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Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.

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Speaker 2: Remember the Barbie Girls song from the late nineteen nineties.

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Speaker 2: It's one of the best selling singles of all time,

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Speaker 2: with lyrics and a melody that play on repeat in

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Speaker 2: the minds of millions. Well, Mattel, which was extremely protective

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Speaker 2: and some might say over protective of its Barbie brand,

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Speaker 2: said the song violated its trademark and turned Barbie into

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Speaker 2: a sex object. So the toy company sued MCA Records,

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Speaker 2: and after a twelve year legal battle, Mattel lost at

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Speaker 2: the Ninth Circuit Court of Appeal. Can Savvy sat a

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Speaker 2: Little Bobs or Little Bubby's Dead? What a difference twenty

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Speaker 2: years makes? Now Mattel seems to be embracing the song

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Speaker 2: with perhaps a different approach to intellectual property. A new

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Speaker 2: version of the song by Nicki minaj I Spice and

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Speaker 2: the original artist Aqua, is featured on the soundtrack of

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Speaker 2: the summer blockbuster movie Barbie. Joining me is intellectual property

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Speaker 2: litigator and Barbie movie fan Terrence Ross, a partner at

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Speaker 2: Caton Mutchen Rosenman. Terry Mattel has been zealous about protecting

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Speaker 2: its intellectual property related to Barbie. Would you say it's

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Speaker 2: been aggressive or more than aggressive?

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Speaker 3: I would definitely say. Mattel over the years had a

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Speaker 3: reputation for being one of the most aggressive enforcers of

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Speaker 3: intellectual property rights, and many people would say overly aggressive

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Speaker 3: on the verge, if not actually being what we would

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Speaker 3: call an IP bully.

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Speaker 2: Barbie has been part of the popular culture and artists

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Speaker 2: have used Barbies in their works. For example, one artist

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Speaker 2: outfitted Barbie in bondage gear for a piece and food

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Speaker 2: chain Barbie was a series of photos of naked Barbies

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Speaker 2: stuffed in blenders, microwaves, and Barbie heads in a fondue pot,

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Speaker 2: and Mattel of course sued but lost those cases.

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Speaker 3: Well, that's correct. Essentially, over the last few decades, Mattel

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Speaker 3: had two distinct types of IP protection approaches for the

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Speaker 3: Barbie brand and quite frankly, for other parts of the

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Speaker 3: Mattel and universe. On the one hand, anything that was

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Speaker 3: product related that seemed to be trying to make money

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Speaker 3: off of by confusing consumers that it was somehow associated

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Speaker 3: with Barbie they went after aggressively. But at the same time,

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Speaker 3: anything that denigrated the Barbie image they went after just

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Speaker 3: as aggressively, if not more aggressively, in two different theories

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Speaker 3: used in each Troncha cases. With respect to products, it's

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Speaker 3: a trademark sort of theory. With respect to the denigration

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Speaker 3: of the Barbie University, it was more of a copyright approach.

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Speaker 3: And those are the cases they got into trouble over.

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Speaker 3: They got what I think a lot of people braided

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Speaker 3: is really bad legal advice as to when to pick

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Speaker 3: a fight went not to pick a fight, and they

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Speaker 3: went after a lot of cases where there was an

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Speaker 3: obvious First Amendment sort of defense that was available, and

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Speaker 3: they lost repeatedly as a result of failing to pick

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Speaker 3: the right fights.

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Speaker 2: There was that nine year battle over the Bratstall where

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Speaker 2: they were slept with one hundred and thirty eight million

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Speaker 2: dollar bill for legal fees for the opponent.

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Speaker 3: Yes, the Brat's Doll saga was one of the most

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Speaker 3: curious intellectual property cases that I can remember in the

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Speaker 3: last twenty twenty five years. It all started with an

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Speaker 3: employee of Mattel who started the Bratstall line on his

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Speaker 3: free time and then went off and launched it. And

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Speaker 3: the Bratsdall line apparently did very well initially Mattel attempted

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Speaker 3: to shut that down under a variety of theories, but

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Speaker 3: mostly the notion that they owned his work, And after many,

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Speaker 3: many years and going up and down in the courts,

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Speaker 3: they lost. And not only had they expended any inordinate

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Speaker 3: amount of money on their own attorneys fees, at the

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Speaker 3: end of the day, they got stuck with the defendant's

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Speaker 3: attorneys fees, and it was just a complete debliocre Mattel.

