryant. MGA’s new attorneys painted him as a victim in the second trial — as an artist who had been bullied and picked apart by Mattel. The really big change, however, between the first and second trial arose because MGA had learned of Mattel’s utilization of corporate spies and other inappropriate behavior to keep it in its dominant doll market position. For example, Mattel would have its employees pose as owners of fake small doll stores and then have them sneak into MGA’s closed product shows to learn about new lines, advertising, release dates, pricing, et cetera, in order to shape Mattel’s product launches and counter marketing. They even had a manual for their employees describing the best ways to set up fake businesses and get past MGA security at the large toy fairs.
Even though Mattel had stopped doing this before the trials began, the assertion that this was not authorized or known by the higher-ups fell flat for the jury and Mattel could not distance itself from this corporate espionage — especially when combined with evidence that Mattel had used its dominant position in the toy market to force retailers to drop Bratz from their stores.
This new tone, including how Bryant was used to craft MGA’s story (ignoring that he had already settled with Mattel and did not have a horse in this second race) allowed the David and Goliath story to appear plausible, and the end result was a jury verdict that swung decidedly against Mattel. This decision was arguably based more on emotion and feelings of justice, rather than necessarily on the law. Putting aside the broadness of the employment contract and the Franken-Bratz doll, the jury decided Mattel could not own the idea of Bratz. This time, Mattel had to pay MGA hundreds of million of dollars in damages and the Bratz dolls could go back in to production.
Of course, after spending roughly half a billion dollars in legal fees, Mattel appealed the verdict from the second trial. In this second appeal, once again before Judge Kozinski, MGA’s counterclaims were struck based on procedural grounds, thus significantly reducing the verdict awarded against Mattel. MGA, still unsatisfied refiled these same counterclaims in state court, and that case has yet to be set for trial.
As one might expect, this anti-climactic result of never-ending litigation does not make for a fulfilling conclusion to a book, which may explain why Lobel wrote about more than just the two trials and appeals. But Lobel’s strong overriding views regarding Barbie as a sexualized “ice queen” that deserves to be taken down bleeds throughout the entire book. It dilutes her argument that innovation and progress cannot thrive in a world where creatives are denied ownership of their own creations and ideas. Lobel repeatedly argues that the United States should look to other countries that require employee inventors to be compensated in some way by their employer for their inventions — systems that she believes “reward genius.” Unfortunately, this argument doesn’t fit well with the background of Barbie v. Bratz, where the creative was eventually destroyed by the legal war between his two former employers, competition was introduced into the market despite genius going unrewarded, and corporations learned that they need to write better contracts to gain clear ownership over the ideas of their employees.