Copyright infringement, corporate espionage and violations of employment contracts are not exactly what usually come to mind when you think about fashion dolls. I have been following the case of Mattel (the marketer of the Barbie brand) and MGA Entertainment (the marketer of the Bratz fashion dolls) for quite some time now, even citing the case study in detail in The Entrepreneur Equation.
This case has had more twists and turns than a season of Desperate Housewives, but there are some incredibly valuable takeaways when it comes to small business.
It’s been a long and complicated road, but here are some highlights:
So, besides the fact that dolls are probably a lot more interesting than you previously imagined, what can you learn from this situation?
Developing products when employed by another firm is tricky territory: If you are employed by a business and have an idea you may want to commercialize, get legal help to try to reach a deal before you go down the path. And if you have employees, be very clear in your policies about your expectations of products or services developed while they are employed.
If you are successful, someone will want a piece of it: Mattel didn’t come after the Bratz until they were commercially successful (not to mention taking substantial market share from Mattel’s Barbie franchise). If you succeed, others will be watching and may try to grab a piece, whether through lawsuits, poaching clients, luring away star employees or knock-offing your idea. Be prepared for this!
Stay focused on what you do: Instead of focusing on their core brands, Mattel devoted significant resources to a line that they initially weren’t interested in. I imagine they would have served themselves and their shareholders better to devote those resources towards their own brands and customers.
The value of compromise: The real winner at the end of the day here may be the lawyers, with the amount of money in legal fees that were spent. Sometimes, the risk and reward of litigation doesn’t pay off.
I am sure we will hear more in the months to come on this situation, which is not yet over. What additional takeaways did you learn thus far from this fashion doll battle royal?