Bratz creator worked on dolls at Mattel-MGA CEO

By Gina Keating

RIVERSIDE, Calif., June 6 (Reuters) - MGA Entertainment Corp had "no reason" to hide the identity of the designer of its Bratz dolls, even though Carter Bryant was working on the hit franchise while still under contract to Mattel, MGA Chief Executive Isaac Larian said on Friday

In a federal trial over whether MGA or rival Mattel Corp MAT.N owns the copyright to the $1 billion doll line, Larian testified that he was satisfied after checking with Bryant's lawyer and having MGA staff make inquiries, that the designer owned the concept for the big-headed, pouty-lipped dolls.

"As a prudent businessman, I wanted to make sure what he said was right," Larian said in a videotaped deposition played for the jury on Friday in Riverside, California.

But Mattel, which sued the family-owned MGA in 2004, contends that Larian didn't go far enough to ensure that Bryant's original drawings were not owned by the toy giant.

Mattel claims it owns the rights to Bratz because Bryant was under contract to the company when he did the original drawings upon which the dolls are based.

Mattel also showed the jury pay invoices and emails from Larian and other MGA employees, showing that Bryant was actively working on Bratz for weeks after he signed a consulting contract with MGA, and before quitting at Mattel.

In addition to determining ownership of the original concept drawings for Bratz, the jury also will decide whether Mattel owns drawings and models of the dolls that Bryant made while still under his Mattel employment contract.

If the jury decides that Mattel owns any or all of the Bratz-related designs, U.S. District Judge Stephen Larson will determine in a separate phase of the trial what form of compensation Mattel will receive from the franchise going forward, such as a licensing fee.

'THEY SUE EVERYBODY'

Launched in 2001, Bratz, a collection of four urban-hip fashion dolls, have deeply cut into the market share for Mattel's iconic Barbie, once a staple toy for girls ages four and up.

Larian testified on Friday that Bryant had done his initial drawings in 1998 when he was living in Missouri on a hiatus from Mattel. He returned to the company in 1999 but continued to try selling the concept to other toy companies.

"If he was working at them and refining them while he was at Mattel, I don't see any problem with that," Larian testified under questioning from Mattel's lawyers.

In emails shown to the jury, Larian and other MGA employees discuss whether to mention Bryant as the Bratz creator, and in a videotaped interview shown in court.

"There must be no mention about Mattel or any of their properties, Carter, any MGA Bratz arts," Larian wrote in one email.

But Larian said the email came in response to a cease and desist letter from Mattel, which threatened a lawsuit over a Bratz fan site's use of two Mattel brand names, as well as to rumors of impending legal action over Bratz.

"Knowing Mattel -- that they sue everybody, I was upset," he said of the email.

Mattel lawyers also questioned Larian about a videotaped interview in which he says his staff came up with the Bratz name, even though it appeared on Bryant's original drawings.

"We have never tried to hide Carter Bryant's name. We had no reason to do that," Larian said, adding that he was simply recalling in the interview a staff meeting at which the dolls' name was finalized.

Also on Friday, Judge Larson vacated an order filed a day earlier that would have allowed the jury to infer that Larian knew that MGA had hired Mattel employees to build Bratz doll prototypes and was disguising payments to them beginning no later than October 2000 until 2003.

Larson said the order was filed in error, and was no indication of how he would rule on the matter later in the trial. (Reporting by Gina Keating in Riverside, Calif., editing by Carol Bishopric)