Mattel's Lawsuit To Claim Ownership Of Bratz Comes Back To Bite Big Time: Told To Pay $309 Million

from the damn dept

As Stephan Kinsella notes, “live by IP, die by IP.” You may recall the infamous legal fight over who owns the Bratz dolls. I won’t go through the full history, but basically Mattel claimed that it owned the rights to Bratz dolls, because the creator of those dolls worked at Mattel (though not in a doll designing job) at the time he developed the dolls (not during work time). That guy eventually went to competitor MGA who produced the Bratz line of dolls. Mattel racked up an early series of wins in the case. Those wins seemed far overreaching. Not only did they give Mattel the rights to the original Bratz dolls, but all future plans as well, despite none of that having anything to do with Mattel.

Thankfully, sanity was regained at the appelate level, and eventually things turned around to bite Mattel for bringing the lawsuit in the first place. That’s because the lawsuit allowed MGA to countersue over trade secrets violations. In April, we noted that this might end up costing Mattel $88.5 million, as the court rejected all of Mattel’s claims and sided with MGA on the trade secret claim.

Turns out the result was even more damaging for Mattel. The court didn’t just stick with the $88.5 million award the jury gave. Instead, while he “reduced” the jury award to $85 million, he then tacked on another $85 million in punitive damages and told Mattel to pay $137 million in legal fees to MGA. Total bill? Mattel has to fork over $309.8 million. All for a lawsuit Mattel brought in the first place. And that doesn’t count the estimated $400 million that Mattel spent in legal fees during this fight. Add it all up and Mattel’s decision to sue appears to have cost the company upwards of $700 million dollars.

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Companies: mattel, mga

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Comments on “Mattel's Lawsuit To Claim Ownership Of Bratz Comes Back To Bite Big Time: Told To Pay $309 Million”

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53 Comments
Anonymous Coward says:

Nicely Done

Of course, the shareholders will be outraged that so much of their money has been thrown down the drain by the company’s foolish lawyers and managers. Naturally, there will be a terrible retribution against the perps. Any lawyer who was even peripherally involved can expect to get sacked. Likewise for any manager or executive. There is no way the CEO can survive.

Or maybe not. Meanwhile, in the world of the corporate psychopath and narcissist, all these legal losses are definitely somebody else’s fault. Who could have ever predicted what those mean old judges might do? The executives and lawyers feel terrible about what has happened. Further punishing them would be dreadful. Sacking them would be out of the question, they are highly skilled and important corporate officers. Indeed they might need to be given a luxury holiday at company expense plus a nice bonus, to make them feel better.

jd2112 (profile) says:

Re: Nicely Done

Or maybe not. Meanwhile, in the world of the corporate psychopath and narcissist, all these legal losses are definitely somebody else’s fault. Who could have ever predicted what those mean old judges might do? The executives and lawyers feel terrible about what has happened. Further punishing them would be dreadful. Sacking them would be out of the question, they are highly skilled and important corporate officers. Indeed they might need to be given a luxury holiday at company expense plus a nice bonus, to make them feel better.

Or even worse, they could go to a competitor and start a new toy line that Matell would have to sue over.

Anonymous Coward says:

Re: Re:

From Yahoo finance:

Mattel, Inc.(NasdaqGS: MAT )
Market Cap: 8.40B
Total Assets (from balance sheet): 5.42B

Letmesee, according to Mike, this lawsuit cost $0.7B. So if they pursue the all litigation all the time route, I figure their assets can support at least seven such lawsuits.

After that, there’s an extra $3B in the market cap. Dunno if that can be tapped to fund further lawsuits…

out_of_the_blue says:

Just two words: IM POSSIBLE.

That they could have spent $400M on lawyers. No matter how complex the case, staff lawyers just aren’t that expensive. (I assume they went outside to spend that much.) — YET I suspect a rake-off / kickback scheme from lawyers to executives; plus tax advantages by a padded expense account. Yes, just a guess on my part, but $400 MILLION! Nobody would be THAT crazy! — If anyone can say it’s genuine, please don’t: leave me my illusions.

In any event, it’s another story where chasing money leads to stupid excesses.

Anonymous Coward says:

$400 million in legal fees?

If the fight lasted 4 years, and they paid an average of a $1,000,000 yearly salary for their lawyers, that would mean Mattel had 100 lawyers working full time on just this case.

I’m trying to figure out exactly what that many lawyers could have been doing for that length of time on ONE case.

Anonymous Coward says:

Re: $400 million in legal fees?

First they had to make ‘life size’ replicas of all the dolls so that they could have the lawyers show each other where the ‘bad doll’ touched them…. Oh wait, the life size dolls were only for the lawyers recreational activities… but they still had to have them so that they could see and probe the similarities and differences between Barbie and the Brazt dolls.

The other $350 million went to the hookers and blow that supported the life size doll comparison party that went on for 6 months while they tried to figure out who was best at ‘pinning the tale’ on the dolls….

Ed C. says:

Re: Re: The legal system desperately needs some revamping.

No kidding. I heard of a case awhile back when a guy was actually sued by the local bar association because he was helping seniors fill out the proper paperwork for their wills. I don’t think it was so much that he didn’t have a license to practice law that pissed them off. It’s more likely that they weren’t getting their full fees for giving cookie cutter consolations for information that could be found in a $5 book, or free online, and the fees from lawsuits that sometimes arise from badly managed, or missing, wills. The fees from a case such as “Jarndyce and Jarndyce” would make them as giddy as schoolgirls!

Will Sizemore (profile) says:

$400M...

That amount probably doesn’t include ONLY salaries. They probably included fees for each filing, rent or lease on facilities so the lawyers had offices to work from, signing bonuses to get more lawyers, new computers, monitors, fax machines, etc., and IT staff to maintain that equipment, office staff to bring in coffee and food while the lawyers ‘slaved’ over every bit of legal jargon, applicable or not, and perhaps THAT could add up to the $400M.

Its still too much money to be thrown away. I wonder how much of the court fees and penalties are counted as actual revenue for our government.

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