Mattel, headquartered in El Segundo, CA, is the second-largest toy maker in the world (after Lego), with its products sold in more than 150 countries. It was founded by Elliot and Ruth Handler and Harold 'Matt' Matson in a garage in Los Angeles in January 1945, originally a picture-frame business. When they began producing toys, their first big hits were a child-size ukulele and a cap pistol called the Burp Gun. The following year, Matson sold his share to the Handlers due to poor health, and Ruth took over his stake, creating the first Barbie in 1959. By 1966, Mattel controlled 12 percent of the $2 billion toy market in the United States.

German toymaker Greiner & Hausser sued Mattel in 1961, alleging infringement of its patent for the 'doll hip joint' used on the Lilli doll. The case was settled out of court in 1963, and Mattel purchased…