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Speaker 3: They looked bad and it really had a serious hit

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Speaker 3: on the bottom line.

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Speaker 2: As soon as I heard about the Barbie movie, the

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Speaker 2: song Barbie Girl went through my mind, and Michel didn't

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Speaker 2: like the sexual innuendo in the song and thought it

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Speaker 2: damaged Barbie's reputation. I guess you could say. So they

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Speaker 2: sued and they lost again after a twelve year battle.

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Speaker 3: Yep. That was another one where you just made a

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Speaker 3: poor judgment. At the end of the day, they went

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Speaker 3: after someone for essentially exercising their free speech rights and lost,

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Speaker 3: and probably deservedly. So you have to allow an area

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Speaker 3: of parody to criticize in a social commentary sort of

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Speaker 3: way popular brand. It just has to be allowed in

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Speaker 3: our constitutional system. And that was a classic case of

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Speaker 3: an example of what fits into that definition. You needed

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Speaker 3: to allow that sort of parody to happen in a

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Speaker 3: world where First Amendment exists here in this country, and

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Speaker 3: again one where I thought there was awfully bad judgment exercise.

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Speaker 3: One of the hardest things in this space, tune and

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Speaker 3: the intellectual privatey space is when a client who feels

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Speaker 3: very passionately comes to you as outside council and they

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Speaker 3: feel so strongly about their mark. It's personal to them,

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Speaker 3: it's meaningful to them, it's beyond economics, and you have

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Speaker 3: to sometimes say to them, look, this is the wrong

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Speaker 3: battle to fight. You should not bring this lawsuit. It

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Speaker 3: would be a major mistake to you, be a pr mistake.

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Speaker 3: You will lose it, You'll spend a lot of money.

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Speaker 3: I'm happy to take your money, but as a good

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Speaker 3: lawyer says every now and then, don't bring this lawsuit.

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Speaker 3: And they apparently were not getting that sort of honest

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Speaker 3: and frank counseling from their law firms over the year.

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Speaker 3: And that's why you walked in here. Lawyers referred to

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Speaker 3: as counselors. It's not just what is the black letter

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Speaker 3: or law? Do you have a lawsuit? Ay, there's this

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Speaker 3: counseling function. You have to get to know your client,

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Speaker 3: understand what their long term goals and needs are, and

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Speaker 3: try to help them to get there. And sometimes that

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Speaker 3: means don't file this lass, don't bring more attention to

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Speaker 3: the problem than already has, don't spend money on this.

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Speaker 3: They weren't getting that. There seems to be a new

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Speaker 3: sheriff in town. There though Mattel, oh in the last

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Speaker 3: couple of years have seen this real change in direction,

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Speaker 3: much more realistic, much more sensible choices being made on

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Speaker 3: the litigation front by Mattel.

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Speaker 2: Now Judge Kazinski. The last line of his opinion was

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Speaker 2: the parties are advised to chill. And maybe Mattel took

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Speaker 2: his advice because last year Mattel sued Rap Snacks over

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Speaker 2: it's Nicki Minaj branded barbecue honey Truffle potato chips. And

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Speaker 2: I mean, it seemed like Rap Snacks should have known better.

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Speaker 2: The chip bag featured the word Barbie in a familiar

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Speaker 2: script and a photo of the rapper wearing a Barbie necklace,

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Speaker 2: and you know, all pink Barbie colors. And yet Mattel's

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Speaker 2: lawyers dropped the dispute after.

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Speaker 3: About a month, and this was one of the cases

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Speaker 3: in which I thought Mattel was a relatively strong ground.

