In the latest round in the six-year old rock'em-sock'em intellectual property bout between the makers of Barbie and Bratz dolls, a federal jury has awarded MGA Entertainment damages of more than $88 million for misappropriation of trade secrets, while rejecting Mattel, Inc.'s claims against MGA for copyright infringement.
The dispute involves competing claims of intellectual property violations arising out of the design of the Bratz doll for MGA by Carter Bryant, a one-time Mattel employee who designed fashions and hair styles for its Barbie doll. In 2000, while still at Mattel, Bryant pitched his idea for the Bratz line of dolls to two MGA employees. The pitch was successful and, on October 4, 2000, Bryant gave Mattel two-week notice and signed a consulting agreement with MGA. Bryant contended that he worked on the idea on nights, weekends and when he was otherwise off-the-clock. The Bratz line proved very successful for MGA.
Mattel filed suit against MGA for copyright infringement and related claims. MGA responded with a counterclaim against Mattel for misappropriation of trade secrets byway of corporate espionage. MGA alleged that Mattel had operated a “market intelligence” department for more than a decade, that its employees had printed fake business cards to gain access to competitors' private showrooms, and that Mattel misappropriated confidential information about competitors' toys that were not yet on the market, including their appearance, operation, intended play patterns, price lists, and advertising plans and strategies.
The eight-person jury unanimously rejected Mattel's claims for copyright infringement and found that Mattel did not own the rights to either the Bratz dolls or their early models or sketches. The jury also found that MGA did not misappropriate Mattel's trade secrets.
The jury awarded damages on 26 of the 114 trade secrets MGA had accused Mattel of misappropriating. MGA may still recover its attorneys fees and an award of punitive damages based on the jury's finding that Mattel's conduct was willful and malicious.
In a hollow victory for Mattel, the jury also found that MGA had intentionally interfered with its contractual relations with Carter Bryant. Mattel was awarded $10,000 for those claims. The Barbie maker is expected to appeal.
The case is Bryant v. Mattel, 04-09049, U.S. District Court, Central District of California.
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