Barbies vs. Bratz Dolls: Intangible Assets and IP ‘In Play’

Michael D. Moberly    June 3, 2008


Why is it important for companies to (proactively) unravel and monitor the origins, ownership, stability, defensibility and audit-ability of intangible assets and intellectual property?, well…

In Federal court in Riverside (CA) on Tuesday (June 2d) toymaker Mattel, owner of the Barbie empire, alleged that MGA Entertainment engaged in copyright infringement when they commercialized Bratz dolls.

This case represents one more costly (in your face) example why ‘this is the way we’ve always done it’ is no longer adequate when valuable IP and intangible assets are in play.  For companies with intensive – valuable intangible assets and IP portfolios, continuing to do things the way it’s always been done no longer serves the owner-holder of those assets particularly well, especially in light of the economic fact – business reality that 75+% of most companies’ value, sources of revenue and future wealth creation lie in intangible assets and IP.

Setting aside for a moment, (a.) the charges that have been filed in this case, (b.) the dissing which both sides have engaged, and (c.) how legal counsel have tried to characterize the circumstances in their clients’ favor, the case essentially boils down to a single procedural – due diligence question; did either side effectively unravel and consistently monitor the origins and development of the idea and drawings that gave rise to the Bratz dolls?

When hundreds of millions of dollars are at stake, as they are in this case, c-suite decisions are correctly guided by profits and experienced guesstimates on the probability one side or the other will prevail in court.  It seems equally rational however, especially in aggressive, winner-take-all global business environments, when challenges and disputes (over IP and intangibles) are becoming the norm, proactive unraveling and monitoring of the origins and development of ideas and innovation must go well beyond patent applications and the wishful thinking assumptions embedded in NDA’s, confidentiality agreements, and non-competes to bring:

1.  Clarity and transparency to idea – innovation development processes reflective of the six requisites to trade secrecy…

2. Respectful bridges between innovators, collaborators, IP counsel, business unit managers, and decision makers to produce efficiencies and improved oversight, stewardship, and management of IP and intangibles…

3. Comprehensive picture of what know how – intellectual capital warrants protections, when proprietary status (safeguards) should attach, and how to tailor risk mitigation measures commensurate with the assets’ (projected) life and value cycle and company culture, and…

4. Rationale to facilitate broad buy in to strenghten compliance with the best practices necessary to protect – preserve (sustain) control, use, ownership, value, and brand integrity of those assets!

That’s why it is important today to proactively unravel and monitor the origins and development of ideas and innovation!


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