August 26, 2008 10:38 PM

Mattel Awarded $100 Million in Bratz Case

Posted by Drew Combs

When does $100 million not seem like enough? How about when you asked for $2 billion.

A federal jury on Tuesday awarded Mattel, Inc. $100 million during the damages phase of its copyright infringement trial against the maker of the Bratz doll line, a monetary figure far less than the billions lawyers for the toy company were seeking.

"We are mildly disappointed," says John Quinn, name partner at Quinn Emanuel Urquhart Oliver & Hedges and lead trial counsel for Mattel. "It is less than what we had hoped for, but $100 million is still a substantial verdict and, most important, there was a finding of infringement."

MGA and its lead trial lawyer, Tom Nolan of Skadden, Arps, Slate, Meagher & Flom, didn't seem troubled  by the award. Quite the opposite. "We consider this a sweeping victory across the board for Isaac Larian and MGA," Nolan says. That's because, as Nolan sees it, the actual award is less than $100 million because three claims on which the jury found against MGA were based on the same conduct. "We think the more accurate number is $40 million or $20 million, which doesn't even cover [Mattel's] legal fees," Nolan says. (As previously reported by The Am Law Litigation Daily's Alison Frankel, the fees came in at $44 million for just the first half of 2008.)

The case has pitted Mattel against MGA Entertainment, whose Bratz doll in recent years overtook Barbie as the most popular doll line in several markets.

During the three-month trial, Mattel alleged that a former employee and Bratz doll creator, Carter Bryant, developed original sketches of the dolls while under contract with Mattel. As such, MGA had infringed Mattel's copyrights in producing the dolls using Bryant's sketches.

A confidential settlement with Bryant was reached on the eve of trial, leaving the toy companies to battle each other directly in court.

Bryant was called as a witness and testified that he did not conceive of the Bratz line while under contract with Mattel. The jury disagreed, ruling that since he created the original idea while still under contract with Mattel, his drawings and the doll prototypes belonged to Mattel.

The verdict capped off several stunning developments that emerged during the long trial.

Evidence emerged early on that Bryant used a program to scramble files on his computer before turning it over for discovery in 2004. And months into the trial, one of the jurors, who has since been removed, used ethically charged comments to disparage Isaac Larian, MGA's Iranian born chief executive.

A later hearing scheduled for will determine whether MGA will retain control of the Bratz doll line. A final damages award will be made by U.S. District Court Judge Stephen G. Larson.

Quinn says he intends to use the finding of infringement as the basis of an injunction seeking to prevent MGA from selling the dolls in the future.

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