US appeals court denies MGA's motion on Bratz dolls

*Appeals court says MGA unlikely to prevail on merits

*MGA pleased that court could decide case by year's end (Adds comments by MGA, Mattel)

NEW YORK, June 11 (Reuters) - A U.S. appeals court denied MGA Entertainment Inc's emergency motion to stop the transfer of its Bratz franchise to rival toymaker Mattel Inc MAT.N while it appeals a 2008 jury verdict that handed the dolls to its rival.

The 9th U.S. Circuit Court of Appeals ruled on Wednesday that MGA "had not met the prevailing standard to show a substantial likelihood of ultimate success on the merits."

The court did grant MGA's request to speed up the briefing schedule for the appeal so that a final ruling could come before year's end, when the trial judge has said MGA must stop making the pouty-lipped, urban chic dolls.

MGA Chief Executive Isaac Larian said in a statement that the company was pleased that the appeals court had expedited the case.

Mattel had no comment on the appeals court ruling.

MGA filed an emergency appeal in late May asking the appeals court to nullify a wide-ranging injunction by U.S. District Judge Stephen Larson that orders it to stop selling its top-selling brand at the end of the year.

Larson also ordered MGA to transfer the Bratz trademark to Mattel as well as all related products, designs, customer information and "know-how" for a planned 2010 Bratz line.

MGA effectively lost rights to the Bratz franchise last summer when the jury ruled that Barbie designer Carter Bryant was still under contract to Mattel when he sold MGA some of the drawings upon which some popular Bratz dolls were based.

The case is: Carter Bryant v. Mattel Inc, case no. 04-9049, U.S. District Court in Riverside, California (Reporting by Gina Keating and Aarthi Sivaraman; Editing by Steve Orlofsky, Leslie Gevirtz)