Mattel awarded $100m damages in Bratz decision

LOS ANGELES - Mattel Inc., the world's biggest toy maker, was awarded $100 million in copyright-infringement and contract damages for its claims that MGA Entertainment Inc.'s Bratz dolls are based on the work of a former Mattel designer.

A federal jury in Riverside, Calif., yesterday found that some of the pouty and multiethnic Bratz dolls that closely held MGA started selling in 2001 are substantially similar to the drawings of the former Barbie-doll designer. The jury found last month, in the trial's first phase, that designer Carter Bryant made the sketches while he was at Mattel in 1999 and 2000.

Mattel, which sought as much as $1 billion in Bratz profits from MGA, won $90 million for its claims that MGA and its majority owner and chief executive, Isaac Larian, intentionally interfered with Bryant's Mattel contract and helped him breach his fiduciary duty and his duty of loyalty to Mattel. The company also won $10 million on its copyright-infringement claims.

The jurors sent "a clear message that they want companies to compete in the marketplace and not in the courtroom," said MGA lawyer Thomas Nolan after the verdict was read.

The jury found on July 17 that Bryant, who left Mattel in 2000, conceived the Bratz characters and name while he was employed by the El Segundo, Calif.-based toy maker. Mattel's Barbie sales have slumped in part because of competition from the edgy Bratz dolls. Bryant settled with Mattel in May, a week before the trial started. Terms of the settlement weren't disclosed.

Jurors yesterday rejected Mattel's claim of willful infringement and its request for punitive damages. US District Judge Stephen Larson said he would reduce yesterday's award if he determines the jury found duplicate damages on some issues. If the verdict stands, it would be the 16th-largest jury award this year, according to data compiled by Bloomberg.

Mattel had argued that MGA's profit from Bratz, through June of this year, was $777.9 million on revenue of $3.1 billion. Larian's financial benefit from Bratz, based on distributions to him and the value of his MGA stake, was $696 million, an expert witness for Mattel testified. MGA disputed these figures and said its Bratz profit was no more than $405 million.

MGA also disputed Mattel's infringement claims, saying Mattel failed to show any close similarity between Bryant's drawings and later-generation Bratz dolls and other product lines such as Kidz and Petz and branded merchandise.