Mattel Doesn’t Own Sketches, Idea for MGA’s Bratz, Jury Says

Mattel Inc. (MAT) doesn’t own the sketches or the idea for Bratz dolls made by MGA Entertainment Inc. and the rival toymaker didn’t steal the idea for the dolls from Mattel, a federal jury ruled in the copyright lawsuit.

The federal court jury in Santa Ana, California, also has awarded damages of at least $3.4 million to MGA for trade-secret theft. The jury is continuing to read its verdict.

The jury had been asked to determine whether MGA stole Mattel’s trade secrets in 2000, when it made an agreement with the designer who Mattel says worked for it at the time he came up with the idea for Bratz, and whether the dolls MGA started selling in 2001 infringed Mattel’s copyright.

Last year, a federal appeals court overturned a 2008 verdict in Mattel’s favor. A jury in Riverside, California, had awarded Mattel $100 million in damages after agreeing that the designer, Carter Bryant, made most of the initial sketches for the dolls while he worked for El Segundo, California-based Mattel. Mattel had sought as much as $1 billion in damages.

In the current trial, Mattel claimed lost profits of $314 million to $544 million.

The designer has always maintained he came up with the Bratz idea and made the first drawings in 1998, while he was living in Missouri with his parents in between two stints of working for Mattel, MGA’s lawyers told the jurors.

The appeals court, in ordering a second trial, said the lower-court judge had erred in ruling that Bryant’s employment agreement entitled Mattel to the designer’s drawings as a matter of law. The appeals court also found that the judge, Stephen Larson, who has since returned to private practice, was wrong to award Mattel the rights to most of MGA’s Bratz products.

The case is Bryant v. Mattel, 04-09049, U.S. District Court, Central District of California (Santa Ana).

To contact the reporters on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net; Bill Callahan in San Diego at callahan@san.rr.com

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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