By Dan Levine
SAN FRANCISCO Jan 24 A U.S. appeals court threw
out a jury verdict worth more than $80 million against toy giant
Mattel Inc on Thursday over trade secret claims relating
to Bratz dolls that had been won by MGA Entertainment.
The ruling, from the 9th U.S. Circuit Court of Appeals in
San Francisco, also removed an additional $85 million in
enhanced damages imposed by a lower court judge against Mattel,
which makes Barbie dolls. The 9th Circuit kept in place more
than $100 million in attorney's fees won by MGA.
An MGA representative could not immediately be reached for
Mattel spokesman Alan Hilowitz said the company has taken a
reserve to cover the attorney's fees, and it is confident that
MGA will not be able to reassert its trade secret claims due to
the statute of limitations.
The long-running saga over MGA's pouty-lipped, large-headed
Bratz dolls began in 2004 as the toys soared in popularity, and
Mattel accused Van Nuys, California-based MGA of stealing its
designs by hiring one of Mattel's key employees.
In 2008, a federal jury ordered MGA and its chief executive,
Isaac Larian, to pay Mattel $100 million. The 9th Circuit threw
out that verdict in 2010. At a retrial in 2011, a jury rejected
Mattel's copyright claims and found the toy maker was liable on
fresh trade secret allegations leveled by MGA.
In its ruling on Thursday, the appeals court found that MGA
should not have been allowed to present its trade secret claims
against Mattel to the jury, because they were not sufficiently
related to Mattel's original allegations.
"That both Mattel and MGA claimed they stole each other's
trade secrets isn't enough to render MGA's counterclaim
compulsory," the court wrote.
The 9th Circuit concluded: "While this may not be the last
word on the subject, perhaps Mattel and MGA can take a lesson
from their target demographic: Play nice."
The case in the 9th Circuit is Mattel Inc. vs MGA