There is little doubt that since 1959, when Ruth Handler and her husband Elliot launched the Barbie doll through their company Mattel Inc, they have shaped not only the game in the toy market, but they have mastered the importance of intellectual property ownership. Since the Barbie doll is a brand, it incorporates components of intellectual property, one of which is intellectual property ownership, which stems from an intellectual property infringement dispute between the Barbie doll and Bild Lilli, a well-known German toy doll. This is significant because it demonstrates acquired intellectual property ownership through a settlement agreement between the parties in which Mattel Inc purchased the Bild Lilli doll’s copyright and patent rights, making Mattel Inc the exclusive right owners of the revamped and redesigned Bild Lilli doll, which we now call the Barbie doll today. This article demonstrates the shift in intellectual property rights ownership through a dispute over doll similarity and how Mattel Inc has acquired exclusive intellectual property rights of Bild Lilli and making use of its intellectual property rights in this day and age since the settlement agreement between these entities to make a success of their Barbie doll.
Greiner & Hausser GmbH (G&H), a prominent German company, launched a doll named Bild Lilli in 1955, based on a cartoon character that appeared in the German newspaper Bild-Zeitung. However, shortly after its debut, Bild Lilli became embroiled in an intellectual property dispute, with G&H alleging that Ruth Handler, co-founder of Mattel Inc, stole the idea and concept of Bild Lilli and created a comparable doll called Barbie. As you may already know, the Barbie doll stands out as one of the most iconic toys in the history of the toy industry, having debuted in 1959 and generating billions in revenue through different Barbie doll versions by the year 2023.
Concerning intellectual property, the Bild Lilli doll is considered to have used the ‘doll hip joint’ function, which is the technical functionality used in dolls to make movements on its limbs. In this regard, G&H obtained a United States (US) patent on its Bild Lilli doll hip joint and later sold its exclusive rights in and around the Bild Lilli doll in the US, Canada, Hong Kong, and the United Kingdom to Louis Marx and Co (Marx), a New York-based toy manufacturer, for a period of ten years.
The dispute between these parties appeared to have escalated in 1961, when G&H filed an application in the US against Mattel Inc, alleging that Mattel’s Barbie doll was an infringement of the G&H doll due to the use of the ‘hip joint’ functionality, which appeared to be a technical feature in Mattel’s Barbie doll. However, Mattel Inc flatly denied this infringement application, claiming that G&H’s patent was invalid and/or that Mattel Inc did not infringe on G&H’s patent. G&H and Marx also claimed that the Barbie doll was ‘a direct take-off and copy’ of G&H’s Bild Lilli, and that Mattel Inc ‘falsely and misleadingly represented itself as having originated the design’ of the doll.
After several years of back and forth in this issue, the parties ultimately decided to settle in 1964, when they entered into multiple agreements about the intellectual property rights of the Barbie and Bild Lilli dolls. Mattel Inc purchased G&H and Marx’s Bild Lilli doll copyright, as well as all of its German and US patent rights, for three lump-sum payments of 85 000 Deutschemarks (equivalent to R 1 703 044,48 today). Furthermore, the parties’ settlement agreement called for Marx’s licence to be handed to Mattel in 1970. Further parts of the settlement agreement between the parties suggested that Mattel would not utilise the name Bild Lilli in any form, and G&H promised not to develop or sell dolls with names similar to Barbie or Bild Lilli.
Since intellectual property rights can be understood to protect mental creations such as inventions, Mattel’s purchase, and ownership of G&H’s copyright in and around the Bild Lilli doll clearly demonstrates that Mattel Inc had acquired these rights to produce the Barbie doll and control its mass production. Furthermore, the acquisition of these intellectual property rights implied that Mattel Inc could make and produce derivatives of the Barbie doll, implying that Mattel Inc could produce similar doll characters in different shapes, sizes, colours, and outfits, as well as different versions of songs and any Barbie movies (such as Barbie (2023)). This also meant that Mattel Inc could distribute the Barbie doll in any way they saw fit for their business.
Following the parties’ settlement agreement in the 1970s, it is clear that Mattel Inc has leveraged the acquired intellectual property rights ownership to its advantage, as seen by the renowned Barbie movies, the colour pink, Barbie doll television show and cartoons. The Barbie doll has made a fortune from the acquisition of the Bild Lilli intellectual property rights throughout the years. This demonstrates that had Mattel Inc not obtained these intellectual property rights, the Barbie doll may have been said to continue infringing on Bild Lilli’s intellectual property.
In this case, we can learn that proper acquisition of intellectual property rights license agreement, which stipulates the terms of the use of the license grants the owner of the rights the right to use these acquired rights to reproduce, control, and make derivatives of the work in any manner they deem fit, as is the case with the Barbie doll. Furthermore, because ownership is so important in the world of technology, Mattel Inc is free to commercialise its Barbie intellectual property rights with any new technology. And lastly, since Mattel Inc has a licence over the Barbie doll, Mattel Inc can actively monitor any use of its copyright license, as well as monitor and prevent other companies and third parties from infringing on its copyright, trademarks, and any other intellectual property rights it has over the Barbie doll.
Lusapho Yaso LLB (UWC) is a legal consultant at InhouseLawyer in Johannesburg.
This article was first published in De Rebus in 2023 (Oct) DR 38.
