A federal judge ordered toy giant Mattel Inc. to pay rival MGA Entertainment more than $309 million on Thursday, marking another tumultuous chapter in the years-long legal fight between the two companies over ownership of the lucrative Bratz fashion doll line.
The judge's order marks the latest stunning reversal of fortune for the upstart MGA, which has been involved in a legal battle with Mattel since 2004 over who owns the Bratz doll. The dolls with pouty lips, hip hop-style clothing and oversized feet were aimed at "tweens," or girls ages 9 to 11, and flew off the shelves when they debuted in 2001.
U.S. District Court Judge David O. Carter reduced a previous jury award from more than $88 million to $85 million but then awarded Los Angeles-based MGA an additional $85 million in punitive damages for trade secrets misappropriation. He also awarded MGA and its Chief Executive Officer Isaac Larian $137 million in legal fees related to copyright and trade secrets issues and more than $2 million in legal fees and related costs on the trade secrets claims.
The total was more than $309.8 million, according to court papers and MGA lead counsel Jennifer Keller.
Mattel said in a statement that it was disappointed with the ruling and would "review the court's ruling and evaluate next steps." The El Segundo-based toy maker can appeal.
Michael Zeller and John Quinn, who handled the case for Mattel, did not immediately return calls seeking comment.
Mattel first filed a lawsuit in 2004 alleging that Bratz designer Carter Bryant was employed at Mattel when he created the Bratz dolls.
In 2008, a federal jury in Riverside sided with Mattel and awarded it $100 million — but the verdict was overturned on appeal and the case sent back for retrial.
After a second trial, this time in Santa Ana, a jury in April rejected Mattel's claims and instead awarded MGA damages in a counter-claim. The smaller toymaker had alleged that Mattel used hired gumshoes to spy on its toy designs and marketing plans at trade shows and stole its trade secrets.
Mattel filed post-trial motions asking for a new trial and challenging whether the 26 trade secrets MGA alleged it stole actually qualified as trade secrets under the law.
The judge, however, denied the motion for a new trial and rejected Mattel's arguments on the trade secrets.
Carter lowered the original $88.5 million in damages on the trade secrets claims to $85 million after finding the jury made a mathematical error and awarded damages on one claim twice. But the judge then awarded an additional $85 million in punitive damages.
"We are disappointed with the recent rulings on the post-trial motions. Mattel strongly believes that the outcome at the trial level is not supported by the evidence or the law," Mattel said in a statement. "Additionally, we remain committed to finding a reasonable resolution to the litigation, and are focused on our primary goal — to make and sell great toys."
Keller, the MGA attorney, said the ruling was a huge win for the smaller company. She said the judge's carefully worded rulings seemed to leave little room for Mattel to win on appeal.
"I think Judge Carter was very, very careful in everything he did to really give Mattel the benefit of the doubt," she said in a telephone interview. "His rulings were really right down the middle."
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