I actually know this artist, somewhat. Met him at an artists guild conference. While I didn't read this Yahoo article, I recognized the subject from the URL. Mattel should have figured this out from the get-go, for similar reasons that allow parodies, etc.
It's not really copyright issue-related, but more patent and trademark related. It made headlines of the local papers last night that he'd won the lawsuit that mattel had filed. I think it's a great day for art in that regard. What's really amazing is that he'd lost initially, and couldn't find a Utah attorney to represent him. Utah has some pretty strange views on Fair Use, views that are mostly related to the predominant religion here. Using their icons is strictly for those that are willing to jump into protracted legal battles. So, it was a red-letter day here for reasons that go far beyond the implications of the Mattel case.