Mattel and MGA Fight over “Bratz” Dolls

A federal judge in California has ruled that Mattel Inc. may no longer delay paying MGA Entertainment Inc. $137 million for attorneys’ fees and costs incurred in a dispute between the companies over “Bratz” dolls.

Mattel had sought an injunction to stop the payment, expressing concern that the money was subject to competing claims from others, including MGA’s former attorneys.

MGA recently settled a fee dispute with its former lawyers and also reached an agreement with its insurance carrier over coverage for its legal fees.

The lawsuit arose from a dispute between Carter Bryant, a toy designer, and Mattel over whether Byrant invented Bratz dolls while working at Mattel, or whether he came up with the idea before he signed a contract with Mattel.
Bryant later brought the idea to MGA, which has sold Bratz dolls since 2001.  A decrease in sales of Mattel’s Barbie dolls has been attributed to the increasing popularity of the Bratz brand.

Mattel claimed that Bryant stole its copyrights and trade secrets when he brought Bratz to MGA.  Mattel alleged that it lost $300 million in profits as a result.

Mattel sued MGA and in 2008 and was awarded $100 million in damages by a California federal court jury.  However, major parts of the decision were struck down by the Ninth Circuit Court of Appeals in 2010.

In 2011, another jury found that MGA had not stolen Mattel’s trade secrets but that, to the contrary, Mattel had misappropriated MGA’s Bratz-related trade secrets.  MGA was awarded $108 million in attorneys’ fees and $202 million for damages and other costs.

But in January of 2013, the Ninth Circuit threw out this second jury award, holding that MGA’s counterclaim of trade secret theft should not have reached the jury.  The Ninth Circuit let stand the jury’s award of $137 million for attorneys’ fees and costs incurred by MGA in successfully defending itself against Mattel’s copyright claims.

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson

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