Custody Over the Bratz: Mattel v. MGA, Round Two

Custody Over the Bratz: Mattel v. MGA, Round Two

Leslie Chong is a JD Candidate at Osgoode Hall Law School.

The legal battle between Mattel and MGA Entertainment, Inc. has come one step closer to ending. Despite the seven-year legal saga between Mattel (owner of the classic Barbie doll) and MGA Entertainment (owner of the modern pouty-lipped Bratz dolls), the latter has come out victorious yet again following the retrial over the rights to the billion-dollar Bratz doll franchise.

Despite the slew of recent decisions in MGA’s favour, it is surmised that long-standing rival doll-maker Mattel will appeal this decision notwithstanding an estimated $400 million in legal fees already expended to determine ownership over the dolls.

In the retrial before Judge David Carter, the California-based federal court found that Mattel “did not own the rights to the dolls, early models or sketches; and said MGA did not steal trade secrets.” Rather, it was held that Mattel, not MGA, had been guilty of stealing trade secrets that it had acquired through various trade shows in an attempt to thwart MGA’s profitable sales from its Bratz dolls. The court has awarded MGA $88 million in damages, who now also has the rights to manufacture and sell the dolls.

This most recent decision is a far cry from the original trial court decision in favour of Mattel, which had been subsequently overturned by the Ninth Circuit Court of Appeals (click here for detailed discussion of judicial history). This decision is a victory for MGA, but it also sends a clear message to toy giants like Mattel – intellectual property is not to be used as a tool to bully or intimidate entrepreneurs who are attempting to break into the industry. However, some have wondered whether the Bratz dolls are even as profitable as they once were before MGA was hit with this set of legal troubles. It may well be that, while MGA has come out victorious before the courts, Mattel may actually be the true winner when in terms of the profitability of its dolls.