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Speaker 3: This is again a trademark sort of based action against

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Speaker 3: a product that was apparently free riding off of the

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Speaker 3: Barbie mark and reputation. Now, the backstory on that is

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Speaker 3: that Nicki Minaj has sort of played off of the

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Speaker 3: Barbie theme quite a bit, and her fans are really

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Speaker 3: into that, and it's not quite what I would call

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Speaker 3: fans fiction, which we've talked about in the past June,

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Speaker 3: but it sort of gets into that direction. And I

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Speaker 3: think an analysis at the end of the day was

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Speaker 3: made by Madell that this was one not to go

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Speaker 3: after because it was actually sort of promoting the brand

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Speaker 3: with a new general of Nicki Minaj fans who are

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Speaker 3: different from the usual fans of Mattel products. I don't

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Speaker 3: have any insight knowledge of this, but I think that

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Speaker 3: an analysis was made that this was one we don't pursue.

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Speaker 3: And I think that's been the biggest difference I've seen

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Speaker 3: in the last couple of years over what was going

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Speaker 3: on ten years ago, fifteen years ago with Mattel. They

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Speaker 3: seem to have learned to pick their fights and when

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Speaker 3: they get into a lawsuit that it turns out was

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Speaker 3: maybe not so smart. They get out, they don't litigate

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Speaker 3: it for ten years and eat up attorney's fees. It's

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Speaker 3: a much more intelligent intellectual property approach, and apparently it's

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Speaker 3: attributable to change in legal counsel.

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Speaker 2: So I wonder if all this Barbie mania is going

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Speaker 2: to lead to any lawsuits over the Barbie brand.

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Speaker 3: It's interesting because the movie itself represents a complete rebrand

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Speaker 3: of Barbie, and parts of the plots some things go

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Speaker 3: on in the movie. I don't want to spoil it

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Speaker 3: for anybody. For the handful of people haven't seen it.

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Speaker 2: I haven't seen it yet.

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Speaker 3: I don't want to spoil it too much. But I mean,

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Speaker 3: the CEO of Mattel is literally a character in the

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Speaker 3: movie betrayed sort of is a bad guy. And what

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Speaker 3: Mattel has done in the past visas the Barbie lane

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Speaker 3: is portrayed, is sort of not right. And you know,

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Speaker 3: this is a deliberate choice on the part of the

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Speaker 3: management to take Barbie in a new and different direction,

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Speaker 3: part of a rebrand. The movie can really be envisioned

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Speaker 3: in part it's just one long advertisement for the rebrand,

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Speaker 3: although It's a standalone, brilliant piece that everybody should go see.

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Speaker 3: One of the best movies I've seen a long time,

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Speaker 3: and Bryan Gosling does just a great job and it's

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Speaker 3: bound to get a nomination, if not win Best Actor.

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Speaker 3: But when you see the movie, you got boy. They're

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Speaker 3: gonna be taking a different approach to their intellectual property

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Speaker 3: going forward. They're now able to poke fun at themselves

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Speaker 3: and I think it's going to impact litigation by Mattel

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Speaker 3: going forward.

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Speaker 2: Well, I'm going to go to the Barbie movie this

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Speaker 2: weekend just to check out the intellectual property angle. Thanks

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Speaker 2: so much, Terry. That's Terrence Ross Cattan Mutchen Rosenman.

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Speaker 1: I got a little cocky. I made more than that

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Speaker 1: a little bit, and I think part of me, like

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Speaker 1: you know, felt like.

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Speaker 2: Like we'd need it. That was FTX founder Sam Bankman

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Speaker 2: Freed back in January of last year, before he was

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Speaker 2: indicted for allegedly misusing billions of dollars in customer funds.

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Speaker 2: Prosecutors seem to think that Bankman Freed has gotten a

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Speaker 2: little cocky again, and they're asking a judge to rescind

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Speaker 2: his two hundred and fifty million dollar bail package and

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Speaker 2: put him in jail until his trial in October. Joining

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Speaker 2: me is Bloomberg Legal reporter AVA Benny Morrison so Ava.

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Speaker 2: Just like Hunter Biden's case, this was another complete surprise

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Speaker 2: for a defendant in court this week. Bankmin Freed went

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Speaker 2: to court on Wednesday expecting to agree to a gag order.

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Speaker 2: When prosecutors sprung this on him and his lawyers was

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Speaker 2: a surprise.

