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Mattel Seeks To Stop Bratz Dolls
The Barbie maker wants to bar MGA from
producing the toys, seize its inventory and even get
rights to the name.
David
Colker
The Los Angeles Times
November 11, 2008
The Barbie vs. Bratz case was back in federal court
Monday, and it was clear Barbie-maker Mattel wanted all
the dolls in the toy box.
Based on a trial victory in July, Mattel Inc. asked the
court not only to stop MGA Entertainment Inc. from
making the sassy Bratz, but also to require the Van Nuys
company to turn over all its dolls, including those
already in stores.
Mattel, which won the rights to early drawings of the
rival doll after weeks of contentious testimony, even
wants the Bratz name.
"The benefit that was developed belongs to Mattel," said
Judge Stephen Larson at the beginning of Monday's
hearing.
The loss of the Bratz name could be especially
devastating to MGA, which has built its toy empire on
the doll it launched in 2001.
But like everything else in this four-year legal battle,
the issues were complex. At the hearing in U.S. District
Court in Riverside, the basic question came down to just
how much Mattel was owed -- even after a copyright
infringement win -- for a brand it didn't develop.
Mattel argued that MGA's success with the Bratz line all
stemmed from the fact that it lured away a Barbie
designer, Carter Bryant, who came up with the doll
concept and name while working under an exclusive
contract.
"Anything that Carter Bryant created while he was in the
employ of Mattel" belonged to the company, argued Mattel
attorney Michael Zeller.
"We ask that our property be returned."
MGA didn't dispute the jury decision, including that the
company and Chief Executive Isaac Larian played a role
in the contract breach. But the company argued that by
developing and marketing the doll, it made Bratz a hit.
"The value was created lawfully," said attorney Jason
Russell for the Bratz maker.
"The value was all created by MGA."
Larson, who peppered lawyers for both sides with
questions, indicated that he was at least partially
swayed by the argument, giving hope to MGA.
"The measurable value to Bratz," the judge said from the
bench, "is so very much a function of what Isaac Larian
and his team put into it." The argument that MGA should
be left with nothing, Larson said, "is quite a leap."
Larson said he would issue his decision within the next
couple of weeks. But either way, it wouldn't take effect
until January, thus sparing retailers the possibility
that the dolls would be seized from their shelves in
front of crying children. Larson said he wanted to
ensure retailers that during the holiday shopping
season, "nothing is going to happen in respect to this."
This latest chapter in the legal battle over the Bratz
dolls comes at a rocky financial time for both
companies. On Thursday Mattel said it was eliminating
1,000 jobs -- about 3% of its worldwide workforce --
including 170 positions at company headquarters in El
Segundo.
MGA cut 70 jobs in October. Larian blamed the 4% cutback
in his workforce on legal expenses incurred in the
Mattel case. He said the company, which is family owned,
has spent about $80 million on the case so far.
Publicly owned Mattel wouldn't disclose how much it has
spent total on the case. But the world's largest toy
maker has disclosed that it spent nearly $30 million in
the first nine months of this year.
In August, the jury in the copyright infringement case
awarded Mattel damages of up to about $100 million, but
that was only about 6% of what the company requested.
The injunction, if approved, could prove to be far more
injurious to MGA.
Barbie, created in 1959, remains the dominant force in
the fashion doll business. But analysts say it was hit
hard by the popularity of Bratz.
In the third quarter of this year, Mattel reported that
worldwide Barbie sales slipped 1% (including a 3% boost
from currency fluctuations) compared with the same
period in 2007.
That was a relatively good quarter for Barbie compared
with some. In the previous quarter, worldwide sales of
the doll were down a whopping 21% compared with the
year-earlier period.
MGA doesn't disclose its earnings, but analysts have
said that sales of Bratz also have waned.
The injunction is far from the last matter scheduled to
be decided between Mattel and MGA. But it's so key,
people close to the situation say, that until it's
decided there's little chance either company will do
what little girls know dolls would do -- sit down for a
nice chat. Perhaps over tea. |
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