A US federal jury on Thursday rejected Mattel Inc’s claims that it owns the copyright to the blockbuster, billion-dollar Bratz doll line and instead awarded upstart rival MGA Entertainment Inc more than US$88 million in damages for misappropriation of trade secrets.
The verdict came as a staggering blow to the toy giant, which has long claimed the smaller company stole the idea for the ethnically diverse, pouty-lipped toys that gave platinum-haired Barbie a run for her money after decades of fashion doll dominance.
The jury, which deliberated for nearly two weeks after a three-month trial, also found that Mattel acted willfully and maliciously in misappropriating MGA’s trade secrets. That raises the possibility the judge could also add on punitive damages that could bring the total award to three times the jury’s initial findings, attorneys for both sides said.
Photo: EPA
The verdict will allow MGA to regain control of its flagship fashion doll and to once again try to compete with Mattel’s iconic Barbie doll to dominate the market, MGA attorney Jennifer Keller said.
“If Mattel had won this lawsuit, MGA would have been wiped out, and that’s what Mattel wanted to do,” she said.
MGA chief executive Officer Isaac Larian said he hoped the verdict would send a message to Mattel that it’s not alright to bully small-time entrepreneurs trying to break into the industry.
“I think justice prevailed in the end,” Larian said. “Hopefully this will be a major lesson for Mattel.”
Mattel chief executive Officer Bob Eckert, who was present for the verdict, said in a statement the company was disappointed, but was committed to protecting its intellectual property.
“Mattel’s first priority is, and always has been, to make and sell the best toys in the world,” the statement read.
The El Segundo-based company first sued more than six years ago, claiming Bratz designer Carter Bryant was working for Mattel when he did the initial drawings and early work on the provocative, hip hop-inspired dolls with large eyes, heads, lips and feet, and tiny noses. The Bratz doll, introduced in 2001, was a blockbuster hit with “tweens,” as Barbie sales declined.
Hundreds of millions of dollars in potential damages and the rights to the blockbuster toy were at stake in the acrimonious case, which was tremendously costly for both sides.
Larian said he had spent as much as US$170 million on legal fees, while analysts estimate Mattel’s expenses at US$400 million thus far.
A jury awarded Mattel US$100 million in 2008 and found that Bryant had developed the Bratz concept while with Mattel, but that verdict was overturned last year.
The doll line has been in limbo since then, and retailers have been hesitant to stock the toy because of uncertainty about its fate, Larian said.
“Mattel killed the Bratz brand. It is never going to be the same level as it was before,” he said.
MGA has denied Mattel’s copyright claims and countersued the larger company for misappropriation of trade secrets for engaging in corporate espionage at toy fairs and conspiring to keep Bratz products off retail shelves.
Jurors found that Mattel stole 26 of the 114 trade secrets MGA listed, resulting in the US$88.4 million in damages awarded to MGA.
Mattel attorneys said they would file a motion for a new trial and renew a motion challenging whether the 26 items for which jurors found them liable were actually trade secrets.
A three-day hearing on these issues and on punitive damages is set to begin on May 24.
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