Bratz fight with Mattel costs MGA $100 million

When MGA Entertainment Inc decided to toy with the idea of making pouty-lipped Bratz dolls, little did it know that the girl fight with Barbie would cost it $100 million (Dh367m) in damages.

MGA Entertainment Inc and its chief executive officer Isaac Larian were told by a federal United States jury to pay a total of $90m in three causes of action related to Mattel's employment contract with designer Carter Bryant, who developed the Bratz concept. The jury also ordered MGA, Larian and subsidiary MGA Hong Kong to pay a total of $10m for copyright infringement.

The amount fell far short of the $1.8 billion that Mattel attorneys had demanded in their closing arguments. Still, the world's largest toymaker hailed the damage award as a victory and said it planned to file an injunction to stop MGA from producing the Bratz line.

"Mattel has pursued this case first and foremost as a matter of principle," Mattel CEO Robert A Eckert said. "We have an obligation to defend ourselves against competitors who choose to engage in fraudulent activities against us."

Larian said he would appeal, and MGA attorney Thomas Nolan contended that the three awards related to the contract dispute were duplicative. US District Judge Stephen Larson must decide if that is true and determine a final amount to be paid to Mattel at a future hearing. Nolan said he planned to ask Larson to set total damages at no more than $40m.

The jury did not award any punitive damages and found that neither Larian nor MGA acted willfully when they used Bryant's drawings, which could have increased the damages.

"We are thrilled that this jury sent a strong message that they want these companies to compete in the marketplace and not the courtroom," Nolan said.

Larian said MGA would keep making Bratz dolls even as Mattel attorneys prepared to meet later to discuss their legal strategies.

The same jury that decided the damages phase concluded last month that Bratz designer Carter Bryant came up with the Bratz concept while working at Mattel. Jurors placed the value of Bryant's drawings at $31,500, and awarded that plus interest to Mattel.

In his closing arguments, Mattel attorney John Quinn said MGA owed Mattel at least $1bn in Bratz profits and interest, while chief executive Isaac Larian aided in the breach of contract and owed nearly $800m for his complicity. MGA attorneys countered that the jury should award Mattel as little as $30m because the company had built the doll line's value with smart additions, branding and packaging.

The jury awarded damages $20m against MGA and $10m against Larian in each of three causes of action – intentional interference with contractual relations, aiding and abetting breach of fiduciary duty, and aiding and abetting breach of the duty of loyalty.

They also found that MGA owed Mattel $6m for copyright infringement, while Larian owed $3m in distributions he had received from Bratz-related sales and MGA Hong Kong owed $1m.

After their introduction in 2001, the Bratz line exploded in popularity among "tweens" – girls seven to 12. The highly stylised fashion dolls have oversized feet, heads and hands, curling lashes and huge, almond-shaped eyes daubed with exotic-coloured eyeshadow.

In the past seven years, MGA has built the popular brand to include more than 40 characters and expanded it with spin-offs such as Bratz Babyz, Bratz Petz, Bratz Boyz and items like helmets, backpacks and bedsheets.

Sales of Barbie have slid since Bratz's Yasmin, Cloe, Jade and Sasha came on the scene. US sales of Barbie were down 15 per cent in 2007 and 12 per cent in the first quarter of 2008, while international sales increased six per cent in 2008 as opposed to 12 per cent the previous year.

Designer Bryant settled with Mattel on the eve of the trial. The terms of that settlement have not been made public.