Barbie v. Bratz: How a Famous Feminist, a Judicial Hottie and Millions in Legal Fees are Producing our Era’s Most Interesting Case about the Ownership of Ideas

Mattel v. MGA Entertainment might be described as simple suit about the intellectual property rights to some children’s toy dolls.  But it is so much more than that.  The case has chewed through more than a hundred million dollars in legal fees, has generated two diametrically opposed trial verdicts, and still has no end in sight.  It is Barbie vs. Bratz — a generational war between a controversial cultural icon against the brash upstart of a younger generation — and it stars an A-list of legal characters fighting over nothing less than the ownership of ideas.

Barbie’s legal team includes one of the most famous and storied feminists of our generation, Susan Estrich, the author of Real Rape, who was once the youngest woman ever tenured on the Harvard Law School faculty, was the campaign manager for Michael Dukakis’ 1988 presidential campaign, and in 2001 was ranked #57 on Judge Richard Posner’s List of “100 Public Intellectuals of All Time.”  Is Estrich adding deep intellectual gravitas to a trial about intellectual property, the ownership of ideas, and competing cultural symbols?  Not exactly.

In article entitled “Mattel, MGA Sling Mud After $88M Bratz Verdict” – an article which might fairly be described as not entirely flattering to either side of case – we find that in a post-trial press conference Estrich publicly accused the CEO of MGA Entertainment (maker of the Bratz dolls) of intimidating lawyers and witnesses, perjuring himself, and encouraging witnesses to lie.  And that’s just for starters.  Estrich also complained that the CEO “called female members of her team ‘sluts,’ and told them they needed to be half-naked.” Estrich also got into some sort of post-trial confrontation with the Bratz CEO’s teenage son(!), with the son charging that Mattel’s lawyers had harassed him and Estrich rejoining that “[y]our dad has threatened me.”

It’s that kind of litigation.

If there’s some small degree of irony that Barbie’s company now has a leading feminist intellectual as part of a scorched-earth legal team, that irony is easily matched by the identity of the appellate judge who threw out the first jury verdict in this lengthy litigation.  Chief Judge Alex Kozinski is widely known as the one of the most flamboyant, controversial, and intellectual judges in the federal courts.  Not allergic to publicity, Kozinski once nominated himself for the “Judicial Hottie” contest run by the edgy, then-anonymous blog “Underneath Their Robes.”  His email nominating himself was later published in the New York Times, and Kozinski went on to win the blog’s contest as the “#1 male Superhottie of the Federal Judiciary.”   If there were a contest for the federal judge who most nearly embodies the brazen, multi-cultural style embodied in Bratz dolls, the libertarian, Romanian-born Kozinski would win going away.  And appropriately enough, last summer Kozinzki handed the Bratz a victory over Mattel’s Barbie in an opinion that matched legal reasoning with panache.

And in case anyone might worry that the sheer size of Mattel and the strength of its legal team might be in danger of overwhelming an upstart competitor, fear not!  True, in the previous appeal, Mattel & Barbie were represented by Dan Collins, a star advocate, big firm law partner, and ex-law clerk to Justice Scalia.  But MGA & Bratz were represented by Josh Rosenkranz, a star advocate, big firm law partner, and … also ex-law clerk to Justice Scalia!  Each firm had not one but two huge litigation firms on its side (Mattel with Quinn Emanuel and Munger, Tolles and Olson; MGA with Skadden, Arps and Orrick, Herrington).  It’s top guns vs. top guns all around, with fame, fortune and legal fees sloshing about.

Yet beneath all of the glamour, there are serious issues about competition and the ownership of ideas.  The case started with an idea – the idea to create a hip new line of dolls, the Bratz, that would be far more provocative than the perky but relatively conventional Barbie.  That idea was originally conceived by Carter Bryant, and here’s the difficulty:  The idea was conceived when he was still a Mattel employee, and worse still, it was obviously an idea for competing against Barbie!

The entirety of what is now years of hotly contested litigation revolves around a simple question:  Did Carter Bryant own the idea because he thought it up?  Or did Mattel own it because Bryant was working for the company and had agreed to assign his intellectual property rights to Mattel?  If you think there’s an easy answer to the ownership issue, think again.

