MGA unwilling to share Bratz revenue with Mattel

By Gina Keating

LOS ANGELES (Reuters) - MGA Entertainment Inc will not share future revenue from its Bratz doll franchise with Mattel Inc MAT.N to settle a copyright infringement lawsuit, MGA Chief Executive Isaac Larian told Reuters on Thursday.

"It's not true. I never said that," Larian said of a Wall Street Journal story, which cited him as saying that MGA would be willing to share future revenues from its Bratz doll franchise to end the federal court litigation.

"What I said was, that it is in the interest of MGA employees and I believe it is in the interest of Mattel shareholders and Mattel employees for the two companies to come to a settlement and move on," Larian said.

Wall Street Journal spokesman Robert Christie said on Thursday the newspaper stands behind its story.

Larian met this week with a mediator for a court-ordered settlement conference, but he said a royalty payment on future Bratz revenue was not on the table.

"We are never going to give the Bratz brand to Mattel or anybody else," Larian said. "A royalty for what? These are really speculations that are not realistic."

U.S. District Judge Stephen Larson ordered MGA and Mattel into mediation to work out the amount of damages MGA would pay Mattel for infringing on the original Bratz drawings and models that Mattel won in the court fight, as well as which company will control the franchise going forward.

A federal jury in Riverside, California awarded Mattel all but four drawings and models upon which the Bratz franchise was based, finding that former Barbie designer Carter Bryant had made them while under contract to Mattel and illegally sold them to MGA.

The jury also awarded Mattel up to $100 million in damages and lost profits during the two-phase summer trial, but the verdict did not conclude which company had the right to make the urban chic competitor to Barbie.

Mattel had argued that MGA owed it all revenues from Bratz -- about $2 billion -- plus punitive damages. MGA had contended that if the jury found that the dolls infringed at all on the drawings, damages should be limited to the first generation of dolls because later generations were substantially redesigned.

The jury appeared to side with MGA by awarding only $10 million on Mattel's copyright infringement claim and by asking the judge during deliberations if it could award damages based only on profits from the first generation of dolls.

Larian, who intends to appeal the final damages award, described his position going into the mediation as: "I want to come to a global settlement that each one of us goes our own way and competes where it really matters: in the marketplace."

A Mattel spokesperson said the company was continuing to take part in the process.

"I don't want to spend another summer in Riverside (California). It took a toll on my family," Larian said. "My willingness for a settlement doesn't come from my weakness, it comes from my strength."

Mattel's shares closed up 8 cents at $19.40 on the New York Stock Exchange.

(Additional reporting by Aarthi Sivaraman in New York)