In a hotly-contested copyright infringement case, a federal judge last week handed the rights to the Bratz dolls franchise to Mattell Inc., the creator of rival Barbie. The widely-popular Bratz line, which debuted in 2001, is slated for recall and possible destruction in February unless the Bratz's owner, MGA Entertainment, wins an appeal or gains a compromise with Mattell.
The ruling came several months after a federal jury found that the creator of the Bratz doll came up with the design while working for Mattel under an exclusivity contract, and surreptitiously took the concept to MGA.
The success of Bratz has come partly because some see the fashion doll as a hipper, sassier and urban answer to Barbie. They're often described as "fashionistas." Known for hip-hugging outfits and bare midriffs, they have also drawn controversy for being too sexualized for girls.
Mattell can either discontinue the Bratz line, market the dolls itself or reach an agreement that would allow MGA to continue producing the dolls under a license from Mattel.
The Wall Street Journal notes that while Mattel-made Bratz dolls could prove lucrative for the company, they carry the risk of cannibalizing Barbie sales and even undermining Barbie's "good girl" image. Still, the newspaper notes that Mattel already shares shelf space with products it licenses from other companies, including Walt Disney Co. And while Bratz sales have been declining recently, the dolls will produce an estimated $300 million in revenue this year.
A joint venture between Mattel and MGA is "probably unlikely" because of bad blood between the two companies, including the hiring by Mattell of private investigators to spy on top-level executives at MGA during the dispute, according to the Journal.
However, Sean McGowan, an analyst at Needham & Co., told the Los Angeles Times that its time for the two sides to talk or the Bratz brand will quickly be worthless. Stores will likely quickly stop buying Bratz rather than deal with a February recall.
"It's still a valuable brand, it's still very profitable," he said.
As for the bad blood between the two companies, Mr. McGowan said, "Get over it."
Discussion Question: What should Mattell do with the Bratz brand?