Mattel, Inc. finally caught a break, and a warning, in its nine-year copyright battle with MGA Entertainment over the rights to the pouty-lipped Bratz dolls. The 9th U.S. Circuit Court of Appeals overturned MGA’s the $170 million verdict plus special damages award in a theft of trade secrets verdict. But the court allowed MGA to keep $137 millions in attorney’s fees and costs for its victory in the copyright portion of the case.
After years of litigation and two trials over rights to the trashy-chic dolls, Chief Judge Alex Kozinski concluded the opinion with a warning.
“While this may not be the last word on the subject, perhaps Mattel and MGA can take a lesson from their target demographic: Play nice,” he wrote.
While the craze for the dolls has died since its height in 2005-2006, the litigation has been heated.
Mattel originally sued MGA claiming MGA stole its designs by hiring a key employee away from Mattel. In addition, the toymaker accused MGA of copyright violation. The original jury in 2008 sided with Mattel and ordered MGA to pay Mattel $100 million. But the 9th Circuit threw out the verdict in 2010.
With the tide seeming to change in its favor, a 2011 retrial favored MGA. The jury found no copyright violation by MGA and did hold Mattel liable for newly added MGA counterclaim of trade secret theft.
MGA’s counterclaim that Mattel employees stole trade secrets by posing as buyers at toy fairs just didn’t cut it with the appeals court.
“Because MGA’s trade-secret claim should not have reached this jury, we vacate the verdict along with the related damages, fees and costs.”
Judges Stephen Trott and Kim Wardlaw joined Kozinski in the opinion.
Case Mattel v. MGA Entertainment, No. 11-56357