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Barbie Infringement Case

Award Disputed in Barbie Infringement Case

August 28, 2008

In a strange turn of events, Mattel (makers of Barbie) and MGA (makers of Bratz) are disputing how much a jury awarded Mattel. The sum could be either $40 million or $100 million but the decision is ambiguous. MGA has argued that the $100 million sum is duplicative and that Mattel has only been awarded $40 million. Their spokesperson also stated that MGA will appeal any award. MGA press release here.

The presiding judge in the case will be releasing the final decision later this week which will include the true amount of damages and may include an injunction forcing MGA to pay Mattel continuing royalties or to stop the production of Bratz dolls altogether.

This case centres on the question of ownership of copyright when employees have created works outside of their employment. Back in 2000, Carter Bryant was still an employee of Mattel when he designed the Bratz dolls. He then licensed the rights to MGA a month before he left Mattel. MGA has said that they were not aware that Bryant had continued to work for Mattel during a two week period where he was working for both. Bryant had worked for Mattel between 1995 to April 1998 and then again between January 1999 to September 2000. MGA argued that Bryant developed Bratz during the break in Mattel employment.

The jury unanimously found that Mr. Carter had breached his contract and found for Mattel. Even if the award stands at £100 million it is significantly short of the $2 billion which had been requested by Mattel.

Bratz has become the main competitor of Barbie since their 2001 release. According to the BBC this fall in market share has continued in recent months: “Barbie’s worldwide gross sales fell 6% between April and June 2008 as the company’s net profit fell 48% to $11.8m.”

Mattel’s estimated legal bill for this dispute is reported to be at $200 million. Following the news shares in Mattel had dropped 3% partly due to speculation that Mattel would win the full $2 billion.

This case highlights the importance of understanding an employee’s rights and responsibilities to their employers when inventing or creating any private works. It also shows the importance of careful research when licensing or purchasing an Intellectual Property Right.

For press coverage click here, here or here.