Bloomberg News

Mattel Returns to Judges Who Threw Out Bratz Verdict

December 10, 2012

Mattel Inc. (MAT:US) is asking the same appeals court panel that two years ago concluded the Barbie doll would thrive on competition to now reverse a $310 million jury verdict won by Bratz doll maker MGA Entertainment Inc.

Mattel is scheduled to present its case today in Pasadena, California, before the three-judge U.S Court of Appeals panel that undid Mattel’s earlier trial victory giving the company almost complete ownership of its rival’s Bratz dolls. The panel ruled then that the world’s largest toymaker couldn’t claim a monopoly “over fashion dolls with a bratty look or attitude.”

This time, El Segundo, California-based Mattel no longer argues, after two trials and more than eight years of litigation, that MGA infringes its copyright because the first Bratz sketches were made by a Mattel designer. Mattel now contends the “jaw-dropping” $137.2 million in legal fees it was ordered to pay MGA for having to defend the copyright claim is unjustified.

“Mattel knows of no copyright fee and cost award that was similarly shifted on a claim that had been successful before one jury, had resulted in substantial relief from a federal district judge, and was remanded by a court of appeals before being unsuccessful before a second jury,” the company said in its Feb. 27 appeal. “Nor is Mattel aware of any copyright fee and cost award of similar magnitude.”

Bratty Doll

In 2010, the appeals court panel said that, even if Mattel were to convince a jury that it owned the original Bratz sketches made by its former employee, Carter Bryant, it would only entitle it to ownership of that particular expression of the bratty-doll type, not to the idea itself. That decision overturned a $100 million jury verdict.

“Degas can’t prohibit other artists from painting ballerinas, and Charlaine Harris can’t stop Stephenie Meyer from publishing Twilight just because Sookie came first,” the circuit court’s chief judge, Alex Kozinski, said in that ruling. “Similarly, MGA was free to look at Bryant’s sketches and say, ‘Good idea! We want to create bratty dolls too.’”

A jury in Santa Ana, California, last year rejected Mattel’s claim that MGA stole the idea for Bratz dolls. It also found Mattel liable for stealing MGA’s trade secrets and awarded closely held MGA $88.5 million.

U.S. District Judge David Carter, who reduced that verdict to $85 million, later added $85 million in punitive damages.

Carter also awarded MGA $2.52 million in fees and costs for its trade-secret claim, in addition to $105.6 million in lawyer fees and $31.6 million in costs for Mattel’s copyright claim, which the judge said “imperiled free expression, competition, and the only serious competitor Mattel had faced in the fashion doll market in nearly 50 years.”

Trade Secrets

MGA claimed Mattel employees used fake business cards to get into the company’s showrooms at toy fairs in New York, Hong Kong and Nuremberg, Germany, and to obtain proprietary information about its products. Mattel said in its appeal that the trade-secret claims were filed too late, the alleged secrets weren’t secrets at all, and the amount of damages wasn’t supported by evidence.

“Mattel’s quest to overturn the jury verdict on sufficiency grounds faces a high bar, and here it is insurmountable,” MGA said in its response to Mattel’s appeal. “What the district court termed the ‘rich evidentiary record’ easily supports the jury’s finding that Mattel misappropriated MGA’s trade secrets and the jury’s damages award.”

MGA, based in Van Nuys, California, said the $310 million verdict is “but a drop in the bucket” compared to the harm Mattel caused MGA through “its litigation strategy of destroying Bratz.”

The case is Mattel Inc. v. MGA Entertainment Inc., 11-56357, U.S. Court of Appeals for the Ninth Circuit (San Francisco).

To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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  • MAT
    (Mattel Inc)
    • $35.42 USD
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