Toy Story 3: Dolly Dramas

Like cool girls in a middle-school popularity contest, the hippest dolls in the toy store are bickering over clothes, makeup and market share. MGA Entertainment, maker of the trendy Bratz dolls, says its product ideas have been borrowed by its archrival, Mattel, for My Scene Barbies. The company filed a lawsuit this month accusing Mattel of copycatting. The latest round of squabbling comes a year after Barbie's mother ship sued the creator of Bratz for working for MGA while still employed by Mattel and four years after the teenage bad-girl Bratz started strutting down the aisle with their oversize heads, bare bellies and hip-hop flair. A spokesman for MGA would not comment on pending litigation, but a Mattel rep was willing to take a swipe: "Apparently MGA has become concerned enough that it feels compelled to make an offensive strike."

Meanwhile, some other dollmakers seem to be playing nicely together. When another Mattel alum last year launched a wholesome line of dolls called the Only Hearts Club, he took a page or two from the 20-year-old American Girl line by forsaking mass-market retailers for direct channels and upscale stores and making books an integral accessory. Each of the six Only Hearts dolls comes with a book in which the character faces a moral dilemma and ends up making the honorable decision. Founder Rouben Terzian says he hopes the dolls, with more than $3 million in sales in less than a year, will teach girls to "think with your heart and do the right thing." In keeping with its sugar-and-spice products, an American Girl rep says the company welcomes the competition "if the result is better products on the market for girls."--By Jeninne Lee-St. John. With reporting by Matt Kettmann