Barbie was inspired by a German model in 1957
Tom Forsythe's photographs show the famous doll in a series of absurd situations, including sexually suggestive poses.
"We said the photos were parodies of the Barbie dolls and made fun of the image they project," said Annette Hurst, lead defence lawyer for Forsythe.
Household tasks
The images were used in a series of photographs titled Food Chain Barbie. Forsythe said they criticised "Barbie's embodiment of America's culture of consumption and conformism".
The Barbie dolls are shown doing household tasks, sitting in a food mixer and even wrapped in tortillas in a series of more than 40 images.
"Mattel is very disappointed that Judge Lew failed to take into consideration that consumers do not view Mr Forsythe's photographs as art or as parody and that a substantial number are confused into thinking that Mattel sponsors his goods," the company said in a statement.
Last year the company unsuccessfully tried to prevent Forsythe from using the doll and selling the photos as postcards.
'Powerful victory'
"The ruling doesn't mean it is open season (to exploit products by) Mattel, it means there is a certain amount of breathing room for artists who want to use a commercial symbol that has tremendous cultural meaning, for purposes of artistic expression," Forsythe's solicitor Simon Frankel said.
Forsythe said: "I'm not the first person to parody Barbie and I'm sure I won't be the last.
"The judge's decision is a powerful victory for all feminists who criticize Barbie's stereotype of women and the unquestioning acceptance that allows Mattel to sell these hyper sexualized hunks of plastic into millions of American homes."
Peter Eliasberg of the American Civil Liberties Union of Southern California, which supported Forsythe, called the judge's decision "a great victory for artists."