Mattel not to challenge MGA for Bratz copyright, appealed a $310Mn award

Category: WTO Sub-category: Intellectual Property
Document type: case study

10-Mar-2012 | 12:40 IST | Edited by: Sharmila Maitra

Mattel Inc. has appealed a $310 million award against its eight-year legal fight over Bratz dolls but will no longer pursue its claim that a rival toy maker infringed on its copyright by developing the lucrative line.

In court papers filed with the 9th Circuit Court of Appeals, attorneys for Mattel said that the company disagreed with the jury findings that MGA Entertainment didn't steal the idea for the pouty-lipped, hip hop-inspired dolls but will not challenge it after the grueling legal battle.

However, El Segundo-based Mattel did ask the appeals court in the papers filed on 27th February 2012, to reverse the financial judgment given by a judge based on a jury verdict. The award included $172 million in damages for MGA for misappropriation of trade secrets, and $137 million for MGA in attorney fees and defense costs. The CEO of MGA said he is pleased Mattel will not challenge the ruling on copyright infringement.

The Bratz dolls were a blockbuster hit for Los Angeles-based MGA when the line debuted in 2001 and generated nearly $1 billion in sales at their peak in 2006.

The two companies have been dueling for years over who owned the copyright to Bratz.

Mattel first sued in 2004, claiming Bratz designer Carter Bryant was working for Mattel when he did the initial drawings on the provocative, urban-themed dolls with large eyes, heads, lips and feet, and tiny noses. The dolls were an overwhelming hit with "tweens" as sales of Mattel's Barbie line declined.

A federal jury found in favor of Mattel in a 2008 copyright infringement trial and awarded the company $100 million in damages.

The verdict was overturned on appeal, however, and a second jury last year found in favor of MGA on the copyright issue.

That jury was also asked to consider allegations in a countersuit filed by MGA that accused Mattel of sending spies to toy fairs and trade shows to steal MGA's trade secrets.

Jurors found that Mattel stole 26 of the 114 trade secrets MGA listed, ultimately resulting in $85 million in damages for MGA.

The federal judge overseeing the case later awarded MGA an additional $85 million in punitive damages for trade secrets misappropriation, and MGA, Larian and the company's Hong Kong affiliate $137 million in legal fees.

Mattel has, however argued in the court papers filed on 27th of February that MGA's lawsuit on trade secrets was filed too late and shouldn't have been included in the trial.

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Mattel, Inc. was founded by Harold "Matt" Matson and Elliot Handler in 1945. It is the world's largest toy company based on revenue. The company's name is derived from products it produces include Fisher Price, Barbie dolls, Hot Wheels and Matchbox toys, Masters of the Universe, American Girl dolls, board games, and, in the early 1980s, video game consoles.

MGA Entertainment (Micro-Games America Entertainment) is a manufacturer of children's toys and entertainment products founded in 1979. Its products include the Bratz fashion doll line, Lalaloopsy, Kachooz!, Moxie Girlz, Moxie Teenz, Hugwallas, BFC, Ink. and Rescue Pets.

Bratz is an American line of fashion dolls and merchandise manufactured by MGA Entertainment. They are portrayed as teenagers distinguished by large heads and skinny bodies, almond-shaped eyes adorned with eyeshadow, and lush, glossy lips.