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MGA takes Bratz back.

MGA Entertainment has been exonerated of Mattel's claims that MGA violated its copyrights and stole trade secrets related to the Bratz dolls. Bratz were introduced 10 years ago.

Stunning many in the licensing business, the jury also found in favor of MGA relative to a countersuit accusing Mattel of stealing MGA trade secrets. The jury awarded MGA $88.5 million in damages on the latter finding.

MGA's lawyers say that because the jury found Mattel's conduct "willful and malicious," the judge has the option of tripling the damages.

In the original 2008 trial, a jury awarded Mattel $100 million in damages for copyright infringement, and ordered MGA to give the Bratz franchise to Mattel. Those decisions were overturned last year.

"We are disappointed by the verdict, but we remain committed to protecting the intellectual property that is at the heart of business success," Mattel CEO Robert Eckert said in a statement.

"This is really a great victory for all the entrepreneurs around the world, for MGA employees, for my family and more importantly, for all the immigrants who come to this country to pursue the American dream," said MGA founder/CEO Isaac Larian.

At its peak, Bratz is widely reported (with no attribution) to have generated $1 billion in annual retail sales.

Mattel's shares dropped almost 3%, to a low of $26.17, following the announcement. The stock closed at $26.67 that day, down just shy of 1% from that day's open and a little more than $1 shy of its 52-week high hit April 15th.

At press time, Mattel had yet to decide if it would pursue the case further, and Larian is considering suing Mattel for hardship and legal fees.

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Publication:Licensing Letter
Date:May 2, 2011
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