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Speaker 4: The defense said that they only learned one minute before

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Speaker 4: the court hearing started that prosecutors wanted to have sam

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Speaker 4: Maateman Freed's bail revote. They obviously argued against that, really

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Speaker 4: pushing for a gag order instead. The judge seems to

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Speaker 4: have given him a little breathing room, approving that interim

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Speaker 4: order but asking both parties to file written submissions on

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Speaker 4: whether Sam Magman Fridge remain on bail or not.

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Speaker 2: Tell us what his bail package is. Right now.

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Speaker 4: At the moment, as it stands, Sam Bagman Freed is

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Speaker 4: essentially living under house arrest. He has to stay at

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Speaker 4: his parents' house in Palo Alto in California. He has

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Speaker 4: an electronic monitoring bracelet on around his ankle, and his

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Speaker 4: visitors to the home has to hand in their devices

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Speaker 4: to a security guard and log their name at the

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Speaker 4: front door. He's also signed a two hundred and fifty

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Speaker 4: million dollar personal recognizance bond. His parents have also kia

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Speaker 4: sided that, so if he flees while he's on bail,

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Speaker 4: they will be up for that to have to pay it. Essentially,

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Speaker 4: and the.

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Speaker 2: Justice Department's concerns relate to a New York Times story.

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Speaker 4: That's right, So Sam Bagman Frie landed in hot water

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Speaker 4: after The New York Times published a story about Caroline

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Speaker 4: Ellison's diary. But Caroline Ellison was the CEO of Alameda Research,

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Speaker 4: and she was also previously in a relationship with Sam

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Speaker 4: Bankman Freed. In these diary entries, which the Times reported on,

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Speaker 4: she seemed to express a bit of ambivalence about her

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Speaker 4: role at Alameda and working with Sam Bankman Freed after

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Speaker 4: they had separated. After this story was published, prosecutors bolt

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Speaker 4: a letter to court and said, we think that Sam

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Speaker 4: Banateman Freed has leaked this material to the Time in

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Speaker 4: an attempt to discredit Caroline Ellison. Ellison is one of

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Speaker 4: their star witnesses, and she's pleaded guilty defraud in a

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Speaker 4: cooperation agramment with prosecutors. Executors had asked the court to

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Speaker 4: subject Sam Bankman Free to a gag order, essentially banning

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Speaker 4: him from talking about much of the case and the

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Speaker 4: witnesses as well. Kaplan responded very swiftly and ordered Sam

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Speaker 4: to appear in his court to discuss the adequacy and

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Speaker 4: the continuation of his bail conditions. This suggested that his

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Speaker 4: bail was back on the table and that he could

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Speaker 4: potentially have his bowl revotd.

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Speaker 2: So, his lawyers argued that he had a First Amendment

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Speaker 2: right to counter public attacks against him, and that prosecutors

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Speaker 2: had stood silent while ftx's new CEO attacked Sam Bankman Freed.

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Speaker 4: Exactly so, countering the claims from the prosecution, Sam Bankman

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Speaker 4: Freed's lawyers filed their own letter in court to explain

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Speaker 4: what actually happened. They said that The New York Times

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Speaker 4: was already working on a story about Caroline Ellison, and

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Speaker 4: the reporter contacted Sam for his response. He then sat

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Speaker 4: down with that reporter and handed over some documents that

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Speaker 4: weren't part of discovery as part of his court case.

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Speaker 4: He said that he got them before STX collapsed, and

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Speaker 4: those documents were Caroline Ellison's diary entries, which he kept

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Speaker 4: in various Google documents. His lawyers said, yes, he was

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Speaker 4: exposing his First Amendment right, and you know, he's well

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Speaker 4: within his rights to be able to talk to this

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Speaker 4: reporter and put his start of the story. They also

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Speaker 4: seem to suggest that the prosecution was being a little

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Speaker 4: bit hypocritical here because they had stood by as the

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Speaker 4: new see of SDX, John J. Ray, had publicly attacked

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Speaker 4: and diparaging comments about Sam Bagmtfred in the press.

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Speaker 2: He's got this two hundred and fifteen million dollar bail

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Speaker 2: package with a lot of restrictions. Why do prosecutors want

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Speaker 2: him in jail?

