UPDATE 1-Mattel, MGA begin court battle over Bratz doll

(Reworks first paragraph; adds details of MGA opening statement, comments from MGA CEO)

By Gina Keating

RIVERSIDE, Calif., May 27 (Reuters) - Mattel Inc MAT.N and MGA Entertainment Inc on Tuesday clashed in federal court over which toy maker owns the rights to the hit Bratz doll franchise, offering dueling theories for when and how the pouty-lipped rival to Barbie was invented.

Barbie maker Mattel contends it owns the copyright to the hip urban-themed doll, which is made by MGA and was designed by former Mattel employee Carter Bryant.

Mattel attorney John Quinn told jurors in Riverside, California, that MGA secretly bought Bryant's design to bolster its weak toy offerings and then tried to cover up Bryant's involvement in the Bratz franchise by concocting false stories about who invented the doll after it became a best seller.

"For nearly a year, the designer had been working on a doll he called Bratz," Quinn said in his opening statement. "MGA didn't hire him right away. They polished the fashion doll design using Mattel resources and Mattel personnel."

MGA contended the big-headed Bratz dolls -- which it touted last year as a billion-dollar franchise -- were conceived in 1998 during an eight-month hiatus Bryant took from Mattel.

"I will deny that MGA stole an idea," MGA attorney Thomas Nolan said in his opening remarks. "Mattel ... (is) trying to get an idea they did not create and a doll they did not make."

Nolan portrayed Bryant, an artist and fashion designer who did two stints as a Barbie designer, as bored with a stifling bureaucratic culture at Mattel and yearning to make his mark when he came up with Bratz during the summer of 1998.

Bryant will testify that the drawing sprang from the baggy fashions worn by high school kids as well as ads in an August 1998 issue of Seventeen magazine depicting "empowered young girls with attitude," Nolan said.

"There was a market opporuntunity that was not being served by the makers of Barbie," Nolan said.

Both sides agreed the case turns on when Bryant made the original drawings that turned the fashion doll world on its head by idealizing urban chic, multi-ethnic characters and "normal" body proportions.

DAVID V. GOLIATH?

Mattel says it will show that Bryant made the original Bratz sketches on paper torn from a Mattel-provided notebook after he signed an "invention agreement" ceding rights to anything he created upon returning to the company in January 1999.

Quinn showed the jury sketches made by another Mattel designer in mid-1999 for a proposed line of dolls called Toon Teens as well as logos for another doll concept called "Brats" that he said inspired the rival dolls' look and design.

Quinn said Mattel also plans to put on the stand Mattel designers who unwittingly helped perfect the Bratz design in the months before Bryant left Mattel for MGA in late 2000.

Mattel and Bryant had sued each other over the agreement but confidentially settled their claims earlier this month.

Mattel wants the jury to find that it owns the Bratz sketches and to stop privately held MGA from selling products based on them.

"Today's trial is about Bratz and MGA, and in particular the question 'who came up with Bratz and when'," Mattel Chairman and Chief Executive Robert Eckert said in a statement. "The court has already ruled that Bratz-related designs and concepts created by Carter Bryant while he was a Mattel employee are owned by Mattel. I'm pleased that these issues are finally in front of a jury."

MGA Chief Executive Isaac Larian on Tuesday accused Eckert of "putting out false propaganda" and compared his company to "David fighting Goliath."

"The court has not ruled in Mattel's favor that the Bratz-related designs and concepts created by Carter Bryant while he was an employee at Mattel are owned by Mattel," Larian said in a statement. "We are very pleased that the jury will finally hear and see the evidence."

Since their launch in 2001, Bratz dolls have become popular enough to engage Barbie in a fierce battle for young girls' loyalties and have cut deeply into Barbie's market share.

Mattel posted a $46.6 million first-quarter loss on legal expenses from the MGA litigation and on product recalls, and saw sales of Barbie drop 12 percent. (Editing by Braden Reddall)