A few years ago, Bratz dolls dismayed parents whose little girls were captivated by the toys’ exaggerated hips and lips. The Bratz girls, though, packed legal smarts into their makeup-slathered plastic heads. Last week, Jade, Sasha and friends won a court victory that’s good for the free-market economy.
Bratz debuted in 2001, sending the “who’s-raising-our-children” punditry into spasms over turning preteens into tartlets. Bratz’s success sent Mattel into hysterics, too. Mattel, maker of Barbie, was a bigger company than Bratz’s maker, MGA — but Bratz cut into Barbie’s sales.
Mattel pouted for a while and then launched a court battle. In 2004, Mattel accused a former Barbie clothing designer, Carter Bryant, of stealing the idea for Bratz. The toy giant claimed Bryant came up with the Bratz concept while working for Mattel, but then brought the idea to MGA.
In 2008, a federal jury agreed. The judge directed MGA to hand custody of the dolls to Mattel. In 2010, an appeals court reversed the verdict. Another jury convened this winter. Last week, this jury decided that Bratz belonged to MGA.
The doll fight shows that intellectual-property disputes are not child’s play. Mattel claimed ownership because Bryant had signed an “inventions agreement” that governed anything he created — even at home — while on the Mattel payroll.
The two sides disagreed on everything, from the validity of the agreement to whether the deal covered doll design or doll clothing design to whether Bryant had found his inspiration while he was out of work, in between stints at Mattel.
Theft in such cases isn’t clear cut. If a chemist for a shampoo company takes a crate of chemicals home, that’s theft. If she toils away for eight hours and comes up with nothing, but then claims that she came up with a brilliant idea while taking a shower, that’s harder to prove. Execution of an idea matters, too.
Companies from toymakers to investment banks try to lock up “their” ideas with agreements such as the one Mattel made with Bryant. But they cannot easily monitor and control people’s thoughts — and strict agreements can drive away prospective workers who envision future careers as entrepreneurs.
Moreover, “inventions agreements” and non-compete clauses can be worthless in the hands of a good attorney who argues, for example, that a businessman isn’t competing against his former employer, because he has invented his own niche.
Meanwhile, jurors are Americans who nurture a soft spot for the corporate drone who wants to escape the cubicle. Judges, too, often respect a corporate alumnus’ right to make a living in the only field he knows.
The Mattel ruling will be a headache for big companies. But it’s good for the economy, because it creates a natural check on size.
Size has its merits. Big companies wield pricing power over advertisers and vendors. But size can be a burden, too. It layers bureaucracy between executives and creators, making companies vulnerable to nimbler competitors.
Companies don’t generate ideas; people do. Google, for example, lets workers devote some “work” time to pursuing their own work-related interests. But it risks nurturing bright employees who then decide that they’d rather strike off on their own. This danger is partly why big companies often buy ideas by purchasing start-ups.
Competition, not courts, should have decided the Mattel/Bratz dispute. Mattel should have determined long ago to treat Bratz as the girl whom it couldn’t pin down — and then moved on to another pretty face.
Unlike the Winklevoss twins, whose dispute with Mark Zuckerberg over Facebook’s creation was immortalized in “Social Network,” Mattel hasn’t been exposed so nakedly as a sore loser.
Nicole Gelinas is contributing editor to the Manhattan Institute’s City Journal and author of After The Fall, just released in paperback.