A federal judge refused Mattel’s request for a new trial, but Mattel could appeal the decision.
The federal judge in California ordered Thursday that Mattel pay its competitor $170 million in damages and nearly $140 million in legal fees and other costs in a dispute over ownership claims for the lucrative doll line aimed at pre-teen girls.
The court battle has been underway for seven years. Mattel first sued Larian and MGA saying they stole the Bratz concept from Mattel. Mattel won. On appeal, however, judges threw out that decision and ordered a retrial. MGA and Larian won in the second trial.
The decision last week was Mattel’s effort to overturn that decision and go to a third trial.
A jury earlier this year rejected copyright infringement claims by Mattel, the maker of the world-famous Barbie doll, and awarded MGA $88.4 million in damages.
Judge David O. Carter Thursday lowered that award to $85 million after he found the jury had erroneously added one part of their decision for $3.4 million twice, but then the judge added $85 million in punitive damages.
“We are disappointed with the recent rulings on the post trial motions,” Mattel said in a statement after the ruling. “Mattel strongly believes that the outcome at the trial level is not supported by the evidence or the law,” the company said. The firm did not, however, say whether it would appeal.
MGA for its part called the judge’s order a “step in the right direction to right the wrongs of Mattel’s criminal acts.” But Larian said he would be back in court seeking even more money from Mattel. “We will now pursue our antitrust case against Mattel and its CEO Bob Eckert in order to get fully compensated for the damages Mattel has caused MGA,” Larian said.
MGA launched Bratz dolls in June 2001 and they quickly became Barbie’s top competitor, racking up more than $1 billion in annual sales and cutting into Mattel’s doll market dominance of a half-century with Barbie.
Mattel filed suit in 2004. In the first trial in 2008, a jury sided with Mattel and awarded $100 million in damages. MGA was ordered to turn over the franchise to Mattel and stop making and selling Bratz products. That virtually put Larian out of business. The order was overturned on appeal and sent back for a retrial, but MGA had already taken a beating in the market.
Mattel had argued that Carter Bryant, Bratz’s creator and a former Mattel designer, came up with the idea for the dolls in 1999 while employed by Mattel. The firm said his contract required that all ideas he came up with while employed by Mattel belonged to Mattel. It charged that Bryant violated the contract by taking his ideas to MGA after quitting the firm.
Bryant had worked for Mattel, then quit, then went back again for another stint, then quit again and joined MGA. Bryant said he dreamed up the Bratz concept in 1998 while living in Missouri during the break period between his two stints with Mattel. Mattel charged that was a cover up. The jury did not agree with Mattel.
Larian, meanwhile, accused Mattel of spying on MGA, including using false identification cards to enter the MGA premises to photograph its products without authorization. Larian said Mattel stole 114 trade secrets. The jury found evidence that 26 trade secrets were stolen and that was the basis for the $88.4 million it totaled up in damages.
The judge wrote: “Mattel’s chief executive officer, general counsel, two in-house counsel, three former high-ranking executives and a current employee all admitted under oath that employees misrepresented themselves to access competitor’s private showrooms and gather information about unreleased products. Every one of these individuals acknowledges that the conduct was sanctioned by senior members of Mattel’s corporate hierarchy and that it was improper.”
Mattel won on one point. It had claimed that MGA and Larian interfered with Mattel’s contractual relations with designer Bryant. But the jury awarded Mattel only $10,000 in damages for that.
Larian said he had spent as much as $170 million on legal costs. The judge accepted $140 million of that and ordered Mattel to pay.
Larian’s attorney said she had heard, but did not know for certain, that Mattel had spent $400 million on the case through April.
The case nearly put MGA out of business. The Bratz line largely died in stores after Mattel won in the first trial. It isn’t clear if Larian and MGA will ever be able to get back to the business status they had before the first trial. Larian said last week that MGA lost a billion dollars in sales as a result of the suit. That is the basis of the separate suit that he has pending against Mattel. That trial is scheduled to begin October 14.
