Bratz dolls (Handout, MGA Entertainment / February 10, 2006)
In a stunning decision, a jury appears to be siding with the maker of Bratz dolls, MGA Entertainment Inc., over Mattel Inc. in the retrial over who owns the rights to the billion-dollar franchise.
The decision was being read Thursday morning in federal court in Santa Ana, capping eight days of jury deliberations, nearly three months of testimony and years of corporate bickering. Dozens of spectators packed U.S. District Judge David O. Carter's courtroom for the announcement, including the chief executives of both companies.
The eight-person jury, made up of four men and four women, rejected Mattel's copyright infringement claims; said Mattel did not own the rights to the dolls, early models or accessories; and said MGA did not steal trade secrets.
Monetary damages in the case were still being read in court at 9:30 a.m. Thursday. However, it appeared Mattel would owe MGA millions of dollars.
As the 28-page, 23-question verdict form was read, family members of MGA Chief Executive Isaac Larian, seated in the front row, including his wife, daughter and two sons, embraced one another, smiled and let out sighs of relief. On Mattel's side, lawyers seated in the audience looked shocked. Chief Executive Bob Eckert leaned back in his chair and rubbed his forehead with his hand.
The case pitted two Southland toy companies against each other: El Segundo-based Mattel, the world's No. 1 toy maker and owner of the Barbie empire, and Van Nuys-based MGA, a little-known company until it introduced the Bratz dolls. Launched in 2001, the dolls became a sensation, appealing to older girls and deeply cutting into sales of Barbie.
Mattel has long argued that MGA stole the concept for Bratz. The company maintains that Carter Bryant, Bratz's creator and a former Barbie designer, came up with the idea for the dolls in 1999 during his second stint with the company. The company said Bryant violated the terms of his "inventions agreement" by taking the idea for the wildly popular multiethnic dolls known for their oversized heads, pouty lips and sexy clothing to rival MGA, which went on to produce and market the billion-dollar franchise.
Bryant testified that he conceived of Bratz in 1998 when he was on a break from Mattel and living with his parents in Missouri -- an assertion often attacked in court by Mattel lawyers, who said Bryant was engaged in a massive cover-up with Larian.
During the first trial in 2008, a jury in Riverside sided with Mattel. The company, which had claimed copyright infringement and breach of contract, was awarded $100 million in damages; MGA was ordered to turn over the franchise to Mattel and stop making and selling Bratz products.
That decision was overturned last year by a three-judge panel of the U.S. 9th Circuit Court of Appeals, which ruled that MGA deserved credit for manufacturing and marketing the dolls. The appeals court said Mattel couldn't claim a monopoly over dolls with a bratty attitude.
This time around, jurors heard not only the copyright claims but also accusations from both companies that the other side stole trade secrets. MGA accused Mattel of sending employees into its showrooms at industry trade shows to spy on their products.
During long hours of testimony during the retrial, jurors were presented with an arsenal of star witnesses, damaging e-mails and dozens of dolls.
Now that the trial is over, the question remains over how viable the Bratz franchise is. Many analysts said the brand may be irreparably damaged by years of litigation, which has caused retailers to shy away from the brand. On top of that, the fashion doll category has grown more competitive in the last decade, making a total comeback by Bratz unlikely.
andrea.chang@latimes.com
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