On 27 August 2008, Mattel Inc., the creator of Barbie was awarded $100 million dollars (approximately £54.4 million) in a case for copyright infringement against MGA Entertainment Limited, maker of the popular Bratz Dolls.
Mattel argued that it owned rights to the drawings and models on which the Bratz dolls were based on the basis that Cartner Bryant, the creator of Bratz was employed by Mattel during the time that the dolls were designed. Mr Bryant sold the designs to MGA a month before leaving his employment at Mattel in 2000, and MGA began marketing the dolls in 2001.
Mr Bryant was employed by Mattel between 1995 and 2000 as a designer of fashions, hairstyles and make-up for the Barbie and Ken ranges of dolls, although he took leave of absence from his employment for several months in 1998. He had signed an employment contract with Mattel containing confidentiality and exclusivity provisions. The provisions of that contract meant that Mattel would have exclusive rights to any "developments, designs, know how, data" and other items Mr Bryant created during his employment, including the intellectual property in the designs for the Bratz dolls.
The court held that all but four of the early sketches of the Bratz dolls belonged to Mattel. Although he settled the claims made against him by Mattel shortly before the trial for an undisclosed sum, Mr Bryant admitted to using components of the Barbie and Ken dolls to mock up and photograph the Bratz prototypes.
Mattel argued that MGA and its CEO, Isaac Larian knew about Mr Bryant's contract when they committed to developing the Bratz line. However, MGA argued that Mr Bryant had leave of absence from his employment for several months in 1998 and it was during this time that the Bratz idea was conceived. The court found that Isaac Larian and MGA had interfered with Mr Bryant's contractual duties in purchasing the designs and had breached Mattel's copyright in reproducing them.
The jury was asked to decide when awarding damages whether MGA should be held responsible for the profits from the first four Bratz dolls, which came from Mr Bryant's original drawings, or profits from all subsequent dolls and related products.
MGA argued that it had built upon the original prototypes created by Mr Bryant, adding to the designs, branding and packaging to make them more marketable. In the past seven years over 40 characters and related products such as DVDs and accessories have been added to the range.
The jury held that the copyright infringement was not wilful and awarded $100 million compensation to Mattel in respect of the original dolls, falling far short of the $2 billion plus award for the Bratz profits and interest that the company had requested from the jury.
Although MGA's Isaac Larian has publicly declared the award as "a strong message that [the jury] want these companies to compete in the marketplace and not in the courtroom", the case highlights the potential dangers faced by companies who bring a product into the market without taking steps to ensure that the product's designer is not using confidential information belonging to a previous employer in the designer's new role. This is particularly true in the current economic climate, where companies are even more willing to take court action to protect their intellectual property and their profits.