So I was watching the doc The Power of Grayskull the other day and there is an interview with Joe Morrison (former Mattel VP Marketing) where he states that Mattel made product, packaging, and marketing materials that he himself presented to various retailers. Obviously this was in response to the suit brought by Conan Properties against Mattel for infringement and fraud. This struck a chord with me in our debate over the origins of the Special Edition figure so I did some research on the lawsuit.
Here are the official court documents on that suit and subsequent judgment.
https://casetext.com/case/conan-prop...NUMBER_GROUP=P
It's an interesting read but to cut to the point, the main judgment that applies here is the court ruling that these two properties "were not significantly similar". This is a drastic simplification to the ruling but I use it here to project my point.
Now, knowing that Mattel had in fact produced figures and card art for the purpose of pitching this line to retail (according to the statement by Joe Morrison), and were being sued for fraud and breech of contact, I would have to reasonably deduce Mattel used these products as evidence in their defense.
Looking at the judgement in the case, and the supposition that the created product was considered in that judgment, I think it's safe to assume that Mattel's Conan figure was not simply a brown-haired He-Man. Had that been the case, I don't think the court would have ruled no significant similarities.
I know this doesn't prove where this figure came from, but I think it's another piece of evidence towards scratching leftover Conan figures off the list.