What a Bratz

Apparently, dolls can fight dirty.

Designer Carter Bryant came up with the original concept idea for a new line of urban, hip, and flirty dolls sometime in the late 1990s. In 2001, MGA Entertainment picked up the line, christened them "Bratz," and launched a marketing phenomenon.

Anyone with young girls at home knows the rest of that story.

But there was a bit of a legal problem. During the time Bryant came up with the designs, he was under contract with Mattel - the owner of the uber-successful Barbie doll franchise.

Anyone with even a cursory knowledge of intellectual property and contract rights can guess the rest of this story.

A few weeks ago, a California court ruled in Mattel's favor.

So what happens now? From a branding perspective, it is what has already happened that is significant for Mattel. But more on that in a moment. Understanding the legal ramifications of the court's decision will provide some needed context.

For that, I contacted Adam Soffer - an IP law specialist at local boutique Soffer Charbonnet.

Typically, he said, the court has two options. First, the court could issue an injunction, essentially stopping sales of the infringing product. That could happen, but it's tough. Pulling offending product off the shelves involves a higher burden of proof than the second option: Awarding monetary damages. Of course, the court could do both. That is yet to be seen.

On its surface, the "money" option appears the easiest path, until you start to think about how you come up with a number. The court has to determine past damage - in other words, what profits would Mattel have earned had Bratz not been on the market - plus profits the line earned above and beyond aforedetermined cannibalized profits. Needless to say, that gets complicated. Expert witnesses will need to determine the extent to which Bratz sales impacted Barbie sales. What is the total market size? What were the two lines' respective market share? What do the trendlines look like? Very complicated.

Finally, (unless an agreement has been reached to this effect) the court must also determine future damages. In other words, what will Bratz earn into the future that Mattel - as part-owner of the IP - has a right to. Probably some percentage of earnings. Even more complicated.

And just when I thought I had a handle on this one, Adam brought up the inherent problem with "simple" IP. Intellectual property such as computers, cell phones, or heart monitors are what is called "complex" IP. In other words, you can't just "look at it" and make a reasonable argument that come up with that unique idea out of thin air. But dolls are different. You could make the claim (and doubtless MGA tried) that Bryant simply "thought it up on his own." Had it not been for the contract employment issue, they likely could have won. Not that uncommon, Adam says.

A brief warning (Adam's words, not mine): IP, employment, and contract cases - like this one - are always complicated. This one is no different. It should go without saying that if you find yourself or your company in any sort of similar situation, don't try this at home. Seek professional legal advice.

But as I mentioned earlier, whatever the court determines, the marketing damage already has been done.

To find out why, we need to ask ourselves a couple of important questions.

First, what made Bratz so successful? And second, how was this new product able to outflank the 50-year veteran Barbie so easily?

A quick comparison between the two dolls begins the discussion. Barbie is a classic. She has done it all and "been" it all. For many young girls of that generation, Barbie was the epitome of style and beauty. But "hip" and "modern"? No. That's where Bratz comes in. While many commentators used to lament that Barbie dolls were a bit - shall we say tactfully - out of proportion, Bratz dolls instead feature oversized heads, expressively painted eyes, and luscious lips. They are dressed in the latest urban streetwear. They are flirty, gritty, and shall we say, bratty.

Now, let's take a look now a the brand focal point - the emotional connection the audience has with the product. For girls (not collectors - they are a different animal), the emotional anchor to Barbie is, well, Barbie herself. Yes, she has "friends," but Barbie is the singular star of the show. Bratz dolls, by contrast, have no single focal point. That means a young girl can find the doll she most identifies with and still remain "in the club" of Bratz fans among her peers.

And did we mention "identification"? This is the most damning criticism of the Barbie franchise. While many attempts have been made to "multi-culturalize" Barbie dolls, for all intents and purposes, the popular image of Barbie comes in one color: White. Caucasian. I have news for Mattel. The latest estimates put non-Hispanic Caucasians at a minority of the U.S. population by 2042. By contrast, Bratz launched as an ethnically diverse mix of girls - a much better reflection of her target market and much better positioned into the future. In simple terms, that means a girl can find a doll who looks like her. That's a pretty powerful emotional hook, and a key to the success of the Bratz line.

All of that rationale comes down to this: Whether their moms approve of exposed navel rings or not, girls like Bratz dolls. Better than they like Barbie dolls. To the tune of half a billion dollars per year for Bratz and a 21 percent decline for Barbie in 2007.

It is pretty clear: Mattel got caught sleeping. And that's not too surprising; with a 50-year undisputed queen of dolls in the product line, why would you listen to an upstart designer with a gritty, multi-ethnic, urban concept?

But as it happens so often in the marketplace, the sleeping giant was caught off guard. In less than a decade, Barbie has been made largely irrelevant - old, stodgy, and completely repositioned out of the top spot.

It seems like Barbie has finally started to look her age.