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Mattel, MGA renew fight over Bratz dolls in court

Lawyers present opening statements in the copyright-infringement and breach-of-contract case to a packed courtroom in Santa Ana that includes Mattel CEO Robert Eckert and MGA CEO Isaac Larian.

January 18, 2011|By Andrea Chang, Los Angeles Times

It's the Battle of the Bratz, the sequel.

Bitter toy rivals Mattel Inc. and MGA Entertainment Inc. were back in court Tuesday to renew their years-long battle over who owns the billion-dollar Bratz, the sexy-with-an-attitude dolls that debuted a decade ago and deeply cut into Mattel's Barbie empire.

During the first trial in 2008, a jury in Riverside found that Bratz inventor and former Barbie designer Carter Bryant was in Mattel's employ when he developed the concept for the immensely popular dolls.

El Segundo-based Mattel, which had claimed copyright infringement and breach of contract, was awarded $100 million in damages and Bratz maker MGA was ordered to turn over the franchise and stop making and selling Bratz products.

That decision was overturned in July by a three-judge panel of the U.S. 9th Circuit Court of Appeals, which ruled that MGA deserved "sweat equity" for making and marketing the dolls. The federal appeals court also said Mattel couldn't claim a monopoly over dolls with a bratty attitude; the case was later sent to U.S. District Judge David O. Carter in Santa Ana for retrial.

In their opening statements Tuesday, lawyers presented their case to a packed courtroom that included Mattel Chief Executive Bob Eckert, MGA CEO Isaac Larian, reporters, company employees, teams of publicists and Larian's family members, including his daughter Jasmin, after whom one of the original Bratz dolls was named.

This time around, jurors will hear not only the copyright claims but also accusations from both companies that the other side stole trade secrets.

In laying out his case, Mattel lawyer John Quinn promised he would be able to disprove MGA's argument that Bryant was on a hiatus from Mattel when he came up with the idea for the dolls and would show that the designer had worked on the dolls when he was under contract with Mattel and then took the idea to rival MGA.

Calling MGA a mediocre toy company that sold cheap electronic toys before it launched Bratz to wild success in 2001, Quinn said the company, under Larian's instructions, then staged an elaborate cover-up that included initially saying the dolls were Larian's idea and later fabricating a "creation story" that Bryant was inspired to create the multiethnic dolls after driving past a high school in Missouri.

"MGA made Carter Bryant a double agent of the highest order," Quinn said. "Or should I say, the lowest."

Quinn also contended that MGA had hired away several Mattel workers and asked them to download confidential company documents before leaving the company.

In contrast to Quinn's tough approach, MGA lawyer Jennifer Keller favored a more chatty, casual manner. She used her 2-1/2 hours in part to depict Larian as a hopeful immigrant from Iran and Bryant as a creative soul with an original idea that just needed a forum to develop — an environment, she said, that didn't exist at the "cubicle farm" at Mattel.

She contended that Mattel went after the Bratz franchise not based on principle but only because the runaway success of the dolls gave Barbie, once the "unrivaled queen of the fashion doll market," her first-ever run for her money.

"We were competing with Mattel and beating them fairly," Keller said. "Mattel is pursuing this case because Barbie was flailing and Barbie was failing."

Keller also showed the jury early prototype models of the Bratz dolls and intricately detailed the doll-making process, one that she said was based on years of hard work done by MGA and not just a handful of drawings.

Of MGA's efforts to downplay Bryant's role, Keller said many companies like to portray new products as ideas conceived by the whole company and not by individual inventors. That's done, she said, to put the company and not inventor "Joe Smith" at the forefront. Like Quinn, she too lobbed charges of corporate espionage at the other side, accusing Mattel employees of faking IDs to spy on MGA's products at toy fairs.

The retrial is expected to last four months and will be overseen by Carter, known as a tough, no-nonsense judge. Both sides have promised an arsenal of star witnesses, damaging e-mails and other documents.

Outside the courtroom, the concern for many analysts is how viable the Bratz franchise is now that it's been so deeply damaged by litigation. Retailers have shied away from the brand and kids aren't snapping up the dolls like they used to, analysts said, noting that the fashion doll category has also grown more competitive in the last decade, making a total comeback by Bratz unlikely.

Although Bratz is still valuable, the companies "are fighting over a much smaller property," said Sean McGowan, a toy analyst at Needham & Co. "The amount of money both sides are spending is going to dwarf what the ultimate value will be."

That's especially true for MGA, a relatively small company in Van Nuys that has already spent $150 million in legal fees defending itself.

Larian himself has repeatedly cast the case as a classic David-and-Goliath battle, with Mattel flexing its corporate power to take advantage of the little guy.

"Anybody who dares has a target on their back by Mattel," Larian said in an interview with The Times on Monday. "MGA's message is the following: This is America; it's the land of opportunity. It's the land of the American dream, and large corporations with big pockets such as Mattel should not be allowed to bully and put small companies out of business."

Mattel, which has said it welcomes healthy competition, fired back.

"David made his own slingshot," Mattel lawyer Susan Estrich said. "He didn't steal it."

andrea.chang@latimes.com

 

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