Mattel in Hot Water over its new Barbie Doll

Mattel has made a big effort at diversifying its “Barbie” toy franchise in recent years. However, it may have run into a publicity nightmare with its newest version, a Barbie based on the famous Mexican painter Frieda Kahlo. Kahlo’s great niece is claiming that she has the sole rights to Kahlo’s image, and that she would never have licensed the image to Mattel. (Actually, the niece claims that she wishes the Barbie had more of Kahlo’s features, including her well known unibrow).

Mattel claims that it obtained a license to use the image from the Frieda Kahlo Corporation, which obtained the rights to license Kahlo’s image more than a decade ago. That company has since marketed a number of products with Kahlo’s image, including a prepaid credit card and a luxury brand of tequila. These products were likely inappropriate, as Kahlo was an alcoholic and addicted to painkillers, and was a well-known communist who would not have supported the commercialization of her name into a banking relationship. Members of Kahlo’s family have long been against the commercialization of Kahlo’s image.

Kahlo’s great niece claims that she now has the rights to Kahlo’s image because the Frieda Kahlo Corporation is in breach of its obligations to the Kahlo Estate. In a lawsuit filed more than a year ago, the niece and other members of Kahlo’s family assert that the Corporation failed to disclose to them the uses of Kahlo’s image, and that this breach nullified the Corporation’s ability to license the image. Mattel stands by its license with the Corporation.

This is a legal problem for Mattel, and highlights an issue that parties need to pay special attention to in licensing matters: make sure that the party you are obtaining the license from has the right to license the work, and that there is no cloud on the title to the rights you are obtaining. Proper due diligence may have turned up the existence of the lawsuit; certainly, the license agreement should contain representations and warranties by the licensor (here the Corporation) that it has the right to license the work, and that it will defend the licensee (Mattel) from any lawsuit challenging the license, and will indemnify Mattel for any damages incurred in the lawsuit against Mattel.

These damages could be significant: Mattel has huge expenses in the development, manufacture and worldwide rollout of this new product; if the matter is settled by paying a royalty to the family as well, then Mattel will have suffered damages for those sums as well.

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