Mattel's Attempt To Claim Ownership Of Bratz Comes Back To Bite Them: Now They May Owe $88.5 Million

from the blowback dept

Wow. For years, we've been following the legal battle between toy giant Mattel and toy upstart MGA concerning the ownership of Bratz dolls -- the first dolls in years to seriously compete with Mattel's classic Barbie doll. If you haven't been following it, a guy who worked for Mattel came up with the idea for the Bratz dolls. At Mattel he was not involved in designing dolls, and he claims that he did all the work in his spare time, not on company time. He then left and went to MGA, which agreed to make the Bratz dolls, which quickly became a huge success story. Mattel claimed that, under the guy's contractual agreement with Mattel, anything he invented belonged to them. The original district court ruling sided with Mattel and the judge (amazingly) ordered that Mattel should get all Bratz dolls including future plans for dolls. That made absolutely no sense to us. At best, if the determination was that the original designs were Mattel's, the company should get access to the original designs, and maybe some early dolls. But everything after that had nothing, whatsoever, to do with Mattel.

Thankfully, Judge Kozinski on the 9th Circuit came to the rescue and wrote a fantastic ruling explaining all of this to the district court, and sending the case back for a new trial. As part of that, MGA also filed some counterclaims against Mattel, including the claim that Mattel illegally spied on MGA and copied trade secrets from the company through questionable means. When these counterclaims were filed, I actually suggested that it was silly and distracting from the larger point... which I still stand by.

However, from a karmic perspective, it's interesting to see that the new jury has rejected nearly all of the claims against MGA, but sided with MGA on the trade secrets claim, and suggested an award of $88.5 million from Mattel to MGA -- an amount that MGA is going to ask the court to double for punitive reasons.

To summarize: in the course of a few short years, Mattel went from losing in the marketplace to MGA, to winning a court case that gave it total control over the competing product... to now not having control and having to pay MGA potentially millions.

Of course, this isn't over yet. Mattel has already asked the court for a brand new trial, and if that doesn't work, it says it's going to appeal the case, even if some "industry analysts" are apparently telling Mattel the company should just drop it. I have a feeling we haven't yet seen the end of this case, however.


Reader Comments (rss)

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    weneedhelp (profile), Apr 22nd, 2011 @ 1:13pm

    Nelson Muntz: Ha ha.

     

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    Greg G (profile), Apr 22nd, 2011 @ 1:39pm

    Mattel are acting like Bratz. Time to spank them and tell them to go away until they want to behave.

     

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    Aaron Martin-Colby (profile), Apr 22nd, 2011 @ 1:47pm

    Dammit!

    Damn.

    I was rooting for Mattel. I figured that it was the only way to guarantee no future Bratz movies.

     

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    Alatar, Apr 22nd, 2011 @ 2:47pm

    Market analysts?

    There are market analysts for plastic dolls? This must be one hell of a job!

     

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    herbert, Apr 22nd, 2011 @ 3:09pm

    bloody good job! perhaps will teach them not to be so greedy in future! shame it came to this, but crap happens. pity other industries dont learn from this (and other companies) mistakes!

     

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    Faith, Apr 22nd, 2011 @ 4:33pm

    Get a life Mattel

    I use to collect Barbies and spent thousands of dollars every year on the hobby. After they sewed the magazine company Millers, I stopped buying Barbies on the first market. I buy garage sales ones now to give to the poor. Now I collect Bratz and love them. I hate what Mattel does to smaller companies trying and acutally putting them out of bussiness. Shame on them. They will get what is due them in due time.

     

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    Lawrence D'Oliveiro, Apr 22nd, 2011 @ 7:31pm

    Itís Like A Game Of Othello/Reversi

    Where a single new move can completely reverse the situation on the board.

     

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    2 cents, Apr 23rd, 2011 @ 10:14am

    It was the laywers' fault. They told Mattel there was enough evidence to prove the case. Mattel, wanting to believe they could stop Bratz with this, saw what they wanted to see and fell for it. Instead, all Mattel's lawyers did was make a bunch of accusations that appeared to fit some of the facts if other facts could be carefully hid. It didn't work.

     

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    panda (profile), Apr 23rd, 2011 @ 10:23am

    Follow the money

    It was the fault or Mattel's laywers. To make their $300 or $400 million, they told Mattel there was enough evidence to prove the case. Mattel, desperately wanting to stop Bratz with this, were too trusting in their lawyers. Instead, all Mattel's lawyers did was make a bunch of accusations that appeared to fit some of the facts - as long as other facts could be carefully hid. It didn't work. Mattel should sue Quinn to get their money back.

     

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    Joseph K (profile), Apr 23rd, 2011 @ 8:09pm

    Jackpot justice

    I guess when a company tries to go all in on a gamble like this sometimes they lose. Jackpot justice is a high takes crap shoot and sometimes the dice don't go your way.

     

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    jjray, Apr 25th, 2011 @ 10:57am

    the counterclaim

    Nice article Mike. I'm curious about your opinion that MGA should not have pursued the counterclaim. If it were a bench trial, perhaps I see your reasoning but in a jury trial it often comes down to which party appears "good" or at least less bad. Haven't studied the facts of the counterclaim but assume it allowed MGA to present evidence at least damaging to the credibility of Mattel executives (who may have testified during plaintiff's case to support case in chief). Yes, it is bad to just throw weak claims against the wall but, unfortunately, when the opposing party hands you a bucket full of mudd ... . Maybe you know something I don't though.

     

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    Knighthorse (profile), Apr 25th, 2011 @ 11:17pm

    If only.......

    I too have been following this case. I had a case similar to this in civil court in San Diego for a different kind of dolls. I was the owner of Knighthorse LLC and I manufactured life sized dolls called Lovable Dolls. From May of 2006 until May of 2008 I worked for the company that makes the RealDoll. I was fired in May of 2008, and in Sept of 2008 I decided to start a company competing with them. I also decided to sue them for unpaid profit sharing which I had in my contract. They in turn sued me as a defense and in April of 2010 a jury found against me due to the other attorneys closing statement that "even though I may have not even laid hands to clay in the creation of any of my dolls, if I merely THOUGHT about making them while employed there, then my dolls should belong to his client". With that, the jury awarded damages to the tune of 300k plus legal fees and also forced me to transfer my molds of dolls that were not even created for months even a full year plus after I was fired, to them. Plus the name of my product ( lovable dolls), my website and all dolls I had in my possession at the time of the ruling(even if they were in production for existing clients) I have lost everything I worked for after being fired based on the logic that I "thought" about it while I was employed at another company. I informed my attorney of the Barbie vs. Bratz case but he refused to use any of the findings during the injunctive phase of the trial and I am past my time to appeal. I have lost everything and the final damages will end up being somewhere close to 800k, bankruptcy, and a ruined reputation but it is good to see that there is some justice out there......when you can afford it.

     

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