Although it has lost its best-selling Bratz empire to rival Mattel, MGA Entertainment is hoping to regain prominence on toy store shelves with a new line of fashion dolls Moxie Girlz.
Moxie Girlz may be "Bratz Lite," less sexualized with more modest clothes and less pronounced lips, but there's a striking resemblance. Could MGA Entertainment Inc. be giving Mattel Inc. the ammunition to launch a second legal battle?
"At first glance, I think they look fairly similar," said Lawrence Hadley, an intellectual property attorney in the downtown L.A. office of Hennigan Bennett & Dorman LLP, who is not involved in the case. "But Mattel doesn't own the rights to all dolls in the world. There's got to be a line of what would infringe and what wouldn't infringe."
Hadley said if Mattel were to allege that the Moxie Girlz line infringes on its Bratz copyright, a court would compare the dolls' features, including the shape of the heads, eyes, nose and lips, to the original Bratz drawings. The court would also compare the dolls' body shape, including the size of the waist, and the positioning of the arms, hands, legs and knees to the original drawings.
"Clearly what MGA was trying to do with the Moxie Girlz was to go through the list of similarities that the court pointed out and change those," said Hadley, who examined photos of both doll lines at the Business Journal's request. "And I'm sure what Mattel would do is argue that there are plenty of other features that resulted in finding that the drawings were similar to the original Bratz."
Van Nuys toymaker MGA is doing a phased launch of its Moxie Girlz line with the motto "Be True! Be You!" in an effort to appeal to girls. The dolls, which range in price from $10.99 to $29.99, began appearing on some Target and Wal-Mart shelves July 22. However, MGA expects the line to be available nationwide beginning Aug. 15, and a TV, print, radio and online ad campaign will start in September.
A Target spokeswoman said the dolls were available in all the chain's stores as of Aug. 2, but declined to comment on Moxie Girlz sales thus far. Wal-Mart did not respond to requests for comment. MGA's Chief Executive Isaac Larian has said early sales have been "very good." The closely held company, however, doesn't disclose figures and declined to comment further.
Moxie Girlz is the first fashion doll line MGA is launching since its legal tussle with Mattel over the saucy Bratz fashion dolls began five years ago.
The litigation over Bratz resulted in a U.S. District Court Judge ordering MGA to stop selling the dolls at the end of the 2009 holiday season. At that point, MGA has to hand over portions of the Bratz intellectual property that will help Mattel prepare its own Bratz line for the spring 2010 sales season.
MGA is appealing the order, which federal Judge Stephen Larson issued after a jury decided last year that a former Mattel doll designer created the Bratz name and characters for MGA while working for Mattel. As a result of the litigation, control of the Bratz line was awarded to Mattel in addition to a $100 million damages award against MGA.
Mattel declined to comment on whether it plans to take legal action alleging that Moxie Girlz infringes on the Bratz line that it currently owns.
MGA also declined to comment for this article.
Industry experts said the success of Moxie Girlz is vital to MGA.
"MGA doesn't have any other hits or larger lines, so this is quite crucial to them," said Jim Silver, a toy industry analyst and editor in chief of online publication Time to Play. "MGA needs to replace a large column of Bratz. It was doing hundreds of millions of dollars and, if you take away Little Tikes, it counted for the bulk of sales."
MGA puts out several other products, including Little Tikes, Baby Born and Rescue Pets. But industry insiders said Bratz was by far MGA's best seller, having peaked in 2005 with an estimated $750 million in sales. Bratz's popularity has waned, however, with sales slipping below $200 million this year, which, according to analysts, is a dismal retail season. Another factor in the decline of Bratz has been increased competition, with Hannah Montana and other fresh toy phenomena taking the stage.
Bratz hit the toy scene in 2001, and quickly became a force on the fashion doll landscape, taking market share away from Mattel's famous Barbie. Although the miniskirted, big-lipped Bratz concerned some parents, young girls were attracted to the hip-hop-inspired dolls and their multiethnic look. As a result, the Bratz line became widely popular and a host of competitors began launching comparably provocative doll lines.
MGA now faces the challenge of regaining market share in a declining yet crowded segment. Doll sales fell 10 percent to $2.68 billion in 2008, according to NPD Group Inc., a Port Washington, N.Y., market research company.
That's because the competition for tween girls' attention is fierce, with young girls spending more time with virtual reality games, and social networking online and via mobile devices.
Still, MGA said research showed that girls want toys they can design and accessorize. The company's creative team started working on Moxie Girlz last year, and developed a line of four characters Lexa, Avery, Sasha and Sophina.
There are three different styles of Moxie Girlz. The "Jammaz" dolls are accessorized with musical instruments. The "Art-itude" dolls come with clothes that girls can color with markers. The hair of "Magic Hair" dolls can be styled and colored.
Industry analysts said MGA has a strong design and marketing team in place to create a fashion doll line that resonates with young girls, but pointed out that Moxie Girlz is just one of many on store shelves.
"Clearly, MGA has shown the ability to take share in a competitive category," said Hayley Wolff, of Rochdale Research, a business analyst firm in New York. "But I also think that Mattel's Barbie line is on much stronger footing this time around. It's much less vulnerable to incursion."
Wolff said that Barbie began gaining market share in the fourth quarter of last year, increasing its share by five points compared with the same quarter in 2007. Part of the turnaround can be attributed to the press Barbie got for her 50th birthday.
But Barbie isn't Moxie Girlz's sole competitor.
Liv, a fashion doll line launched July 31 by Toronto toymaker Spin Master Ltd., could pose the biggest threat to Moxie Girlz. The Liv dolls feature a larger head, similar to that of Bratz and Moxie Girlz. However, Liv's apparel and face is less exaggerated than those of Bratz and Moxie Girlz.
Toy analyst Silver said that Barbie will retain her dominance, and Moxie and Liv will be battling it out for second place.
"In terms of looks and feel, Liv and Moxie are going head to head," Silver said.
What's more, Mattel's version of the Bratz line is expected to hit store shelves in 2010, which could add another hurdle to Moxie Girlz's success and would mean a Mattel-MGA battle once again.
"A fashion doll is obviously what Isaac wanted to do," said Silver, who has known MGA's Larian for more than a decade. "I'm sure he would want to get even with Barbie and that's the direction he is heading. This is as much personal as it is business."
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