A few years, Mattel Inc., makers of the Barbie doll, took competitor MGA Entertainment Inc. and Iranian-American owner Isaac Larian to court, accusing them of stealing the Bratz doll design from Mattel. A jury agreed with Mattel and fined MGA so heavily it looked to push Larian into impoverishment.
But an appeals court overturned the verdict and ordered a new trial. Last 
week, the jury in that trial came in with a totally different decision, finding that Mattel stole trade secrets from MGA and must pay Larian’s company $88.5 million.
The federal jury in Santa Ana, California, came up with the verdict after eight days of deliberations and almost three months of testimony.
The jury unanimously rejected Mattel’s copyright infringement claims, saying the Barbie-maker did not own the rights to the big-eyed, pouty-faced Bratz dolls, their earlier models or sketches, and found that MGA did not steal trade secrets from its competitor. But the findings didn’t end there. The jury found that Mattel had stolen trade secrets from MGA and therefore owed the Bratz-maker $88.5 million. MGA had accused its rival of stealing 114 trade secrets in total; the jury awarded damages on 26 of those claims.
Mattel did, however, win on one count. The jury found that MGA and Larian intentionally interfered with Mattel’s contractual relations with Bratz creator Carter Bryant, who formerly designed for Mattel. As a result, Mattel was awarded $10,000 on that claims, a paltry sum compared to the $88.5 million awarded Larian, 57.
At the first trial in 2008, a different jury ordered Larian and MGA to pay $100 million in damages to Mattel for copyright infringement. MGA was ordered to relinquish the franchise to Mattel and stop producing and selling Bratz products. Larian lost on every key issue.
Last week, after the new decision, Larian said he felt “vindicated” and shed tears of joy. “The American dream lives,” he said, adding, “This is a victory for all entrepreneurs, immigrants who came here.”
The Los Angeles Times reported that MGA lawyer Annette Hurst said there was “no longer any doubt whatsoever about MGA’s ownership of Bratz. We came a long way,” she said.
But the case isn’t over yet. MGA and Mattel are scheduled to be back in court in late May. MGA’s lawyers said they would ask for punitive damages of up to two times the amount of the $88.5-million award in addition to attorneys’ fees.
Lawyers for Mattel are expected to ask US District Judge David O. Carter to call for a new trial; they also said they would dispute the trade secret damages. “This is not the final word in this case,” Mattel lawyer Susan Estrich said.
Mattel is the world’s Number One toy maker; MGA was a largely unknown company until it introduced its Bratz line in 2001. The rapidly growing popularity of the sassy Bratz dolls cut into the sales of Barbie; it was the first real competition Barbie had faced in her 50-year history.
Mattel has argued that its rival stole the concept for Bratz—claiming that Bryant , the Bratz designer, came up with the idea for the dolls in 1999 when he was still employed with Mattel and therefore violated the terms of his “inventions agreement,” under which all his work belonged to Mattel. Bryant testified that he conceived of Bratz in 1998 when he was on a break from Mattel and living in Missouri.
The 2008 jury decision was overturned last year by an appeals court, which ruled that MGA had a right to “sweat equity” for manufacturing and marketing the dolls; the appeals court also said Mattel couldn’t claim a monopoly over sassy dolls with a bratty attitude.
Mattel is expected to appeal the latest verdict if Judge Carter doesn’t order a new trial.
Larian was born in Kashan in central Iran. He emigrated from Iran when he was 17 years old and received a degree in civil engineering from California State University, Los Angeles. Larian dabbled in other businesses early on before going into toys.
MGA Entertainment Inc. produces 10 product lines: Lalaloopsy, Little Tikes, Bratz, Moxie Girlz, Moxie Teenz, BFC, Inc., Rescue Pets, Nara, Zapf Creation and My ePets3D.
In a 2009 interview, Larian advised fellow Iranian immigrants to follow their dreams. “Lead and don’t follow; dream and believe in your dream; don’t be afraid of failure; when you fail; learn from it; get up and do it again and do it better.”