[UPDATED with Award Proposal:] Bratz Maker MGA Wants $339 Million From Barbie Sugar Daddy Mattel
UPDATE, MAY 25, 9:30 A.M.: Analysts agree that in the seven years since Barbie-maker Mattel first went after Bratz manufacturer MGA Entertainment in court, the smaller company's fortune dwindled while Mattel remained a toy industry giant.
MGA is hoping to retrieve $339 million of that fortune in Santa Ana's federal courthouse this week.
That's how much Judge David O. Carter is being asked to award the Van Nuys company in damages, restitution, attorney fees and other fees. It's also three times more than the $88.4 million in damages a jury ruled MGA is entitled to last month.
Mattel, which is based in El Segundo, obviously, does not agree with MGA's proposed inflation. Saying its copyright infringement claims were "objectively reasonable," Mattel maintains it should not have to reimburse MGA Entertainment for court and attorney fees.
A $177 million chunk sought by MGA for punitive damages is based on the jury agreeing Mattel misappropriated trade secrets by sneaking employees into showrooms with MGA products. The Mattel reps used phony business cards to pose as doll buyers. Mattel downplayed that Nixonian dirty trick in its May 13 response to MGA's award proposal.
"At issue in this case is, at most, a sneak peek at 26 toys displayed at six toy fairs over a six-year period," Mattel lawyers wrote. "No one died. No towns were lost. MGA suffered no actual injury and did not even claim at trial that it did."
Carter could rule on MGA's request this week.UPDATE, APRIL 21, 12:31 P.M.:
The sluttier, younger chick wins!
A federal court jury in Santa Ana not only rejected claims that MGA Entertainment's popular line of Bratz dolls violates the copyright of Mattel's Barbie, but the panel awarded MGA $88.4 million for trade secrets misappropriated by Mattel.
The jury found Mattel "acted willfully and maliciously in misappropriation of any trade secrets."
This legal battle has been raging since 2004 (catch up on the history in the original post on next page). A different jury in 2008 ordered MGA and its chief executive Isaac Larian to pay Mattel $100 million. That was thrown out on appeal last year. The case returned before Judge David O. Carter in Santa Ana because his U.S. District Court jurisdiction includes Mattel's corporate offices in El Segundo.
The failure of management there to settle the case with MGA will go down as a "tremendously bad decision," according to at least one industry analyst.
"It means they wasted $400 million or so of shareholder money to get zero return," BMO Capital Markets' Gerrick Johnson tells Reuters.
One prays Ken canceled his hair-frosting appointment to console a distraught Barbie.
ORIGINAL POST, JAN. 13, 7:24 A.M.: Considering the preponderance of plastic, empty-headed bleach blondes one finds around these parts, at least a few have likely found their way into the federal courthouse in Santa Ana. But the two fitting the same description going before a judge at the Reagan today have achieved icon status without boob jobs, sugar daddies or Balboa Bay Club pool privileges.
They are Barbie and the Bratz, the girlhood dolls of different generations.
"Eat rubber, bitch!"
Mattel Inc., which owns Barbie, is trying yet again to prove in court that MGA Entertainment Inc. stole the toy company's intellectual property when it created the Bratz line a decade ago.
In 2004, Mattel alleged MGA hired away a Mattel employee who had originally created the Bratz sketches for Mattel. A jury in 2008 awarded the worldwide toy brand a cool $100 million. But the 9th District Court of Appeals overturned that verdict, so back before Judge David O. Carter the two sides go.
In the months leading up to the new trial, MGA has accused Mattel of destroying evidence and other legal misdeeds that Carter has already indicated the jury will not hear. But the judge will allow MGA to present evidence of Mattel dispatching "gumshoes" to infiltrate toy fairs at which MGA displayed its products. Mattel has called those accusations part of a "meritless, last-minute effort to deflect attention from MGA's years of well-documented wrongdoing."
Meanwhile, toy-industry watchers say the Bratz line is not as hot as it was back in the day, that the legal fees to fight off Mattel have already left MGA crippled.
"If Mattel wins, what do they win?" Sean McGowan, a toy-industry analyst at Needham & Co., tells Reuters. "They get a shoddy brand that's a shell of its former self."