Let’s take Bryant’s side of the case first.  Sure, he was working for Mattel, but he worked in the “Barbie Collectibles” department and his job was to design fashionable clothes and hair styles for high-end Barbies.  Bryant might have reasonably thought that, when he wasn’t working for Mattel, as during evenings and weekends, he was on his own and free to come up with his own ideas.  Perhaps, the tedium of working within the constraints of the Barbie style sparked a rebellious urge to create something wildly different—to create a style so anti-Barbie that the long-limbed blonde would be horrified if she could see it.  From Bryant’s perspective, the Bratz idea might be viewed as the polar opposite of what Mattel was paying him to do during working hours, and thus completely outside the scope of his employment.

But now consider Mattel’s perspective.  Employers have strong interests to have their employees assign all their ideas over to the employer, for otherwise, employees can always say that the idea came to them sometime when they were off duty.  Moreover, the employer’s interest is especially strong where the idea is in the very field in which the employee is being paid to work.  It would be one thing if Bryant had come up with a new idea for a better mousetrap during his off hours.  But Bryant’s idea was about dolls, and Mattel was paying him to develop ideas for dolls.

In theory, ownership issues such as this might be resolved by contract, but the language in Bryant’s contract merely provided the battlefield on which the two sides would wage their litigation wars.  The contract assigned to Mattel rights in Bryant’s “inventions” developed “at any time during my employment by [Mattel].” Mattel read the relevant time frame broadly to cover any time during which Bryant remained under contract with Mattel (including non-working hours); Bryant read it narrowly as referring to any time during working hours.  There was also a dispute about the meaning of the term “inventions,” which the contract defined broadly, but the parties disputed whether, even under the broad definition, the term was sufficient to cover even mere ideas.

Beyond such technicalities of the contractual language lie fundamental issues concerning the relationship between competition and the ownership of ideas.  If intellectual property assignments in employment contracts are construed too broadly, then the next generation of competing products might be thwarted because of the uncertainty caused by broad, uncertain and potentially overlapping claims to ownership.  On the other hand, even new start-ups—indeed, one might think especially new start-ups—may need strong assignments of rights so that they can hire employees to develop risky new product lines without fear that the employees will use their employment as a springboard to develop their own products.

At the first trial, the judge construed the contract in Mattel’s favor, and that lead to disastrous results for MGA and the Bratz:  the jury awarded Mattel $100 million dollars.  What’s more, the trial judge awarded Mattel the entire line of business associated with the Bratz.  If that result stood, Barbie’s company would literally have owned the Bratz.

Chief Judge Kozinski overturned Mattel’s victory last July.  Kozinski found the contractual language ambiguous and thus held that the trial judge erred in granting Mattel a judgment as a matter of law.  The case, he ruled, would have to go back for a new trial.

Last week that new trial ended with a stunning reversal of fortune for MGA and the Bratz.  Not only did Mattel lose on almost all of its claims (it won a measly $10,000 on one claim), it also lost on MGA’s counterclaims that Mattel had stolen some of its trade secrets.  MGA wound up with an $88.4 million verdict against Mattel.  Of course, there’s sure to be an appeal.

*              *             *

In the first appeal in this litigation, Judge Kozinski ended his opinion with the memorable line that “America thrives on competition; Barbie, the all-American girl, will too.”  Perhaps.  But America also seems to thrive on litigation.  At its best, the legal system can provide a rational avenue for mediating between seemingly reasonable and yet irreconcilable viewpoints.  At its worst, the system devolves into a shouting match.  As the Barbie v. Bratz saga continues, interested observers of the case can only hope that the millions spent on legal talent, and the tremendous intellectual energy of the legal stars in this drama, can keep the litigation in the former category.

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John F. Duffy is the Oswald Symister Colclough Research Professor of Law at the George Washington University Law School.

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1 Response

  1. Lawrence Cunningham says:

    Brilliant writing and analysis, John. Thanks for posting this here.

    Judge Kozinski is also (in)famous for wreaking havoc with the contract law applicable in this case, once claiming that under California law no written contract can ever be so clear on its face to prevent having a trial of the sort he ordered in this case. See Trident Center v. Connecticut Gen. Life Ins. Co., 847 F.2d 564 (9th Cir. 1988).

    Suppose this contract said it covered inventions developed “at any time during my employment by [Mattel], whether morning, noon or night.” Judge Kozinski might think that could exclude inventions developed in the evening and hold a trial on the matter.

    Despite Kozinski, California law bars evidence of such contestable meanings unless the language is “reasonably susceptible” to competing interpretations. See Susan J. Martin, “Yes, Judge Kozinski, There Is A Parol Evidence Rule in California – The Lessons of a Pyrrhic Victory,” vol. 25 Southwestern U. Law Review (1995).

    It’s a shame that who owns and ideas and millions of dollars can depend on what federal judge you get and how that judge construes state law.