Mattel Inc. v. MGA Entertainment Inc. For decades, Barbie dominated the doll industry. That changed in 2001 with the arrival of Cloe, Jade, Sasha, and Yasmin. Under the brand name “Bratz,” these dolls had puffy lips and exotic features. They also had the attention of kids who were ready for something new. In only five years, Bratz seized about 40 percent of Barbie’s business. So Mattel Inc., Barbie’s manufacturers, released a new line of dolls known as “My Scene.” Much like Bratz, they had big heads with slim bodies.

In response, MGA Entertainment, the maker of the Bratz dolls, filed a lawsuit against Mattel in April 2005. The suit claimed that “My Scene” copied the Bratz style. Mattel then filed a suit of its own and named Carter Bryant, a designer at MGA. Formerly, Bryant had worked at Mattel on and off from 1995 to 2000. Mattel declared that Bryant had come up with the look for the Bratz dolls while he was still their employee. His contract stipulated that any designs he created during his tenure belonged to their company.

The case went to a jury trial, and in July 2008, the ruling was in favor of Mattel. MGA had to pay $100 million and remove their dolls from stores due to an injunction that lasted for about a year. However, the toy companies continued to battle it out. In 2011, MGA won a different case, which determined that Mattel actually had been the one to steal trade secrets.

Based on this case, why is it necessary to have laws related to sharing confidential information?

to prevent businesses from manufacturing competing products
to prevent businesses from filing frivolous, time-wasting lawsuits
to prevent businesses from using ideas generated at another company
to prevent businesses from hiring employees from other companies