Court rules Mattel will not have to pay Bratz maker

Published on: 25th January 2013

An appellate court has ruled that Mattel will not have to pay MGA Entertainment $172m because a key claim should have been dismissed before trial.

The ruling was filed this Thursday by the US 9th Circuit Court of Appeals, and is the latest development in the dispute between Mattel and MGA. It leaves MGA with an award of about $137m, down from the original $310m award the company received in a 2011 retrial.

In a nine-page opinion for the three-judge panel, Chief Judge Alex Kozinski chided the two companies for the fierce fighting over rights to the doll franchise. He said: “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.”

The unanimous decision by the judging panel found that MGA’s counter-claim accusing Mattel of misappropriating trade secrets was not related to an earlier trade secret allegation by Mattel and, therefore, could not be included in the lawsuit. The panel left open the possibility of a separate action on the claim.

Mattel spokesman Alan Hilowitz said Mattel was “pleased” with Thursday’s ruling and looked forward to a “speedy and final resolution of this dispute”. Hilowitz said the company has a $137m reserve to pay MGA.

MGA Chief Executive Isaac Larian said that the company “absolutely” plans to bring another suit against Mattel for trade secret theft, although he declined to say when. He said Thursday’s ruling, which was the second time a verdict in favor of MGA has been overturned, was based on a “technicality” and had no bearing on the overall merit of the claim.

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