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Speaker 4: Prosecutors really focused on his attempts to allegedly discredit one

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Speaker 4: witness and contact another witness. Going back earlier in the year,

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Speaker 4: it emerged that Sam Bakmanfried had sent a MESSI do

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Speaker 4: an encrypted app to the former General Counsel of FTXUS,

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Speaker 4: who is a potential witness in the case, and that

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Speaker 4: almost led him in hot order with his bowel conditions,

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Speaker 4: but he remained on bail and then in the last

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Speaker 4: week he has been identified as the source of some

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Speaker 4: of the documents that formed a New York Times article

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Speaker 4: that Caroline Ellison's diary. The prosecution said he was trying

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Speaker 4: to discredit Ellison, taint a potential jury pool, and potentially

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Speaker 4: engaged in witness tampering. So they said there were no

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Speaker 4: conditions that would mitigate the risk that he poses.

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Speaker 2: The prosecutor said, even if you take away the Internet

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Speaker 2: and phone from the defendant, where there is a will,

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Speaker 2: there's a way. I mean, what is he left with

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Speaker 2: it you take away the Internet and the phone.

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Speaker 4: Oh, pigeon caring. Maybe I'm not sure, but the prosecutions

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Speaker 4: found like they're at their width end here and they've

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Speaker 4: tried to curb his ability to use different forms of communication,

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Speaker 4: and now they're saying, you know what, he's going to

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Speaker 4: use whatever means as he can. I think his bell

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Speaker 4: should be revoked.

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Speaker 2: How did the judge react to that? Was he receptive

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Speaker 2: to that?

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Speaker 4: The judge was very cautious. I think in his approach

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Speaker 4: on bail, he quizzed the prosecution about how Sam Bateman

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Speaker 4: Freed's behavior could possibly amount to witness tampering. He also

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Speaker 4: said that he was very aware of Sam Bateman Fried's

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Speaker 4: First Amendment rights, but also very mindful of the government's

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Speaker 4: interests in what was happening in terms of approaches and

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Speaker 4: characterizations of witnesses. He also gave a bit of a

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Speaker 4: firm warning to Bankman Freed, saying he hoped that he

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Speaker 4: understood his concerns as well.

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Speaker 2: Has Caplin been skeptical about Bankman Freed's bail restrictions even before.

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Speaker 4: This, Yes, Caplan has scrutinized Sam Bakman Freed's bail conditions

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Speaker 4: very very closely. After he was arrested in December and

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Speaker 4: extradited to the US from the he negotiated this two

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Speaker 4: hundred and fifty million dollar bail package and it was granted,

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Speaker 4: but he had to come back to court again on

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Speaker 4: at least two occasions after he was using encrypted messaging

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Speaker 4: apps to contact a potential witness in the case and

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Speaker 4: also emailing the new CEO of STX. The prosecutors took

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Speaker 4: issue with that and said he should be banned from

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Speaker 4: using encrypted apps. They agreed on more conditions for his

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Speaker 4: bail with the defense, but the judge has taken a

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Speaker 4: really active role in saying, I don't know if those

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Speaker 4: conditions go far enough. He could possibly circumvent them and

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Speaker 4: use other ways to get in contact with witnesses. He's

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Speaker 4: even warned SBF at one point if he doesn't rain

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Speaker 4: in his use of encrypted apps and VPN technology that

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Speaker 4: he could land back in prison. So this is all

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Speaker 4: happening in the background and in the lead up to

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Speaker 4: this discussion about his that condition.

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Speaker 2: Do you think that there is a real chance that

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Speaker 2: the judge would put him in jail?

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Speaker 4: There is a chance, but it's clear that he's being

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Speaker 4: very cautious in his approach. It would be a big

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Speaker 4: step to take away this boil package. But this isn't

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Speaker 4: the first time that he has been skating on thin

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Speaker 4: ice and really testing the boundaries of those conditions. So

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Speaker 4: I think the judge has given the parties a chance

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Speaker 4: to file very thoughtful and considered submissions and then he

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Speaker 4: will take the same approach and come to a decision.

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Speaker 2: Thanks Aver. That's Bloomberg Legal reporter Eva Benni Morrison and

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Speaker 2: that's it for the s edition of the Bloomberg Law Show.

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Speaker 2: Remember you can always get the latest legal news on

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Speaker 2: Jim Grasso, and you're listening to Bloomberg